Question

List and defend at least three qualities that you, in the role of project manager, would look for in a vendor if a project you are managing chooses to outsource or purchase from the outside? List some suggested criteria for selecting a vendor.

Answer 1

Many companies choose to outsource most of their functions or just a handful of them to vendors so that they can focus on core business aspects.

The vendors that the company decides to choose for their projects should have some inherent qualities in them so that the professional relationship sustains in the long run. Some of these qualities are

Experience- This is a very important quality of a good vendor. It is one who has enough experience in the industry and have gone through pains of being a startup, seen market volatility, unforeseen service delivery issues firsthand and stay prepared when there are unexpected outages.

Commitment- A good vendor is always committed to the company’s goals and vision. They work with the company to be able to delivery quality service.

Expertise and knowledge- It is another important quality wherein the talent pool of the vendor uses it's knowledge and expertise in delivering high quality of service. These vendors and their talented workforce can prove to be an asset for the company.

Whether it is outsourcing all or some important projects, companies need to take into account some important criteria regarding potential vendors, which will help them take the informed decision.

1. Need to ascertain if outsourcing to a vendor will help in reduction a significant amount of capital in hiring and equipment. There should also be a balance between the quality and quantity of the services provided by the vendor.

2. Instead of finalizing the cheapest vendor, compare and find out what other vendors are offering. Although price is an important factor, it should not be the only factor that helps to decide on a vendor.

3. Need to ascertain the resources, tools and technologies the vendor will use for the project and how capable are they of handling all the outsourcing requirements.

4. Adherence to deadlines in outsourcing is as important as the costs. For instance, if a vendor fails to complete the project in the deadline, it can lead to major bottlenecks. Hence need to ensure that the vendor adheres to the promised quality and deadline.

5. While deciding a vendor to work on a project, it’s a given that they should be capable to take care of everything from the scratch. Finalizing a responsible vendor who will be in charge of the projects is a must so that there is minimal supervision.

6. There are some areas that can build up liabilities for a business. This eats up time and money, which can be used elsewhere. Clever outsourcing of certain functions to vendors reduces the liabilities to an extent.

7. Need to research on the internet to find out more about the vendor, the infrastructure, safety practices and the team that works there. This will help to assess the reliability of the vendor. Checking with a reference who has worked with the vendor in the past, you can also ask them about the firm is also important.

8. Finding out the team members with the vendor who’ll be working on the projects and who’ll lead that team is also an important criteria.

9. SLA (Service Level Agreement) is one of the most crucial documents while deciding a vendor. At the time of creating the document, ensure that every single detail is written clearly. This will help you avoid any kind of confusion or ambiguity especially about the quality of the services.It is important to hire a lawyer especially to manage this so that there is no legal trouble later.

10. The vendors should be able to handle all queries and promptly reply to the same Their communication needs to be spot on without any cultural or communication barriers. This ensures that they have clearly understood the requirements and can address any issue that may come up.