The commercial approach for IT vendor engagement will depend upon the contract structure and exactly what the customer organisation wants to achieve – price certainty, earliest delivery schedule, flexibility, etc.
Ideally, the commercial approach should:
-Achieve the lowest possible price
-Provide price certainty
-Be consistent with the current programme timeframe
-Be flexible enough to respond to changes in the customer’s programme
-Provide unambiguous supplier accountability
-Support appropriate risk sharing
-Leave Customer with options for the future
Although less critical, the approach should also avoid excessive management / administrative burden. For some customer organisations with lower maturity of vendor management, a simple approach is best.
Three dimensions typically define the scope of commercial approaches; how many contracts the programme of work is split into, whether there is a single or multiple contracting parties and the pricing basis for each contract. The recommended approach for a particular customer will depend upon the considerations above.