The vendor selection process begins with defining the technical and business requirements. It is not necessary that you will get all the best functionalities and services from a single vendor. To handle multiple tasks of a huge project, multiple vendors are the need. Although the cost and complexity are high as you need to purchase separate modules for a solution. Vendor survival is another factor for consideration. You definitely want a long-term association with vendors for the supply of services. There are chances that your competitors buy your vendors once they reach a success level. A number of challenges are involved with multiple ICT vendor relationship management.
Businesses require various specialized skills to manage multiple IT vendors. This agility is important in a continually evolving ICT landscape and provides distinct advantages over a one-size-fits-all single-vendor model. Multiple vendors management might create engagement complexities.
Challenges Of Managing Multiple ICT Vendor Relationships
It is a challenging task to get all vendors to work together for the delivery of services. A big competitive tension might occur when multiple ICT vendors are involved in the delivery of various tasks within a huge project. They might start developing their scope of work. This will cause conflicts between IT vendors, suppliers, and clients. It is highly important that contract managers or the responsible person who is managing vendors should communicate limits for each work.
This challenge can be handled by using the procurement process. It will capture various details such as vendor background, experience, communication style, etc. Involving psychologists in the process can also be helpful. They can sense the behaviour pattern of ICT vendors that will help in the selection procedure.
Relationship governance is an integral part. Make sure that IT vendors should have a clear understanding of requirements, deliverables, processes, etc.
Whether Having Multiple ICT Vendor Relationships Is The Right Approach Or Not
- Check the maturity level of your business.
- Find out if employees/project managers will be able to handle relationships with multiple vendors, are all involved parties are aligned with common goals.
- Find out the gaps in your business for managing multiple vendors.
- Find out the lacking skills and bring industry experts for training/demonstrations/knowledge transfer (if required).
How to effectively manage multiple vendors?
Governance is important for open communication and promoting constructive relationships between vendors and customers, as well as among vendors. The process and structure of governance should be clear, simple, and with no conflicts. This will ensure the quick identification of issues and their resolution as they occur.
Share all the contract details at the beginning of the project. Educate all the parties involved about their role and responsibilities. The project commercial managers should stay true with the contract. Vendors should not be allowed to dictate the terms. You can divide the contract into various projects having entry and exit points. This will allow remediation/termination without any cause or cost impact. The benefit of such a practice is that it will put pressure, and all vendors will work together.
Also, don’t forget to include some flexibility in the contract as the project might get deviate in some productive directions from the documented deal. The flexible mechanism should be able to address gaps (if any) and narrating how parties should collaborate to resolve/ manage the grey areas.
Auditing is a good way to find out the deviations. Plan an audit after six months to check if there are any deviations from the contracted obligations. It there are any, make amendments for a documented deal.
If The Vendor Is Not Performing
Projects mostly fail due to the negligence of a number of little things. It is advisable not to ignore even the smallest issue related to vendor performance at the starting of the project. This helps in clarifying and enforcing service expectations. It also prevents big and repeated performance issues.
The contract should have an appropriate balance between the termination of services and communication of issues when a discussion is possible. It is not wise to pursue and paying costs across all vendors if some are not achieving the set goal and giving the required results.
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