10.6 Thirteen Steps of Vendor Management

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Whether you add a vendor through the RFP process or choose to leverage an existing relationship, from a project perspective, you and the vendor need to find a comfortable middle ground from which you can work together effectively. Although you cannot treat them exactly as you would internal subteams, neither can you hold them at arm's length like a mute porter in a five-star hotel. In the end, your expectations are the same with a vendor as they are with subteams, so you are going to walk through all the processes already documented in this book, as appropriate. This may include requirements and specifications, risk, implementation planning, and scheduling. Exhibit 5 is presented as a checklist to guide you through this vendor management process.

Exhibit 5: Thirteen Steps of Vendor Management

Maintain a detailed, written audit trail of all discussions and agreements.
When documenting vendor tasks, the operative phrase is "the vendor shall."
Get a written commitment on vendor team members, escalation, etc.
Roles and responsibilities are clearly written and agreed to.
Rules of engagement should include onsite attendance requirements.
Implementation strategies are mutually agreed upon.
Reserve the right to review vendor designs and request changes.
Project plans are submitted in advance for your approval.
Test plans are submitted in advance for your approval.
Specify documentation required from the vendor, including media and format.
Specify support and maintenance to be provided.
Prearrange change control processes and pricing to address scope creep.
Any training provided by the vendor must be preapproved by you.

As early as possible, you need to facilitate a target state walk-through wherein both sides agree on project objectives. Then, you can engage them in discussions regarding implementation strategy and risk analysis. These conversations can start as a white board exercise, but the emerging results must be formally documented, preferably before that first shovel full of dirt gets moved. If you need 12 things done or 7 specific functions provided by the new software, spell them out. You should dialog with the vendor and any customers or beneficiaries during this exchange to gain confidence that the project will be a success and that everyone will remain on speaking terms from start to finish. Any scope, performance, or timeline issues should be identified and resolved at this point, when you have the best opportunity to fix things. ^[1]

Understand your vendor's processes. By taking the time to understand how he or she does business, you can more readily adapt to, and resolve, issues that are bound to arise. If your vendor is having people or supplier problems, you need to understand this sooner rather than later and escalate or resolve as necessary. Vendors are loathe to blow the whistle on themselves if they are experiencing backorders or performance slippage, but you need to know this as soon as they do so you can keep your project on track. Sometimes this requires managing them more than you would like, but that is life in the big city.

Build relationships with key vendor personnel. Although you want them to respect your internal protocols and you should do the same for them, it is important that you are comfortable picking up the phone and speaking with more than one person in their organization. To do this effectively, you need to understand the role of each of their key players, and leverage them accordingly. For example, the technical lead is a wonderful person to discuss all the "bits and bytes" with, but do not lean on him or her if you have business issues with the vendor. The salesperson is best for that, but not for griping about delivery schedules if the vendor has assigned you a project manager. Going to the wrong person on the vendor team with an issue can be frustratingly unproductive. If the vendor team is new to you, it is best to ask them who handles which issues along the lines of the descriptions in this paragraph.

Do not forget that somewhere in the background lurks a senior executive or company owner, if the outfit is small enough. Make it a point to check in with that person from time to time. Establish a relationship and provide feedback, being sociable even if you have issues or concerns with vendor behavior. Vendors are not very proactive in this regard and generally do not engage at the executive level until after something untoward has occurred. I have found it helpful to build such relationships before the wheels fall off. Then, when you do need senior management involvement from the vendor side, they already know you. The benefit is that if misfortune puts the professional relationship under duress, they are less likely to feel ambushed at the personal level, which of course would only make them less responsive in ways you would find timely or expeditious. This might appear to be somewhat backward. In fact, I have been known to chide vendors for making me work so hard at being a customer. Still, this is another typical case where, if you understand how things are, right or not, and compensate for them, you will end up far better than if you wait for the world to behave as you would believe it should.

Exhibit 6 summarizes the key principles to follow when you resort to a vendor solution for part or all of your project.

Exhibit 6: General Vendor Guidelines

Understand any existing vendor terms and, if necessary, change them.
Do not assume an incumbent vendor will do what you need.
Always spell things out, leaving nothing to chance.
Extract confirmations in writing.
Do not turn checking status into a witch-hunt, but do stay on top of things.
Be ever vigilant and proactive.
Make a point of understanding how to trust and manage each vendor.

^[1]This is also the time to clearly identify which side (you or the vendor) is going to pay for or provide specific equipment, software, facilities, and other potential logistical costs.

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