Working with vendors is a very common occurrence in project management as it will be very rare that your team will have absolutely everything it needs in-house to complete their assigned tasks. Whether it’s physical materials, online storage or hosting, outsourced support lines or any number of other external needs, vendor relationship management will play a key role in deciding the outcome of your project.
While vendor management and project management might be inextricably linked there are marked differences between how they are approached.
Team vs. Vendor Communication
As a project manager, communication with your team is one of the most important elements of your job. Gathering and relaying task information, as well as addressing issues and creating a productive atmosphere are just some of the areas you need to be able to excel in.
With vendors however, your communication has to be quite different. While the tone can still vary between being formal and appropriately informal depending on your closeness, you are looking to get different results from the relationship.
Your team needs to be supported in being as productive as possible with a lot of variables that can prevent that from happening. On the other hand, you basically only need your vendors to stick to the terms of their contract, supply what you need on time and at the quality that’s expected. This narrower focus can make it a lot easier to focus your vendor relationship management on achieving exactly what you want.
Possibilities for Change
When managing your team, personnel changes are not something that are seen as a positive for the project, often PMs will try many strategies to improve how someone fits into the scheme rather than dropping them completely.
Shopping around different vendors though is completely normal and can give a great boost to your project if you get better terms or improved service or quality from your suppliers. Therefore, the possibilities for change can affect your vendor relationship management as you both know that the relationship might only be temporary, and you owe little to each other, whereas loyalty and persistence is more common with employees in your own team.
Vendor Buy-in
As a manager, sometimes tough decisions have to be made on the direction a project is taking. Maybe the scope will have to be changed or it may have to be cancelled completely. With your project team and internal stakeholders, you can discuss this and hopefully gain their backing for your course of action.
With vendors, achieving this kind of buy-in can be a lot more difficult. Though they might appreciate your custom and your own personal approach, if they can’t see an advantage for themselves in the long-term they are often unlikely to provide the support you need for a shift in direction.
Different Targets
As a project manager, your objectives, milestones and deadlines are often set in stone and directly applicable to the success and progress of your project. Your vendors will also have their own unique and specific KPIs that they will be expected to maintain and improve.
This can sometimes lead to you pulling in two different directions, a vendor may wish to frontload or delay supply, increase price or cancel parts of their obligations as best suits their goals. Deciding whether to allow this and what you can do if you disagree are vital elements of working with vendors successfully.
