Supplier and relationship management

The supplier and relationship management requirement in ISO/IEC 20000 expects you to control how third parties contribute to service outcomes by defining commitments, monitoring performance, and governing issues through an accountable process. To operationalize it quickly, build a complete supplier inventory tied to services, set measurable obligations in contracts/SLAs, and run a recurring performance review with evidence. ¹

Key takeaways:

• You need end-to-end governance from supplier onboarding through ongoing performance management and offboarding, mapped to service outcomes. ¹
• Auditors will look for measurable commitments plus proof you monitor, escalate, and improve supplier performance, not a policy alone. ¹
• The fastest path is to standardize: one inventory, one contract addendum set, one KPI pack, and one cadence for reviews and corrective actions. ¹

Supplier and relationship management is where service management stops being internal process design and becomes supply chain execution. If a third party runs your service desk, hosts workloads, ships replacement hardware, provides telecom connectivity, or delivers a critical SaaS component, your customer still experiences the outcome as “your service.” ISO/IEC 20000’s intent is simple: manage supplier contributions to service outcomes and prove that management with records. ¹

For a Compliance Officer, CCO, or GRC lead, the operational goal is to make supplier management auditable without turning it into bureaucracy. That means (1) you can name every supplier that matters to each service, (2) each one has defined obligations that match the service requirements you promised customers, (3) you measure performance and act on failures, and (4) you keep the evidence in one place.

This page gives requirement-level implementation guidance you can execute quickly: who it applies to, the minimum operating model, artifacts to retain, audit questions you’ll get, and a practical 30/60/90-day rollout plan aligned to ISO/IEC 20000’s expectations. ¹

Requirement: supplier and relationship management requirement (ISO/IEC 20000)

Plain-English interpretation: You must govern third parties that contribute to delivering and supporting IT services so their performance, risks, and changes do not break your service commitments. This includes selecting suppliers, defining contractual service commitments, monitoring delivery, handling issues and disputes, and managing changes and exits in a controlled way. ¹

Who it applies to

Entity scope: IT service providers seeking alignment or certification to ISO/IEC 20000. ¹

Operational scope (what counts as a “supplier” here):

• Outsourced service desk, NOC, SOC, or field services providers
• Cloud/IaaS/PaaS/SaaS providers that are part of service delivery
• Telecom and network providers
• Managed service providers and specialist contractors
• Hardware maintenance, logistics, and warranty partners
• Any third party whose failure can degrade availability, capacity, continuity, or security of your services

Practical scoping rule: If an incident, backlog, outage, or security event at the third party would cause you to breach a customer-facing commitment (SLA/OLA/contract), treat that third party as in-scope for supplier and relationship management. ¹

---

Regulatory text

Provided excerpt (licensed text not reproduced): “Baseline implementation-intent summary derived from publicly available framework overviews; licensed standard text is not reproduced in this record.” ¹

Implementation-intent summary: “Manage supplier contributions to service outcomes.” ¹

What the operator must do: Build a repeatable process that (1) defines supplier obligations related to service outcomes, (2) monitors whether suppliers meet those obligations, and (3) triggers corrective action, escalation, and improvement when they do not. Keep records that show the process runs in practice. ¹

---

What you actually need to do (step-by-step)

The sequence below is designed to produce audit-ready evidence fast while still improving operations.

1) Build a supplier inventory tied to services

Create a single list that answers: “Which third parties support which services, and how critical are they?”

• Supplier legal name, owner, and contact paths (business + escalation)
• Services supported (link to service catalog entries)
• Data/system access involved (high-level, for risk context)
• Contract start/end, renewal windows, termination notice terms
• Criticality tier (use a simple tiering scheme you can defend)

Operator tip: Most teams fail here by keeping procurement’s list separate from IT’s “shadow supplier” reality. Reconcile finance spend, SSO app inventory, and service owner inputs into one inventory.

2) Define contractual service commitments that mirror your service obligations

For each in-scope supplier, confirm the contract (and any SLA/SOW) states measurable commitments relevant to the service outcomes you sell and operate, such as:

• Availability/support hours and response targets
• Incident handling and escalation expectations
• Change windows, maintenance notification, and approvals
• Continuity/backup expectations where applicable
• Security and access management responsibilities where applicable
• Reporting cadence and required metrics

If you find gaps, address them through a standardized addendum pack or a contract refresh plan rather than bespoke rewrites every time.

Minimum control to implement quickly: Track supplier performance and contractual service commitments in a consistent, reviewable format. ¹

3) Assign accountable owners and a review cadence

Set clear roles:

• Service Owner: accountable for end-to-end service outcomes, including supplier performance impacts
• Supplier Manager (or Vendor Manager): runs operational cadence, tracks KPIs, manages issues and renewals
• Procurement/Legal: ensures terms exist and changes are controlled
• InfoSec/Risk (as relevant): supports risk review for suppliers touching sensitive systems/data

Then define an operating cadence:

• Regular performance reviews for critical suppliers
• Action tracking for breaches, chronic issues, and improvement commitments
• A path for escalations and dispute management

4) Monitor performance using a KPI pack you can explain in an audit

Pick metrics that directly connect to service outcomes and contractual commitments. Examples:

• SLA attainment (supplier-level) and whether it affected customer SLAs
• Incident volumes attributable to supplier, response/restore timeliness
• Change success rate and change-related incidents
• Ticket backlog aging for outsourced support
• Delivery timeliness for field/hardware support

Evidence standard: Auditors tend to accept imperfect metrics if they are consistent, reviewed, and acted upon. They reject “we monitor” with no recurring records.

5) Run issues through a corrective action workflow

When a supplier misses commitments:

• Record the breach (what, when, impact, related incident/problem/change records)
• Determine root cause ownership (supplier vs internal integration issue)
• Agree corrective actions, due dates, and verification steps
• Escalate if actions stall or impact repeats
• Update risk/criticality if performance degrades

Tie the workflow to existing ITSM processes (incident, problem, change). Supplier management should not be a parallel universe.

6) Control supplier-driven change and exit

You need controlled handling for:

• Supplier-initiated changes (platform deprecations, maintenance schedules)
• Your changes that affect suppliers (new integrations, new volumes, access changes)
• Offboarding and transition (data return/destruction, access removal, asset return, knowledge transfer)

Common gap: Teams plan onboarding but improvise offboarding. Exits are where evidence is often weakest and risk is highest.

---

Required evidence and artifacts to retain

Keep these in a repository that GRC and service teams can access without chasing emails.

Core artifacts (baseline)

• Supplier inventory mapped to services (with criticality tier and owners)
• Contracts/SOWs/SLAs (or extracts) showing service commitments
• Supplier KPI reports and dashboards (raw reports plus commentary)
• Meeting minutes/notes from supplier performance reviews
• Breach logs and corrective action plans (CAPAs) with closure evidence
• Escalation records (including dispute records if applicable)
• Change coordination evidence for supplier-affecting changes (tickets, approvals)
• Offboarding/transition checklists and access removal confirmation

Audit-ready linking (what makes it “real”)

• Traceability from customer commitments → internal service targets → supplier commitments
• Traceability from incidents/problems → supplier performance reviews → corrective actions

---

Common exam/audit questions and hangups

Expect questions like:

1. “Show me your in-scope supplier list and how you decided criticality.”
   Hangup: No documented rationale, or the list excludes SaaS used in production.

2. “Where are supplier SLAs, and do they align to your service catalog commitments?”
   Hangup: Contracts exist, but terms are not measurable or not mapped to service outcomes.

3. “How do you know suppliers meet commitments? Show the last two review cycles.”
   Hangup: Reviews are ad hoc or exist only as calendar invites.

4. “Show an example where a supplier missed a commitment and what you did.”
   Hangup: No corrective action records, or actions have no owners/dates.

5. “How do you manage supplier changes and exits?”
   Hangup: No transition plan, no access removal evidence, no data return/destruction confirmation.

---

Frequent implementation mistakes (and how to avoid them)

Mistake 1: Treating supplier management as procurement-only

Fix: Make the Service Owner accountable for outcomes; procurement supports contracting, not performance management.

Mistake 2: Measuring the wrong things

Fix: Start from service outcomes and contractual commitments. If the metric doesn’t predict customer impact, drop it.

Mistake 3: No single system of record for evidence

Fix: Create one “supplier file” per critical supplier with a checklist of required artifacts and a consistent naming scheme.

Mistake 4: Accepting supplier reports without validation

Fix: Reconcile supplier-reported metrics with your ITSM records (incidents, changes, ticket timestamps) where possible.

Mistake 5: Ignoring fourth parties and subcontractors

Fix: Where material to your service, require transparency in contracts and include subcontractors in risk discussions.

---

Enforcement context and risk implications

No public enforcement cases were provided in the source catalog for this requirement. Practically, the risk shows up as service failures: missed SLAs, prolonged incidents, poor change outcomes, weak transition control, and audit findings tied to lack of evidence that supplier contributions are managed. ¹

For ISO/IEC 20000 certification efforts, this requirement often becomes a “records problem,” not a “policy problem.” Teams have informal supplier check-ins but can’t produce consistent evidence across suppliers, services, and time periods. ¹

Where Daydream fits naturally: Daydream is useful when you need a repeatable evidence spine: supplier inventory mapped to services, control checklists per supplier, and a single place to store KPIs, review notes, and corrective actions for audits.

---

Practical 30/60/90-day execution plan

Days 0–30: establish scope, inventory, and minimum commitments

• Confirm service catalog scope for ISO/IEC 20000 audit and list services dependent on third parties.
• Build the initial supplier inventory and assign an owner per supplier.
• Classify criticality based on service impact and dependency.
• Collect contracts/SLAs for critical suppliers; document gaps against service outcomes.
• Publish a one-page supplier management SOP: cadence, roles, escalation path, and evidence checklist. ¹

Exit criteria: You can name your critical suppliers, show which services they support, and produce the relevant contracts.

Days 31–60: start performance governance and evidence generation

• Define KPI packs for each critical supplier (start simple, align to commitments).
• Schedule and run performance reviews; record minutes and actions.
• Implement a breach/CAPA log and connect it to incident/problem records.
• Standardize templates: agenda, scorecard, action register, escalation note.
• Begin contract remediation plan for missing measurable commitments. ¹

Exit criteria: You have at least one completed review cycle with actions tracked to closure (or in progress with owners and dates).

Days 61–90: strengthen controls for change, continuity, and exit

• Integrate supplier impacts into change management (required approvers/notifications for supplier-affecting changes).
• Add exit/transition checklists for critical supplier types (SaaS, MSP, telecom, hardware support).
• Test evidence retrieval: pick one supplier and produce the full audit trail in one sitting.
• Tune criticality tiers and cadence based on observed performance and service impact.
• Prepare an audit binder view (or Daydream workspace) organized by supplier and by service outcome. ¹

Exit criteria: You can demonstrate governance across the supplier lifecycle with consistent records, not one-off examples.

Frequently Asked Questions

Does this requirement apply to SaaS providers that “only” support internal teams?

If the SaaS materially affects delivery or support of an in-scope service, treat it as in-scope and manage it as a supplier dependency. If it has no plausible impact on service outcomes, document the rationale for excluding it. ¹

What’s the minimum evidence an auditor will accept?

A mapped supplier inventory, contracts showing service commitments, recurring performance review records, and at least one example of a tracked issue with corrective action and closure evidence. “We meet with them” without records usually fails. ¹

How do we handle suppliers that refuse to commit to specific SLAs?

Document the gap, assess the service outcome impact, and mitigate through alternative controls (redundancy, monitoring, or service design changes) while you plan a contract renegotiation or supplier change. Keep the decision record and risk acceptance trail. ¹

Who should own supplier performance reviews: procurement or IT?

The Service Owner should be accountable because the service outcome is theirs. Procurement should support contracting and renewals, and GRC should set the control expectations and verify evidence. ¹

How do we tie supplier management to incident and problem management without duplicating work?

Use your ITSM records as the system of record for operational events, then summarize supplier-attributable patterns in supplier reviews and track corrective actions in one action register. Link records rather than rewriting narratives. ¹

We have hundreds of third parties. How do we keep this scalable?

Tier suppliers by service impact and focus your evidence-heavy cadence on critical suppliers. For lower-tier suppliers, require basic contract terms and lightweight performance checks, and document the tiering logic. ¹

Related compliance topics

• 2025 SEC Marketing Rule Examination Focus Areas
• Access and identity controls
• Access Control (AC)
• Access control and identity discipline
• Access control management

Footnotes

1. ISO/IEC 20000-1 overview