Our discussion highlights clear successes via a step-by-step, phased approach:

1. Market the value of sourcing and vendor management. The marketing of sourcing and vendor management groups is easier in the recession. As one member said, "If you can't market what you did for the business, what you did was useless." Sourcing and vendor management groups are part of the solution during this downtown, not part of the problem. Many firms have addressed the challenge of executive sponsorship or mandate of sourcing and vendor management groups. If you do not have one, now is the time - but establish a level of authority inside the organization. Groups that have the proverbial carrot can still experience success but, if combined with a stick, there is much more potential, such as vendor portfolio and spend analysts, vendor segmentation, and scorecards.

2.Vendor rationalization. This seems like the common bond across organizations. Vendor consolidation strikes fear in some of the lower-tier vendors, but it should not. Vendor consolidation is not solely about getting rid of the weak vendors ("We use them because someone's uncle works there" is a common response to using one of four similar vendors). It is also about communicating to the business the preferred vendors and why a vendor who may not be number one in the market is a viable option to the organization because of this exercise. Also vendor consolidation should also be driven by category (hardware, software, telecom, and services) and the approach and methodology may be slightly different to map the organizations model.

3.Challenge Vendors. Clients are challenging vendors to provide innovation for cost cutting. Cost cutting discussions should be a two way street, not simply the client asking the vendor to cut cost. A few members of our Council have hosted IT supplier days to share information about both markets and challenge the vendors to return with suggestions. The result: quick wins that not only promote the value of sourcing and vendor management groups internally, but also highlight the value of key strategic vendors. So take this advice, vendors: while everyone recognizes this is not a welcome conversation, prepare for it and be proactive if you can. If you can deliver, you will have a client for life.

4.Cut where you can. Professional services and contract labor have a high beam shining on them. Some of our member organizations have successfully decreased rates on average of 10 to 15 percent while other success stories - I would hate to negotiate with these executives - have seen a decrease in the range of 20 to 30 percent. While this is not great news for the services category and some providers will not survive the recession, the access to better talent, shorter assignments, and an available bench is a clear win for end users.