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:
- 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.
- 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.
- 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.
- 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.