The ten signs of a deteriorating vendor relationship – part 1

1. A Time & Materials project is used as revenue generator.

This is an easy sign to spot. Typically your vendor will repeatedly deliver late against the plan. You will also discover that what is delivered is either incomplete or of such a poor quality as to be unusable. Each iteration of the deliverable will improve, but only slightly. In doing this the vendor is really saying to you that they don’t respect you. As a result it is easier for them to just throw something substandard over the fence and let you waste time and money telling them what they already know i.e. what is wrong with it.

How can resolve a situation like this? First talk to the vendors’ engagement manager. Discuss the problem and leave them in no doubt that you expect the situation to change immediately. If they don’t take this on board then immediately escalate with senior management both in your organisation and the vendors. If you still see no change in attitude then you need to reassess the relationship and fast.

If you find yourself at this point, usually your mistake has been in not putting penalties for poor performance into the agreement. If you do have them, impose them or at least threaten to do so and you will hopefully see a marked improvement in attitude from the vendor. But even this may not be enough to salvage the relationship if things have deteriorated to the point of actually imposing a penalty. By that time you are probably in the position of working through your respective legal teams.

As indicated in my previous post you will have to balance the penalty clauses with incentives for exceeding expectations as it is highly unlikely that a vendor will agree to terms that are solely or heavily in your favour.

2. Their tasks become your tasks.

In technical projects you will find this exemplified by the phenomenon of design by review. This is where your vendor will give you “something” that has the right name on it. However, the contents will be partial and bear no resemblance to the requirement. In order to correct it your team have to provide detailed feedback on where the deliverable does not meet the requirement and why. Along with this will be the need to provide detailed suggestions as to what will meet the requirement.

The next iteration of the document will include some of the information provided plus additional sections that require a separate review and feedback. This cycle will continue until your team has supplied the content of the document in their review comments. Here as above you find that you are wasting time and money telling the vendor what they already know.

Again this should be discouraged by including penalties in the contractual agreements.

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