Breakout Session 203 Jon Maxim, President, Maxelerate April 10, 2006 2:45 PM

2. Vendor Performance Management Breakout Session 203 Jon Maxim, President, Maxelerate April 10, 2006 2:45 PM NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

3. Competitive Environment Preparation Management Negotiation The 4 Phases NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

4. Control Unmanageable Vendor Direct Long-Term Relationship Optimize Vendor Performance Manage The Contract Management The VPM Process NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

5. Control Unmanageable Vendor Direct Long Term Relationship Optimize Vendor Performance The VPM Journey Manage The Contract NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

6. Manage The Contract • Manage the “Paper Trail” • Manage the money • Manage your assets • Manage changes NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

7. Manage The Contract Administer Contract • Manage the “Paper Trail” • Contract content and event tracking • Deliverables • Service level agreements • Events: Renewals, termination, price, etc. • Vendor interaction documentation NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

8. Manage The Contract Administer Contract • Manage the money • End-to end payment administration • Remedy and reimbursement entitlement NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

9. Manage The Contract Administer Contract • Manage your assets • What is an asset? • Physical Assets • Intellectual Property • Yours • Theirs • NDA’s and Proprietary Information NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

10. Manage The Contract Administer Contract • Manage changes • Inevitability • Vendor vs. client view • Incorporate rolling estoppels • Change process • Focal point • Response format • Timely disposition NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

11. Optimize Vendor Performance • Track & Measure • Compare • Act! • Incent NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

12. Optimize Vendor Performance Enforce Compliance • Track • Customer responsibilities • Vendor responsibilities NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

13. Optimize Vendor Performance Enforce Compliance • Measure • Aligned with contract • SLA’s • Methodology • Problem prevention NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

14. Optimize Vendor Performance Enforce Compliance • Compare • Vendors within categories • Executive communication NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

15. Optimize Vendor Performance Enforce Compliance • Act! • Feed Back Performance • Obtain Remedies • Vendor management automation tools NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

16. Optimize Vendor Performance Vendor Tiers • Why tier? • Criteria • Expectations NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

17. Strategic Preferred Standard Optimize Vendor Performance Tier III Tier II Tier I NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

18. Optimize Vendor Performance Incentives Management NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

19. Optimize Vendor Performance Incentives Management NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

20. Optimize Vendor Performance Incentives Management NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

21. Optimize Vendor Performance Incentives Management • Rights, remedies & rewards • The limitations of remedies • Use of incentives and rewards • Optimum performance vs. overpaying NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

22. Direct Long Term Relationship • Establish Correct Relationship • The True Strategic Supplier NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

23. Direct Long-Term Relationship The True Strategic Supplier What a strategic supplier brings to the “relationship table”: • Engages you in joint development • Their senior execs are assigned to you • Account teams have high knowledge level • Accountable for product performance • Leader in their industry • Committed to continuous improvement • Expectations custom built to your company • Create competitive advantage for you • Provides preferential pricing NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

24. Control Unmanageable Vendor • Love • Leverage • Conflict Resolution • Termination NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

25. Control Unmanageable Vendor Sources Of Leverage • The Contract • The Marketplace • The Relationship • The Law • Your Checkbook NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

26. Control Unmanageable Vendor Termination Project Plan • Assign project manager • Form transfer team • Develop termination strategy • Gain executive sponsor approval • Select replacement supplier • Develop transition plan • Ramp up new supplier • De-ramp current supplier • Deplete inventories • Clear invoices • Inform clients • Communicate with current suppliers • Communicate with stakeholders and business units • Terminate supplier transactions NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

27. 5 Keys To Success • Executive support • Teaming stakeholders • Classification of suppliers • Measurement • Rules of engagement NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management