6. Vendor Management

Vendor Management

Even the most reputable, experienced, and trust worthy vendor requires effective management. 

This module covers:

1. The roles of the vendor and the client

2. The Critical Success Factors of a vendor-client project

3. A case story about a billion dollar failed vendor project

4. A process for successfully managing a vendor-client project

5. An approach for assessing the vendor performance on the project

Critical Success Factors For Effective Vendor Management

1.   Vendor selection. We tend to focus on the functionality of the vendor’s solution, but evaluating the capabilities of the solution to support the size and complexity of the organization are as, if not more important. Also, it is critically important to assess the vendor’s track record in implementing projects of similar size and complexity. A thorough checking of references, not just a courtesy call,  will also help.

2.   Contract. An effective contract should foresee all the potential failure points of the vendor’s project and include safeguards that will protect the client company.

3.   Effort estimates and timeline. Vendors sometimes understate the amount of effort and duration of the project in a bid to win the contract. It is critically important that the client reviews and validates the vendor’s estimates and timeline, even in a Fixed Cost contract.

4.   Vendor resources. It is customary for vendors to show-case their best resources during the sales process. However, once the contract is signed, the vendor often provides resources that are available at the time, which may be far less qualified than the resources show-cased during the sales cycle. Specifying the process to continuously assess the quality of the vendor’s resources and replacing them if necessary is critically important.

5.   Performance monitoring. It is the client’s responsibility to monitor the vendor’s performance on the project and request adjustments where necessary.

6.   Knowledge transfer. It is also important that the client’s personnel learn the vendor’s solution during the course of the project, so that the client builds capabilities to maintain the solution over time with minimal vendor support.

7.   Relationship with senior management. Building close relationships between the client’s executive management and the vendor’s most senior management right from the start of the project is an approach that ensures open channels of communication in case major issues arise.

In this module you will learn how to:

a.   Define the roles of the vendor and the client in a manner that will ensure the success of your project.

b.   Thoroughly evaluate the capabilities of your vendor and their solution in a manner commensurate with the size and complexity of your project.

c.   Craft a contract that will protect your interests before you have to activate provisions in the contract.

d.   Implement vendor management processes that will support the project most effectively.

e.   Review the vendor’s project strategy, project plan, estimates, and timeline.

f.   Monitor the vendor’s performance and the capabilities of their resources.

g. Build a relationship between your senior management and that of the vendor’s, which will support the project in times of need.