Vendor management is the process of initiating and developing relationships with your specialised vendors, who will be heavily integrated into your team's workflow and might be contributing a pivotal component on which the project hinges. Vendors could be freelancers or small teams, either way they’re a dependency and will need to be managed to make sure your project continues to progress on schedule.
We’ll look at selecting vendors, establishing payment terms, negotiating contracts, and managing relationships.
Identifying Suitable Vendors
The first step in vendor management is identifying and evaluating potential vendors. Look for vendors with a proven track record in delivering high-quality services in your field. Take into account their reliability, expertise, cost-effectiveness, and the consistency of their previous work.
If possible, get recommendations from people who might have worked with them (in your network or by reaching out to some of their clients). I've had some serious disappointments with vendors, as have most producers, the vetting process might avoid you unnecessary stress!
Your team will often suggest their preferred vendors, it’ll be up to you to confirm their availability, capability and cost. Sometimes it is worth delaying part of a timeline to work with a vendor you trust to deliver the quality you have in mind.
Building strong relationships
Don't yell at your vendors - there's just no benefit. If you antagonize them the quality of their deliveries won't increase, although sometimes a firm - but respectful - approach is necessary.
A healthy vendor relationship is based on mutual respect, trust, and clear communication. Establish open lines of communication and ensure that your expectations are clearly understood, as are the deadlines and the dependencies you have. If you expect them to work overtime to deliver something in a rush, make sure they’ve agreed to that.
Be respectful of their time and expertise, and honor your commitments to maintain their trust. I’ve worked with my vendors and freelancers as partners for almost a decade, they know I’ll treat them fairly and invite them on more projects in the future if they continue to deliver above expectations.
To conclude - make sure your brief is crystal clear and trust them to be professional.
Monitoring performance & crisis management
This is very important, don't wait until it's too late (I've been there!). Set an intermediate deadline, or review some drafts early to confirm they’ve understood the brief and see how quickly they can pivot if they haven't.
If you see that your team's feedback isn't being understood it means the client's won't either, if they're slow to deliver they're either overstaffed on other projects or disorganized - your project isn't a priority. If they get defensive, they're working against you not with you. You don't want any of these things on a complex project so I recommend you talk to your team and cut your losses as early as possible, the decision is difficult but not as difficult as it would be two weeks later.
In your vendor evaluation phase you should have contacted a few other candidates, some of which might be a fit and have availability - these are your contingency plan. Remember that having this contingency in place is your responsibility, no one else on the project will take that on.
As you're preparing to terminate the contract with the new vendor you were testing, you can confirm your preferred vendor (or just another recommended vendor) is available to take up the mantle. I sometimes had the contingency vendor start before I terminated the first contract to make sure that we had every possible scenario covered.
To this day I have never had to terminate two vendor contracts in a row for the same deliverable.
A clear, well-structured contract is the backbone of your vendor relationship - it'll set expectations in black and white and create accountability for your vendor. When negotiating contracts, be sure to establish clear terms for the scope of work, timelines, payment terms, and deliverables.
Vendor challenges can come in different shapes. Cultural differences, time zone differences, communication barriers, or the run of the mill underperforming vendor.
You’ll need to be proactive and identify what is causing the problem to compensate accordingly. If it's communication issues, have a discussion to either educate them on your communication preferences or find out their optimal method that will give them the ability to optimise for their internal processes and talent. Understanding and respecting cultural differences can also improve your relationship with international vendors - they might have different days off or approaches to feedback.
If your budget includes external costs use the Supplier Agreement template to prepare a contract for your vendor, use the dates you have planned in your project timeline to define when they should be delivering.