An enterprise is evaluating a Software as a Service (SaaS) solution to support a core business process. There is no outsourcing governance or vendor management in place. What should be the CEO's…

Before engaging with a SaaS provider, establishing clear roles and responsibilities for managing service providers creates the essential organizational structure for effective governance and vendor management. This foundational step ensures accountability and a clear chain of command for managing the relationship, risks, and performance of the outsourced service.

Establishing a contract is a crucial part of the engagement process, but it should be done within an established governance framework, not before defining who will manage that contract.

Instructing management to use a standard procurement process is insufficient if no outsourcing-specific governance or vendor management framework exists, as SaaS procurements often have unique considerations beyond typical purchasing.

Defining SLAs is a critical component of a contract and vendor management, but it logically follows the establishment of roles and responsibilities for who will define, negotiate, and monitor those SLAs.