Better Vendor Management

Co-written with Beverly Lieblang

Slalom Consultant Carl Manello

Carl Manello is a Solution Lead for Program & Project Management based in Chicago who enjoys exploring how to tightly couple the art and science of project delivery with business operations.

“Let’s work together in partnership to ensure that we can have the best way forward.”
–John Pistole, former Deputy Director of the FBI

In today’s dynamic and highly leveraged economy, companies continue to increase their reliance on outsourcing as a means to remain competitive. Ideally, outsourcing fills internal resource gaps and missing skill sets with the intent of saving money. In order to take advantage of vendors’ specialized capabilities, many corporations engage in a multi-vendor sourcing approach. It is also critical that corporations institute an appropriate level of governance and vendor management.

“As organizations increasingly make outsourcing an integral part of their operations, a new breed of professionals skilled in the design, implementation and management of these complex business relationships has emerged.”
–Michael Corbett, International Association of Outsourcing Professionals

Slalom Consultant Beverly Lieblang

Slalom Consultant Beverly Lieblang has significant experience in managing global teams, project management, finanancial services, and health care.

One approach to achieve success in a multi-vendor environment is to foster a sense of team not only between vendors but within the client-vendor relationship. To build this relationship requires an evolution from transactional to collaborative points of view.

In a transactional relationship the client makes project decisions and defines metrics in a silo while the vendor executes those decisions and is evaluated on their ability to deliver. There are several challenges with this siloed approach:

  • Decisions may be made without mutual consent.
  • Communication regarding decisions tend to be one way (from client to vendor), not always well conceived and sometimes embody the wrong message.
  • Commoditization of vendor services. Some vendor services should be commoditized. However, not all client/vendor decisions should be judged by the penny. This can result in a vendor being selected because they are the lowest bidder, but not the provider of the best value of services.

Each of the examples above provides ample opportunities for finger-pointing when things go wrong and fosters an environment of “Us versus Them”.

Shifting from a transactional to a collaborative vendor relationship requires a change in thinking both in vendor selection and relationship management. When choosing a vendor the strategic focus is to obtain both value and cost savings. To achieve this, companies need to invest upfront planning time to understand the strengths and processes of each of the key vendors. Companies do well when they form partnerships and share goals with those vendors who provide value in support of the organization’s objectives goals. This understanding evolves as work progresses.  Both the company and the vendor continue to seek ways to streamline their efforts to eliminate redundancies and potential rework. Over time, a trusting relationship emerges that can be mutually beneficial to both parties.

Once a collaborative partnership emerges, there are certain hallmarks and behaviors that raise the bar. When there is no longer siloed decision making, there are many benefits:

  • The client and vendor jointly determine expectations and goals, and work together proactively to achieve them.
  • The partnership approach extends to joint problem solving and continuous integrated planning.
  • Metrics can be defined up front by both parties, agreed upon by all, and assessed on a regular basis to track progress and gauge results.
  • Key decisions are mutually agreed upon and communication about joint decisions are usually more well-conceived, fluid, and well accepted.
  • Stakeholders are apprised of milestones and results are shared on a regular basis.
  • Successes are shared and challenges are addressed together.

Eventually collaboration can result in true partnership with a history of joint success.

As Henry Ford said, “Coming together is a beginning. Keeping together is progress. Working together is success.” Whether policing like the FBI, producing automobiles like Ford Motor, or providing consulting services like Slalom Consulting, collaborative teamwork provides a better result. Let’s make sure we’ve always got our eyes on the extra value that will get our clients what they need.

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About Carl M. Manello
I am Slalom Consulting's Practice Lead for Delivery Effectiveness. I work to support organizations' capability and delivery maturity -- not just IT organizations -- so that their initiatives run more predictably, efficiently and provide the best results.

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