Appearances Matter

Many organizations rely on outside vendors for their technical or professional services, materials, or other special needs. Those needs could be specialty skills, bulky or fragile materials, and other needs that are not practical to provide in-house. Clients and customers might never know that vendors are involved because they appear to be part of the organization.

 

Appearances can be deceiving but they really matter. Vendors intended to help organizations with expertise or capacity can end up hurting instead, if they don’t perform as promised. And if they appear to be part of the organization, guess who ends up getting hurt and looking bad? You guessed it – the organization!

 

Three simple steps help organizations avoid vendors who appear to be helpful, but end up hurting productivity, profit and reputation:

 

  1. Do Your Homework

There are a lot of choices out there, not all of them good. Weeding out the dreck and identifying vendors that meet the organization’s standards takes time and effort, but it really pays off in results. Start by defining your standards for quality, timing, and other specifications necessary for the vendor to meet the organization’s productivity and reputational needs. Involve your network and professional associations to get referrals that appear to meet the standards that you defined.

 

  1. Get Proof

Sure, trusting your instincts is part of selecting from the referrals you get. But relying solely on a prospective vendor’s word about her or his track record is an invitation for issues — expensive issues. Ask prospective vendors to provide proof of her or his performance. References provide insight, too, but other organizations don’t share your objectives, requirements and standards. It’s not a one-size-fits-all world, so make sure you get proof that you can trust the vendor to deliver.

 

  1. Monitor and Inquire

Once the vendor choice is made, it’s important to have confidence going forward that the choice was a good one. That takes regular monitoring and periodic inquiries to let you know that the vendor is helping, not hurting. Figuring out what to monitor and how takes time and effort, just like Doing Your Homework. Monitoring not only provides the organization with peace of mind, it lets the vendor know you’re watching and you care about performance.

 

Relying on vendors can be great, but it comes with risks. Protect your organization’s reputation and bottom line by managing vendor risk using the three simple steps above. Sure, it takes time and effort, but it’s well worth protecting your organization from being hurt by a vendor who appears to be helpful, but is hurting your organization instead.

Agreements Hold Vendors Accountable

When your organization is growing, or in need of a specialize skill set, outsourcing can be a real life saver. Bringing on a service or product vendor is intended to help, not create more to manage. The clearer you are about what you need, when you need it, and how, the better a vendor can meet your needs.

 

How can you increase the chance that a vendor will deliver and add value to your organization? Have a written agreement that addresses key components of the vendor’s responsibilities. Addressing these four items in your vendor agreements will clarify expectations to hold vendors accountable:

 

  1. Objective and Scope

Clearly describe the result that the vendor should achieve. Focus on what needs to be accomplished. Specifically describe what the organization expects to get when the vendor’s work is completed. For example, an agreement for an IT vendor to install and maintain a new system would describe, among other things, the end state after the system is installed, capacity and performance requirements, and the maintenance plan.

 

  1. Time Frame and Frequency

Specify delivery dates and how often your organization needs the goods or services provided. Clarify any unusual needs you have, such as nights or weekends, to avoid misunderstandings   preventing you from meeting your customers’ expectations. How would it look if a 24/7 café couldn’t get fresh food delivered on a Sunday? Highlight timing and frequency to make sure your vendor knows when you need her or him.

 

  1. Delivery and Acceptance of Goods or Services

Describe the expected condition, appearance, format, or other requirements that are essential for the goods or services to achieve your organization’s objective. Do the flyers need to be blue with your logo? Does the training class need to be two-hours long and meet specific learning objectives? Should goods be delivered in a certain way? Don’t presume that the vendor will understand your needs. Put them in writing.

 

  1. Cost

Last, but certainly not least, make sure the vendor’s total cost and when payment will be made are clear. Specify what is included in the total cost and how that cost is calculated. For example, is the cost for paper per box or per carton? Does the consultant cost an hourly rate plus expenses, or are expenses absorbed by the vendor? Stipulate that payment will only be made after goods or services have been accepted, or when a specified objective has been met.

 

Help can be great. It’s not so great if that help doesn’t meet your organization’s needs. Increase the chance that your vendors will deliver. Have a written agreement that clarifies expectations and holds vendors accountable.