Imran ManirSenior Project ManagerBurton On Trent, United Kingdom
Working with 3rd party suppliers often represents it's own challenges in your ability to manage these relationships and how they contribute to the project context. What are some of the key challenges you have faced and how did you overcome or handle these? Saving Changes...
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Elizabeth HarrinDirector| RebelsGuideToPM.comLondon, England, United Kingdom
One of the key challenges I see is on fixed price contracts where the client (us) changes the spec, slips the end date, increases the amount of training expected etc etc from the vendor. That's a difficult situation to manage as there are justifiable business reasons to change the requirements but it is often expected that this will be absorbed into the fixed price proposal. Overcoming it is generally a case of an open discussion about resource requirements and costs to both sides, then negotiating a change control which satisfies everyone. Saving Changes...
Wai Mun KooPMO Director| Intergraph PP&MSingapore, Singapore
Very often it comes to two key elements - leverage and incentive. What can you hold on to the vendor if they fail to deliver? How can you safeguard your company and the project if the vendor cannot meet the expectation? On the other hand, what are the incentives you have in hands that will motivate the vendor to do their best? All these are kind of tricky to handle. Losing either leverage and incentive means that you are putting the entire relationship in risk. Of course there is a third element - trust, but this does not come into play for new vendor-customer relationship as it will need a longer time to establish trust through numerous works and engagements. It is just naive to base everything on trust with a new vendor you engage, just too risky. Saving Changes...
Imran ManirSenior Project ManagerBurton On Trent, United Kingdom
Thanks guys,
Elizabeth, the lesson I can learn from your experiences is to ensure that an agreed change control framework is in place between ourselves, the client and our vendors, regardless of whether the contract is fixed price or T&M. We may end up paying more, but then again we are asking for more, although I would expect some "goodwill" on part of the vendor :0)
Wai - some good advice there, thanks. Are there any specific incidents related to a particuler supplier/s that have been challenging for Tyco? What happended and how did you overcome this? Saving Changes...
Russell GeakeProject Management Consultant| Deciduous Partners LtdLostwithiel, Cornwall, United Kingdom
Warning Contrarian Content - everyone expects good will on the part of the vendor... how about some good will from the customer?
Yes, we all negotiate hard on whatever we are purchasing, often to the point where (and I have seen this) suppliers begin to regret taking on the work at hand and resent being asked for more. A particular supplier is chosen because they met the initial brief and were able to compromise on cost/output in order to "beat" their competitors offering. They wanted and won your business, you wanted and chose their service.
Perhaps the balance needs to be redressed occassionally, consider the value we place on the provider and how we hope to work with them in the future. By VALUE I mean you have selected their product or service because you like it, your money is the same money wherever it is spent, but their talent and innovation is different and potentially of greater value to you than the money you are spending.
Perhaps the idea of a fixed price contract is incorrect in this example, and a seperate price for the new work should be sought - albeit from the same supplier as a supplementary contract. Saving Changes...
