Managing Vendors – Articles by Jim Everett

Tips on managing vendors, skills and competencies required

Watch those assumptions

Posted on | April 17, 2008 | CLICK HERE TO COMMENT OR ASK QUESTION

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This week, I paid a contractor to paint my patio doors at home. And out of this came a reminder of one of the key points we (Think180) make to clients, whether they are outsourcing large projects, or bringing in a single contractor. That is to be aware of the assumptions you make when you engage an outside resource.

So, let me tell you the simple story of my patio doors, as a metaphor for contracts of any size.

The white French doors to our deck face south, and were getting weathered. Although I have done lots of house painting and renovation myself, I wanted someone to take care of it this time. This would free up my time. I selected a contractor I had seen working before, and who came recommended. His rates were reasonable, and he seemed accommodating to my needs.

We set out a scope of work, and he put in a bid. He asked if we preferred gloss or semi-gloss, and we chose the latter, as well as the color of Ultrawhite. I briefed him on the requirements of the job, and the standards I expected. We agreed on a start date. He turned up in the morning and began work.

I thought I had covered everything.

Later in the day, I dropped by to inspect progress, and discovered he was using acrylic paint, with a roller. And the day was warm and dry. As a result, the finish had a slight stipple, not what I had in mind. As it dried, the stipple diminished, but was still not the sleek semi-gloss I had envisioned. He had not used the paint that I would have used. And I would have brushed and delicately laid over for perfect finish.

And therein is the root of the difference. Because that is what I would have used, I assumed that he would do the same. In fact, I did not even assume! It did not even occur to me that someone would use acrylic for this type of job.

Now that is just a simple case. In companies with large projects, these assumption points can run into the hundreds. That is why some contracts are real door stoppers! Even then, assumptions can be left out, or not communicated.

Take outsourced IT support, for example. Most contracts specify the time response (such as within 30 minutes in 8:00am-6:00pm working hours, within an hour response outside these times, six days a week). Some contracts even specify that the IT support contractor onsite will work with the user to get back up and running.

It is in this last area that problems can come up, especially with non-technical users. The IT person may fix a problem, and explain to the user what to do to rectify it. But unless the user actually “gets” it, then the explanation in not complete.

I recently heard about an office move that involved reinstalling computers and adding new ones. It was promised that the systems would be up and running (that is to say no lost productivity) after the weekend. When the staff came in on Monday, the computers and systems were up and running, but not linked to all the databases, or with full software installed. Assumptions.

Another is around outsourced payroll for an employee base of 20,000. The vendor was tasked with getting checks and payslips to employees by the end of each month. So the contract was written that the mailing would be done four days before the end of each month.

Then the problems started. Around 10% of the employees did not receive their notifications by end of month. And this created extra work and cost for the company HR group in fielding calls from disgruntled employees.

I suggested that they rewrite the contract so that it was specified that 98% of employees get their checks and slips by end of month. The client program manager argued that “she could not control USPS”.

In fact, with a number of 20,000 there is a pretty predictable distribution curve that could be used to determine the sendout lead time to guarantee a 98% success rate. The cost saving from fielding fewer unhappy callers would more than offset any additional vendor costs for staged mailings.

Yet the program manager’s assumption was that it could only be done as a single mailout, and after that, it was out of her control with no predictability.

I would like to hear your comments and experiences around assumptions you have got right by clarifying, and problems that have come up when assumptions have been left unspoken.

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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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