Saturday, January 06, 2007

Vendor Management - a Project within a Project

In previous posts (Cost Management is not Optional and Risk Management is not Hard - do it), I covered two very important project management Knowledge Areas (PMI terminology) which are not practiced enough in the software industry. I noted that they can be practiced relatively easily (at least at the basic level). Vendor management, on the other hand, is the opposite. It is something most SW projects have to deal with and it's not easy. The reason: if you look at it closely, it actually comprises a whole project unto itself. A project within a project. You need to plan and execute a special version of all Knowledge Areas for the vendor management, separately (yet interdependently) from your own project. And then some.

  • The vendor represents its own stakeholders that require stakeholder management.
  • You need to develop the vendor schedule..
  • You need to define the scope of the vendor work.
  • You need to work out the financial part.
  • And you need to plan and execute all the other areas: Human Resources, Quality, Risk, Communication, etc.
And, as I note above, there is more that is unique to the vendor management:
  • The vendor's interests are usually contradictory to yours. You want maximum scope with minimum cost. The vendor wants minimum scope with maximum pay (that's cost for you). This forces you to
    • Negotiate.
    • Be extra vigilant.
  • There is the whole legal part. There must be a contract between your company and the vendor. Although putting the contract together is not your job, you, as the project manager, have a responsibility to ensure it happens. Don't dare to work without one. it may work out a couple of times but then there will be that one time when things go wrong, there is no contract in place and you'll regret it for the rest of your life. Besides, agreeing to work without a contract demonstrates that you are not professional.
All of the above introduce a full range of activities of a typical project into your project. As I said: a project within a project. Make sure to manage your vendor as a project.
Technorati Tags: , , , , ,


Anonymous said...

Can anyone recommend the top Network Management tool for a small IT service company like mine? Does anyone use or How do they compare to these guys I found recently: N-able N-central help desk software
? What is your best take in cost vs performance among those three? I need a good advice please... Thanks in advance!

Project Management Software said...

Executing consists of the processes used to complete the work defined in the project management plan to accomplish the project's requirements. Execution process involves coordinating people and resources, as well as integrating and performing the activities of the project in accordance with the project management plan.