If I want to buy something, I end up browsing Amazon first. I might end up purchasing from somewhere else, but I tend to use Amazon as my shop window.
You can’t do that with project procurement. I can’t search for ‘buy ERP system’ or hunt around in Amazon for a data center hosting package that meets the needs of my software firm.
So where do you go to look for suppliers?
First let’s talk about why a Google search isn’t your best bet. Some companies don’t have the budget to rank continually in the top search engine results. Some companies wouldn’t necessarily want or need to. Searching online is always a good starting point but shouldn’t be your only way of sourcing potential suppliers.
Here are 5 other places that you can look.
1. Your Current Pool of Suppliers
You already work with suppliers – I’m sure of it.
Can any of these offer the products or services that you want for your new project? You don’t have to go back to the start and source a brand new supplier for every project if you have one contracted already who can do the job.
Using a current supplier is normally faster than having to go through a lengthy procurement cycle. They know you and your business so there’s less time getting them up to speed on your requirements.
However, if you aren’t happy with the service you are getting from them, then obviously think twice before giving them more work.
2. Trade Fairs
There is a world of trade and industry exhibitions that let you meet suppliers in real life before signing a deal with them. This is a good option if you have done some online or desk research and you want to move to the next level before finalising an offer.
Plus, entrance to many shows and exhibitions is free.
They can be hugely timewasting if you don’t have a list of target companies to go and see, so do your research before you arrive and head for the trade stalls where you think you’ll get the most value.
3. Industry Press
Look for who is advertising in your industry press (online or a print magazine). Look for who is putting flyers in the magazines that come from your professional bodies. These are potential vendors, and they are actively targeting customers in your area.
I’ve not come across an industry yet that doesn’t have awards, so reading up about the winners of these awards can also give you an insight into who are the movers and shakers in your target industry. Awards normally include neat case studies of what the company has achieved so you can see how they work with others and do what they do.
4. People Your Suppliers Use
If you have trusted suppliers, ask them who they use to fulfil their needs in a similar space and see if there are any connections there that would also work for you.
Often, the same companies come up time and time again because they are tried and tested. Your current vendors may well be willing to recommend people who are not competitors to themselves but who would complement the services they offer.
5. Word of mouth
Alongside asking your vendors, ask other people for recommendations. Ask your clients. Ask your colleagues. Ask your network on LinkedIn or here at ProjectManagement.com in the forums. People love to share stories.
Also, discreetly, ask for information on vendors whom they would avoid. This can be harder to find out but it is infinitely more valuable, as long as you trust the source.
These 5 sources of potential vendors will hopefully give you a list to choose from. You can then take that list and turn it into a shortlist for you to do a deep dive. Start your procurement activity from here – and you are no longer wondering who to invite to tender for your project work.
If your project needs you to work with a supplier, you’ll most likely go through an exercise to establish who to secure a contract with. Finding the right third party vendor for your project is a huge factor when it comes to a successful delivery. Making the wrong choice can be devastating if they then let you down or work in ways that are not conducive to your business.
This is an area covered in detail in A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition) where there is a whole section on procurement and contractual relationships.
It’s so important to ask the right questions so that you have all the information you need to make the right choices. Here are 5 questions to ask during your procurement exercise – they won’t be all you’ll need (you’ll still have to go through the full vendor selection with a proper process – but they will help you to clarify that this is a company you want to work with.
1. Will you use our systems?
If your exec team are used to looking at earned value calculations then can your supplier help you continue to do that by providing the right information?
If your Project Management Office uses a particular project management software tool, will your supplier be able to use that too? Are they happy to track time in your app?
If they can’t work in a way that supports your existing processes you will have to establish as a team whether you are prepared to change the way you work to fit the vendor.
And I imagine the answer will be no.
2. What isn’t included in the quote?
The proposal from your supplier will include a stack of stuff that is in the quote, but might not be so explicit about what they are leaving out.
For example, does their proposal include:
3. What else should we be budgeting for?
On top of the obvious things.
For example, change management: how much time and effort do their other clients normally spend on this and what do they recommend you budget for change management activities?
What go live support do they think you will need? Or, what go live support do you want? If this isn’t included in the proposal, ask them to cost up support to the level that makes sense to you. For example, if you have a large group of staff who are being asked to take on the use of a new piece of software, you might want individuals walking the floor of the office providing support in the first week. Or you might not, if it’s not a business critical piece of software.
Either way, it’s better to have those conversations now so you aren’t caught out later.
You can also ask them what contingency fund they think you should be budgeting for based on their prior experience of projects overrunning. This might help you move into a conversation about a fixed price solution…!
4. How much work have you done in this industry?
The answer to this question might not matter to you at all, and there could be a host of reasons why you are choosing to work with someone who has no industry experience.
But it is always helpful to find out their background if you don’t already know it.
Can you teach them what they need to know about your industry in the time that you have? If you can’t, and it’s important, then you might want to consider going with a firm that does have experience working in your sector.
5. References, please
Always, always get references.
This can be feedback from past or current clients or a site visit to see their work in action. They may or may not choose to accompany you on client reference visits. I think it’s better if they don’t as I think that promotes transparency.
If you can’t get to one of their past clients, at least have a conversation on the phone or try to see the solution on video or at an industry event.
Do as much research as you can so that you are going into this contract with your eyes open.
You’re potentially going to be working with this supplier for a long time, so it pays to do your homework and be as confident as you can about what you are getting into.
Ask these questions and everything from your vendor selection process and keep asking until you are happy and confident that you are making the right choice.
I know that project cost is an issue for most businesses. Here are some ways that you might be unwittingly making your project cost more than necessary.
1. Excess Inventory
Inventory is the equipment or stock that you use on your project. If you are building a hotel, your inventory will include bathroom tiles, carpets, bricks, pipes and so on. Having too much capital tied up in stock is a problem for any business, and can give you a problem on your project with cash flow.
Equally, you have to have somewhere to put it all, and you don’t want to be paying for warehouse space unless you really need it.
Here’s a bonus tip on this point: Holding too little stock is also a problem because you’ll have to buy at short notice if ever you need some extra. Buying at short notice is generally more expensive, because you’ll have to add priority shipping or expedited processing. It’s better to give yourself some time to plan your purchases so that you can avoid those costs.
2. Wasting Resources
This is similar, but wasting resources is more about using equipment that isn’t the right size for your business. Think: buying a server that’s too big for your business needs, or scaling up to the super-advanced mobile phone options for all staff when really the basic model would do.
All that does is add extra cost and you won’t get the benefit. It’s different if you think you will use all that extra capacity or those extra features in the next few months, but make sure you are confident in your timings or you’ve built something that you won’t be benefiting from.
3. Excess Process
Too much admin! This costs money in terms of time, and human resource effort to process it (that you pay for in salaries for your project team). Plus there’s the cost of maintaining admin processes, printing pages for sign off or whatever your process is (you don’t still print paper copies for sign off, do you?).
You might not have any specific project-related processes that you can trim, but you can certainly talk to your Project Management Office team and make sure that they are aware of your frustrations with any processes that are a little bit too unwieldly for their own good.
4. Cost of Waiting
I hate waiting.
If you schedule a task to finish and then the deliverable isn’t ready, the person next in the queue to do their work has nothing to work on.
OK, in reality they aren’t going to be sitting around and doing nothing, but they won’t be working on your tasks as scheduled because your project isn’t ready.
So you’ve wasted a resource day – maybe even one that you had to pay for in advance if they are a contractor or other third party.
Try to plan handoffs carefully so you don’t end up with problems like this.
5. Staff Turnover
Onboarding staff is something I have talked about before on this blog. It costs money to bring people on tot the project – hiring costs, admin costs, upskilling and then the cost in lack of productivity as they work out how to get on in the team and find their feet with their new role.
You might not be able to do much to influence the choice of someone who has been headhunted to a much more lucrative job elsewhere, but you can do your best to lead authentically and make the workplace as fun as it can be so that you don’t encourage your project team to go looking for other work.
Do you routinely look for these 5 ways that you might be adding cost to your project? I don’t think most people do, and it might be outside your responsibility to truly control these costs, but being aware of them is the first step to thinking like a business owner and showing your management team that you understand the business context enough to be asking the right questions.
If you prefer videos to reading lists like this, pop over to here to watch a video about this topic. https://www.projectmanagement.com/blog-post/24616/5-Costs-That-Could-Cost-Your-Project--Video-
How do you track the KPIs for your project? If it’s a short project with only a handful of metrics, maybe you don’t.
But for larger projects, or those with many moving parts, it’s handy to be able to monitor progress against a selection of measures that you have agreed with your sponsor or PMO.
While many project management tools offer dashboards built in, these can only track the measures that are included in the system. So if you want your project scorecard to be part of your wider project dashboard, then you’ll need to find a way to get that data in somehow.
Bear that in mind as you work out what to include in your scorecard.
Here’s how to get a project scorecard set up for your project.
Step 1: Define what to track
A scorecard should include a number of metrics for your project, but only those that are going to be relevant for the whole project lifecycle. Otherwise for large chunks of your project you’ll be reporting 0%.
Equally, make sure you can get the data. If you can’t actually access end user customer satisfaction scores month on month, then there’s no point including it as a measure. If it’s genuinely important, you’ll have to find a way to get access to the data – your sponsor is the person to tap for information here.
So what can you use? Here are some generic scorecard metrics which will work for most projects:
You can probably see how these could fit into nice groups: quality, project team, project costs/benefits, project delivery. It helps to group your measures because then you can compare progress in rolled up categories month on month.
Whatever you choose, remember that your project stakeholders will probably ask for 25% more information to be added at some point and that you have to keep this up to date. Automate as much as possible!
Step 2: Set targets
It’s fine to have your measures defined, but what does good look like? A quality result of 80% might be good or bad, depending on whether you’re building an aeroplane or something that’s going to be thrown away in a few months and is a quick and dirty solution to a small problem.
Work with your sponsor and team to work out what acceptable targets are for each of the measures and then establish how these are going to be incorporated into your scorecard.
For an online project dashboard, you might have this set up already. If you are using a spreadsheet, Red, Amber/Yellow, Green makes a handy and commonly-used (so easy to understand) distinction between what’s on target and what’s not.
Make a note somewhere of how you are calculating the metric. This has caught me out before. Last month’s score was 35% but I had no idea what went in to make up that number so I couldn’t easily replicate it. It took a little while of fiddling with last month’s figures to work out how I had arrived at 35%!
Save yourself some time and write it down.
Step 3: Populate the measures
Yep, now it’s time to do the work.
Run the formulae, pull the data, populate the tables. Get your information into the scorecard.
Now sense-check it to ensure it’s not wildly off before anyone else sees it.
Step 4: Communicate the results
You’ve got something to share, so it’s time to share it.
Be prepared for your sponsor to want to tweak how things appear, maybe changing the targets or how they are reported. This is normal… and will probably happen a lot!
Work with your senior team and executives until you have a version that works for you all.
Step 5: Watch for trends
Build in a way to archive old results or present a ‘last month/this month’ view so that you can track trends. That’s the disadvantage of ‘real-time’ project dashboards in project management tools: you often don’t get the ability to capture what the report looked like last month to give you that comparison, which is so important with KPIs. Ideally, everything should be tracking upwards.
Finally, remember that the data is there to inform what you do in your job and the decisions you make. It’s interesting, but really it’s most helpful to prompt action. So your quality scores are low? What are you going to do about it? Plan some time each month to dig into your data and plan out how best to respond as a team.