Don’t Catch a Crab, Avoid These Common Vendor Management Pitfalls

by

crew_web

(A crab is the term rowers use when the oar blade gets “caught” in the water. It is caused by a momentary flaw in oar technique. A crab may be minor, allowing the rower to quickly recover, or it may be so forceful that the rower is ejected from the boat.1)

In college I joined Texas Crew, a rowing club at the University of Texas. When we first started out, our team of 8 was not in sync, had a hard time communicating, and were more focused on showing off our skills than moving the boat in one direction. As you might imagine, practices were bumpy, our coxswain was hoarse, and everyone was frustrated at our lack of progress. This is exactly how I feel when I am working on projects where a vendor and an organization are not aligned. Organizations expect vendors to perform on time and meet a minimum set of expectations while vendors expect organizations to understand that delivery times are estimates and that expectations and requirements should be clearly and completely communicated prior to project start, but, as you may have guessed, things often work out quite differently. Then the project manager is screaming at the vendor because they are behind and not listening to the business, and the vendor is feeling overburdened because the organization’s needs and requirements keep evolving. There is a lack of understanding and both sides are moving in opposite directions instead of moving forward.

Vendors often play a significant role in information technology projects, and as the technology landscape continues to change, organizations’ reliance on vendors will continue to grow. Over the course of my career, in both consulting and campus recruiting, I have worked with at least one vendor on most all of my projects. Vendors come in all shapes and sizes and offer a variety of services, but regardless of the type of vendor, when you add them to your project you are assigning them responsibility for success of that project. And in these cases, neither you or the vendor can make that project successful alone. It takes collaboration, teamwork, and aligned priorities, much like a rowing team.

Many executives wonder why these relationships are so hard, but it is easy for a vendor and an organization to become misaligned, which is why having a dedicated sourcing department, or a set of dedicated resources with the skill set to manage your vendor portfolio, is key. But just because you have a dedicated department or set of resources focused on managing your vendors does not mean that the vendor and the organization will automatically be in sync and work smoothly together. Which is why it is critical that both the organization and the sourcing team are aligned just like the vendor and the organization need to be aligned. Similar to rowing, if one person is out of sync, you lose your competitive edge. Take a look at your vendor sourcing organization and see how they are selecting and managing vendors, and If you do not have a sourcing organization, think about the person or people responsible for vendor management. Is vendor management at your organization bumpy? Is your boat moving in the wrong direction? If so, it is likely that you are experiencing one of these common vendor management pitfalls and catching a major crab:

Failure to Communicate:

The business feels that they are not being heard by the vendor, the vendor feels that the business is being unreasonable and the project manager is just trying to keep the project on time and budget. Sound familiar? Communication is essential to project success just as it is for rowing success. Effective communication builds trust and respect, which not only improves the vendor/organization relationship but also increases the quality of deliverables and stakeholder satisfaction. Both the organization and the vendor are responsible for the success or failure of the working relationship. Accept accountability for your team’s part in the project by acknowledging that your decisions, delayed timing, or changes in project scope directly impact the project, and do not use the vendor/organization as a scapegoat.

Expecting a Vendor to be an Expert at Everything:

You do not need to understand every nuance about your vendor’s business model or operating procedures, but having a general working knowledge of the vendor will help you identify their strengths and weaknesses. Understanding the vendor will help you predict where you might encounter a challenge with the vendor, allowing you to create a net around that specific area and provide additional coverage or support where they need it. For example, if the vendor is really strong technically but does not have a strong project manager, you can assign an internal resource to help PM the vendor. If you are expecting the vendor to do something that they do not have the capability or knowledge to do, then you are rowing your boat directly onto dry land.

Incentivizing Vendors Through Penalties:

It is common for penalties to be woven into vendor contracts to protect the organization in those times when a vendor does not hold up their end of the deal. While effective, this does not encourage a vendor to produce quality deliverables, this instead encourages them to get the project done according to the schedule, regardless of quality. What if instead, you rewarded the vendor when they went above and beyond expectations? While thinking about worst case scenarios is important, assuming vendors will exceed your expectations, and rewarding them when they do, will go a long way to creating a strong partnership and aligning your priorities. Rewards do not have to be extravagant gifts; it could be as simple as a “Thank You” note or taking the vendor to lunch. Winning your race and receiving a medal is the ultimate goal, but team outings to eat breakfast tacos build camaraderie and motivate the team along the way.

Assuming a Vendor Adds Value:

Just because a person is sitting in your boat with an oar, does not mean that they are helping move the boat forward. Same applies to vendors. Just because a vendor delivered according to their contract does not mean that they added value to the business. It is important to develop KPIs to measure the value that vendors are adding. This will allow you to better understand which vendors are strategic partners and which vendors are not. Develop a scorecard or set of KPI’s that measurably define what your company desires to achieve through a vendor relationship, such as cost savings, increased performance, etc. Periodically assess vendors in your portfolio and communicate the results back to each.

flying-crew_web

In rowing, when everyone is in sync and communicating the boat seems to glide effortlessly across the water, almost as if it were flying. Similarly, when a vendor and an organization are in sync, higher quality deliverables will be produced and more value will be added with less struggle. Are your vendor management resources thinking about the pitfalls described above? If not, they certainly should be, or they may be doomed to catch a nasty crab.

 

1“Rowing Terms.” Boathouse District. OKC BOATHOUSE FOUNDATION, 1 Jan. 2015. Web. 13 Sept. 2016. <http://boathousedistrict.org/rowing-about/rowing-terms/>.

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