How To Manage Your Vendor

Sat in on a free, well-attended Webinar hosted by two trainers/consultants from ESI International, Jim Foreman and Jerry Perone, who spoke on “The Three Cs of Vendor Management Success.” (At the end of this posting, I provide a link where you can tune in to listen if you missed it.)

The take-aways I picked up are these.

The “3 Cs” that you need to ensure a successful sourcing endeavor encompass:

  • Competence
  • Collaboration
  • Communication

Competency is ultimately about the people involved in the project. The number one mistake we make is to assume competency among participants. To ensure we're on top of the issue, we need to develop a full competency management plan that defines the processes, describes detailed tasks for each, maps roles to tasks, describes required skills, assesses the skills of participants, and identifies the gaps. Response may require people changes, process changes, and training.

The components of an effective competency management plan include the right processes, the right project managers, the right sponsors (who will support the project manager and the plan), and the right contractual terms.

Collaboration is ultimately about the work. The number one mistake we make here is to go “against the odds.” We don't have the right people doing the right things at the right time over the lifecycle of the project or endeavor, yet we mostly just hope it will all turn out OK in the end. With a solid dose of risk management, we could identify risks before they materialize as true problems. The critical success factors are a sense of urgency, developing the capacity to anticipate, managing risks within the context of the goals, creating a culture where risk management becomes “everyone's job,” and ensuring skills exist to competently perform the work.

The components of effective collaboration management are the right people, the right plan, the right collaborative partner, and the right contractual relationship. (Regarding the latter, for example, we have a totally different relationship with our vendor in fixed price engagements, where the vendor takes on the bulk of risk, vs. time/materials deals, in which both parties share the risk more evenly.)

Communication, interestingly, isn't about language and media. It's about management and control. The number one mistake we make is giving up control. The solution: to develop a communication plan. The vehicles for doing so include work products and reviews, status meetings and performance reporting. The communication needs to take place, among team members (on the customer and vendor teams), among team members and stakeholders, and among team members and executives or management.

Action steps for improving vendor management include:

  1. Analyzing your sourcing contract needs.
  2. Developing a repeatable, lifecycle process.
  3. Breaking down the process into detailed tasks.
  4. For each transaction converting the processes to project plans.
  5. Establishing a results database and seeking to continuously improve the processes.
  6. Simultaneously building competencies.

ESI strongly recommends establishing and maintaining a vendor management office.

To get the slides from the Webinar, send email here.

To watch the Webinar, it should shortly be posted here.