Managing Vendors – Articles by Jim Everett

Tips on managing vendors, skills and competencies required

Skills Needed to Manage Vendors

Posted on | November 30, 2009 | CLICK HERE TO COMMENT OR ASK QUESTION

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Skills Needed to Manage Vendors
Except for seasoned managers of outsourced programs and projects, many professionals who find themselves taking on this responsibility suddenly become aware of all the things they need to know and be good at doing. These are the lucky ones. Many struggle with the role, doing their best, but are unaware of all it takes to be successful in the long term. They end up working harder and often being frustrated and surprised by problems that arise, and things that do not go as expected.
In this post I continue to examine what it takes to be effective in managing vendors and, hopefully, find the role satisfying through being effective and influential. Hopefully this will be valuable for professionals about to be assigned to manage outsourcing, those who are already in the role and finding their way, and to more senior managers who are setting up those who will manage outsourced work.
________
Projects and programs can vary enormously in scope and scale. Both can be large enough to have an executive in charge, with multiple Vendor Managers responsible for single programs and projects, or components. Unless I indicate otherwise, I focus on the role of a Vendor Manager who is solely responsible for the day-to-day management of a single project or program.
In the previous post, I talked about differences between Project Managers and Program Managers. In this post, I bring those together and look at what they have in common when it comes to skills and expertise. And for this post, I have left out the stages of establishing an outsourced initiative, defining the work, and selecting a vendor. That is a whole extra dimension that I will talk about in other posts.
People chosen for the job of vendor manager are typically those who have been working on the specialized function that is being outsourced. This depth of knowledge of the subject is very important. They know the underlying subject matter, and the kind of results they are looking for. They may also have management experience – of internal teams, project management, budgets, quality, conducting meetings, planning and review. All of these are helpful in the outsourced management work.
But there are specific areas of expertise that come into play when outsourcing. Either they are unique to managing outsourcing, they take on much greater importance, or have to be applied differently. Let’s look at just a few of these, to highlight some differences.
If you are a vendor manager, assess which of these you feel that others would rate you as “Strong”, or which of these are areas where you need to build expertise:
Communication – with people in other disciplines (specialist managers are often shielded from this)
Relationship skills as an essential part of working with vendors and stakeholders. This involves a broad range of communication skills, problem-solving, leadership, accommodation, flexibility, support, understanding and more.
Problem-solving against a contract-driven relationship, rather than with a team of colleagues
Meeting skills – more formal requirements in outsourcing to set up agendas and required outcomes, then monitor and document decisions, resolutions, responsibilities and follow-up
Industry knowledge and market economy – the context the vendor is working in, how to anticipate changes
Cross-cultural communication, agreements, business processes with the “same company” underpinnings
Negotiating across company boundaries, with “outsiders” and with a contractual baseline
Risk management (internally and with vendor) – analyze, anticipate and balance risks and responses
Quality control and management based on specified metrics and service levels, best practices
Management with contractual authority versus line management
Legal elements – Agreements, contracts, liability, intellectual property, assets ownership, international laws
Documenting and reporting – results, changes, costs, meetings, agreements, problems and resolutions, lessons learned
Financial skills, analyze and compare project budgets and costs
Business basics to understand vendor business models and health
Operational processes and procedures, including vendor structure and supply chain
Working with multiple stakeholders inside own company and client organizations
Partnering methods and requirements as a way of doing business with vendors
Governance of outsourcing within the company, and how it works, from initial sourcing to executive review
These are just some of the areas of expertise for a manager of outsourced work. Assessing strengths and identifying areas to develop is just the start. The next step is to look at where and how to gain the knowledge and skills, and who can help in this. First, what does it look like when someone is strong in any of these areas? What do they do differently that reflects this strength? And how does their work benefit?
I am currently working on a more detailed checklist and assessment form outsourcing expertise, which I will post on the Think180 site, with a link in this blog. If you would like to be notified when it is available, please email me, or follow on Twitter.

Except for seasoned managers of outsourced programs and projects, many professionals who find themselves taking on this responsibility suddenly become aware of all the things they need to know and be good at doing. These are the lucky ones. Many struggle with the role, doing their best, but are unaware of all it takes to be successful in the long term. They end up working harder and often being frustrated and surprised by problems that arise, and things that do not go as expected.

In this post I continue to examine what it takes to be effective in managing vendors and, hopefully, find the role satisfying through being effective and influential. Hopefully this will be valuable for professionals about to be assigned to manage outsourcing, those who are already in the role and finding their way, and to more senior managers who are setting up those who will manage outsourced work.

________

Projects and programs can vary enormously in scope and scale. Both can be large enough to have an executive in charge, with multiple Vendor Managers responsible for single programs and projects, or components. Unless I indicate otherwise, I focus on the role of a Vendor Manager who is solely responsible for the day-to-day management of a single project or program.

In the previous post, I talked about differences between Project Managers and Program Managers. In this post, I bring those together and look at what they have in common when it comes to skills and expertise. And for this post, I have left out the stages of establishing an outsourced initiative, defining the work, and selecting a vendor. That is a whole extra dimension that I will talk about in other posts.

People chosen for the job of vendor manager are typically those who have been working on the specialized function that is being outsourced. This depth of knowledge of the subject is very important. They know the underlying subject matter, and the kind of results they are looking for. They may also have management experience – of internal teams, project management, budgets, quality, conducting meetings, planning and review. All of these are helpful in the outsourced management work.

But there are specific areas of expertise that come into play when outsourcing. Either they are unique to managing outsourcing, they take on much greater importance, or have to be applied differently. Let’s look at just a few of these drawn from our workshop, “Managing External Resources“, to highlight some differences. If you are a vendor manager, assess which of these you feel that others would rate you as “Strong”, or which of these are areas where you need to build expertise:

  • Communication – with people in other disciplines (specialist managers are often shielded from this)
  • Relationship skills as an essential part of working with vendors and stakeholders. This involves a broad range of communication skills, problem-solving, leadership, accommodation, flexibility, support, understanding and more.
  • Problem-solving against a contract-driven relationship, rather than with a team of colleagues
  • Meeting skills – more formal requirements in outsourcing to set up agendas and required outcomes, then monitor and document decisions, resolutions, responsibilities and follow-up
  • Industry knowledge and market economy – the context the vendor is working in, how to anticipate changes
  • Cross-cultural communication, agreements, business processes without the comfort of “same company” commonality
  • Negotiating across company boundaries, with “outsiders” and with a contractual baseline
  • Risk management (internally and with vendor) – analyze, anticipate and balance risks and responses
  • Quality control and management based on specified metrics and service levels, best practices
  • Management with contractual authority versus line management
  • Legal elements – Agreements, contracts, liability, intellectual property, assets ownership, international laws
  • Documenting and reporting – results, changes, costs, meetings, agreements, problems and resolutions, lessons learned
  • Financial skills, analyze and compare project budgets and costs
  • Business basics to understand vendor business models and health
  • Operational processes and procedures, including vendor structure and supply chain
  • Working with multiple stakeholders inside own company and client organizations
  • Partnering methods and requirements as a way of doing business with vendors
  • Governance of outsourcing within the company, and how it works, from initial sourcing to executive review

These are just some of the areas of expertise for a manager of outsourced work. Assessing strengths and identifying areas to develop is just the start. The next step is to look at where and how to gain the knowledge and skills, and who can help in this. First, what does it look like when someone is strong in any of these areas? What do they do differently that reflects this strength? And how does their work benefit?

We have just added a new service – a detailed process and assessment for outsourcing competencies. You can read more at the Think180 site page, Capabilities for Managing Vendors

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Think180 helps companies get the best results with their service providers (vendors). Our core product is an in-house customizable workshop for Delivery Managers, or entire teams who outsource. This has been run successfully for many clients, including Palm, Philips, Harrah's, BP, Vantive, Avaya and others.

We now also offer live and interactive videoconference services - Training Modules for team events, and 1:1 coaching for individuals with videochat (desktop and mobile) on managing vendors.

Call 310.694.0414 for more information to see if this service could be of value to you.

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