Vendor management`s main task is to gain profits for the company from cooperation with vendors as much as possible. Mostly, relationships with third-party vendors are limited to simple business transactions. However, due to vendor management, there are ways of getting benefits for the business workflows from this cooperation.
To provide efficient vendor management, it is important to build an appropriate vendor management strategy to find out which vendors are suitable for a particular company and industry:
- if they offer the required functionality corresponding with the costs;
- whether these vendors consider legal requirements and compliance;
- what number of vendors is required;
- risk management and prevention failures;
- what values these vendors can bring into a company.
So here comes a question – what is the best way of building a suitable and correct vendor management strategy in software outsourcing? We have prepared a list with the top tips on how to choose the right third-party vendors for your business.
Define the clear goals and values of your project
Before the start of cooperation, the vital step is to define what you are expecting from this cooperation and what business goals you want to reach. The main point is transparent and well-structured documentation related to your project specifications. Then we recommend holding a discussion of this documentation to define the main aspects of the further cooperation. What should this document package contain? The next docs:
- project technologies and manuals;
- described app architecture including code;
- define the project’s objectives, core features, and functions, etc;
- specify the expected budget and timelines.
As the documents are approved and signed from both sides, you can continue the discussion of the actual cooperation.
Choose an experienced and reliable project manager
If you don’t want to miss a thing and any tiny detail about your project, it is an important phase to look for and hire a dedicated outsourced project manager who will be a connecting link between you and the vendor. The project manager is the person that has to have enough experience skills to define whether your vendor management strategy is appropriate and if the vendor you would like to choose suits your project. The project manager is tasked to build the plan of how your cooperation will develop, determine what options you should pay attention to before signing the documents, and approve the plan of the partnership.
Communicate often and clearly
Regular communication is half of the success of any type of project. Your project manager is responsible for providing video meetings with your vendor to discuss the future plans, check the tasks that have been already executed, and define their efficacy for your project. Along with text messages and video meetings via Slack or Google Meets, it is also vital to choose the tool where you can track the performance of the tasks, assign them to suitable specialists and see the final results, for example, Jira or Trello.
At GBKSOFT, we provide constant communication with our clients any time of the day as we value our clients’ time and trust and do everything possible not to fail them.
Vendor cooperation is about long-term business relationships. Constant changing of the vendors can lead to losing many costs, reputation, and wasted time. If you aim to build a long-term partnership, consequently it will bring your project more benefits as this cooperation will be built on trust, common goals, and qualified outcomes.
Choose quality first
Do not try to economize from the very beginning. We are not saying that low price always implies low quality but in most cases, this is unfortunately true. You must ensure that your vendor is focused on delivering highly qualified services that will be surely efficient for your project and company as well. Of course, such vendors can ask for an extended budget and you have to be ready to widen it if you are willing to reach your main goals.
Identify your KPIs
KPIs are an inevitable part of your vendor management strategy. There should clearly define indicators that allow you to measure the results of your partnership from the very beginning and to the very end. Your vendor management plan can be changed during the cooperation due to the updating of business goals and requirements. That’s why we recommend evaluating the outcomes not only in the end but during working on your project so that everyone engaged in your project knows about their key responsibilities. The KPI criteria and formulas should be strong and correspond to your business values. These points can also be changed – added or deleted – according to the project priorities and tasks.
Learn vendor`s business and culture
The last but not least tip is to learn the peculiarities of vendor business and particular company culture. It means that you should be aware of what profits the vendor`s company gets from your cooperation and how it impacts their company in general. Talking about culture, this option is important to figure out before the start of the cooperation. As this is outsourcing software development, there is a probability of misunderstandings between your and the vendor`s company due to cultural issues. So we recommend you pay attention to the next features:
- the location of the vendor’s company;
- time zone;
- national specialties and differentiators;
- company internal structure and policies;
- common business ethics for their location;
- usual working days and hours;
- religion and its peculiarities.
Some things may seem to be not really important but you should never eliminate human factors that can surpass business cooperation.
Outsourcing software development requires a detailed investigation of your future partner to avoid any kind of misunderstandings and confusion that can lead to disappointing outcomes.
Considering all tips we have discussed above can surely help you build strong and long-term partnerships with vendors that will share your business goals and lead you to their achievement.
About the Author: content creator that mainly focuses on researching the latest trends of web development that aim to boost the business workflows efficacy and increase outcomes