How are your vendors performing?
A simple, seemingly innocent question that might result in some quizzical glances, depending on whom you ask.
Surely, someone in procurement will have the answer, right? But procurement doesn’t work with your vendors on a daily basis; their only interactions are related to contracting with, onboarding, or offboarding your vendors.
Someone in project management will have the answer, right? But if they do, it’s largely anecdotal. You’d have to go ask each team member individually what they think, and those answers are usually qualitative and vary from person to person.
We believe there’s room for improvement in how organizations work with vendors. After all, vendor management IS a critical part of project management.
Yes, project management also entails scope, risk, schedule, budget, and quality management.
But given the extent to which project activities are outsourced these days, project management largely involves identifying, selecting, contracting with, and managing suppliers of equipment and services to achieve project objectives. This is especially true for smaller organizations, where it isn’t always cost effective to hire in-house.
Project management often works closely with procurement for vendor selection. In a sense, this is just one more activity that the project management team is outsourcing- albeit to an internal entity, not an external one. For some organizations, this working arrangement is very formal and rigid; for others, less so.
Regardless of how a vendor is identified, selected, and contracted, once the vendor is onboarded, they can start providing the requested equipment or services. And that’s largely the extent to which most organizations are doing vendor management today: simply having a process in place to select the right vendors, ideally in a timely and cost-effective manner.
But is that really sufficient?
I said earlier that vendor management is an important part of project management, but let’s consider the other parts of project management. Take schedule management for example. What if we exerted all our effort on creating a schedule, and then didn’t spend any effort our tracking or trying to improve our performance against the schedule? Surely this approach would not produce good results for the project's schedule performance.
Extending that analogy to vendor management: if we don’t know how our vendors are performing, how do we know that we selected the right vendors in the first place? If the information is simply anecdotal, then it’s unlikely that it is being fed back into the initial selection process to guide the procurement and project management team when they make decisions on selecting future vendors.
A vendor is only as good as their work (or products). And the only way to determine if their work is good is if it is measured during performance.
We understand there are a number of challenges with vendor performance management, stemming from the broad range of vendors and suppliers which can make it difficult to perform relative comparisons, to the lack of dedicated software for vendor performance management.
At THAMPICO, we believe that the best way to evaluate your vendors is by building a dedicated process into your own project management software platform. We have experience integrating vendor performance into the leading PMIS platforms. Most importantly, we know how to build a sustainable, transparent, and customized vendor performance management process so that it ends up being utilized as intended by your project and procurement teams.
Ready to take your vendor management to the next level? Contact us today to learn how we can help you integrate a robust vendor performance management process into your project management framework. Let's work together to ensure your vendors deliver the products and services you need to achieve your project goals.
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