How can you measure the effectiveness of vendor escalation and resolution?

Benchmarking: Compare your vendor escalation and resolution metrics with industry benchmarks or best practices to assess your performance relative to peers.

Cross-Functional Collaboration: Ensure collaboration between different departments involved in vendor management to address issues comprehensively and share insights for improvement. Communication: Communicate the outcomes of the vendor escalation and resolution process to relevant stakeholders, fostering transparency and accountability.

Scalability: Assess the scalability of your process to accommodate changes in the volume of vendor relationships and the complexity of issues. Documentation: Maintain comprehensive documentation of the vendor escalation and resolution process, including changes made, lessons learned, and best practices.

First and foremost is getting to the 'why' part before the 'what' and 'how' parts in a vendor engagement scenario. Is it the cost arbitrage? Is it the skill or product? Is it the time to market? Is it the quality? Once we outline the main reason(s), it becomes the guiding principle for engaging the potential vendors. Then the vendor(s) need to be clearly briefed on the objectives and expectations. It is essential to build the KPIs in conjunction with them as they need to subscribe to delivering them. An ideal engagement will have built-in incentives and also thresholds for acceptable deviations at the outset. A governance and review mechanism should also be set up with both internal and vendor stakeholders signing off at the inception.

A good vendor management strategy will have measurement categories, KPIs, measurement intervals, review/sign-off authority and roles, finance tracking and communication plan. Typical KPIs should include quality, cost, time, schedule, reusable assets created, velocity, scope creep, etc. A common tool for recording and tracking these KPIs is recommended. It should also record the priorities and escalation process. I have seen few badly implemented vendor management process resulting in contract terminations but it can be avoided by fostering an open and transparent environment regarding expectations, issues and support needed. These inputs should feed into the overall business plan as it may need some amends based on the vendor performance.

Tracking issues and getting it resolved within turn around time is the prime objective and to ensure that proper cross team communication and apt follow up play key role. Understanding the organisational hierarchy and understanding the basic objectives of every hierarchy can be helpful to some extent which will further help you to build proper peer across different teams as well as it will help one to decide whom to reach at when can bring speed to overall process.

Evaluating performance is an essential part of measuring the success of vendor and the value that the organisation is expected to receive. By regularly assessing and reporting vendor performance against prior agreed measurement criteria, the project's progress, areas of improvement, outstanding issues, rectification plan, potential risks, help needed, etc. can be understood. This data will help in making informed decisions regarding contract continuation, renegotiation or potential termination with the vendor. Many a time, vendors face problems with internal bureaucracy, politics or misalignment with key stakeholders. Senior leaders should diligently seek such vendor feedback to identify and address such problems as and when they arise.

Evaluating the results may not always look like checking off a box and moving forward to the next step. An often-overlooked part involves assessing if interests are still aligned. Have there been meetings where the stakeholder is quiet and still agrees to move forward? There could be hesitation or questions from the stakeholder they are not raising in meetings. Seek out clarification and ensure both parties interests are aligned on all objectives and KPIs.

When reported KPIs deviate from the expected criteria, it calls for an improvement plan. Understanding the real problems, identifying the root cause(s) and assigning the accountable stakeholders, calibrating the impacts to scope, cost & schedule and agreeing on a timeframe for implementation should be the essential components of such a plan. All this information should be seamlessly communicated both internally and with the vendor and necessary signed off documentation needs to be put in place. Building mutual trust and confidence is essential to overcome such issues and challenges thus paving way for realising better outcomes.

I always insist on designing a governance model, escalation path, communications plan and reporting system at the start of a vendor relationship. Such a framework would essentially avoid misplaced expectations, unclear roles & responsibilities and an agreed path to get things right first time. An experienced senior manager will look for signs much ahead and then diligently monitor before those signs turn into impediments. Again, open vendor communication is key in terms of perceived risks or challenges. Equally, the vendor should outline the support and resources needed for a successful collaboration. They should outline the best practices gathered from other similar experiences and actively champion for those to realise a win-win scenario.

Before you sign the contract with your vendor, walk through a number of "What if" scenarios to learn about your vendor's escalation process and procedures and how they match your own. You might even want to document those and include them in an attachment to the agreement.

In my experience, any process can be improved by 1. Proper communication 2. Seeking feedback, both upward and downward 3. Open to any suggestions as well as flexibility at implementing the feasible ones.