How do you deal with vendor disputes that affect your project timeline or budget?

An environment for open communication helps in the early detection of any conflict. Some of the steps to identify the root cause can be : 1. First, define the problem. 2. Gather information and facts from all parties. Look at emails, contract copies, and conduct 1X1 as required. 3. Analyze the information and create a pattern. 4. Finally create corrective action. It is always not as easy but by following these steps, you can be on the right path to identify the root cause of vendor disputes and take corrective actions to address the issue and prevent it from recurring.

Communication is critical. The moment I find out about an issue that could potentially derail my project milestone dates and budget, I am scheduling a call immediately. I want to know: 1) What happened? 2)How/Why happens? The critical question 3) Can the obstacle/issue be resolved? Then 4) How long will it take to be resolved? 5) What is the new estimated cost? Things happen. No project is perfect. You have to anticipate some problems, the potential for change orders, and delays. Stay calm. Be patient. Sometimes the cause is not always the vendor's fault.

When encountered with such issues, following steps can be take to arrive at an immediate resolution - - Understand the deviation - (quality/timelines) - Refer to the original scope document & establish whether its beyond the agreed scope of work - Establish the root cause - was the deviation as a result of ignorance or poor quality. Whether it was client initiated - Perform settlement with the agency - initiate change management process and seek necessary approvals. Intimate management of the impact on timelines/cost/project deliveries.

Communication is the key piece. Communicating "clearly" and "respectfully" during vendor disputes is crucial to maintaining a positive relationship with the vendor and resolving the issue effectively. Some key things to keep in mind: 1. Use clear and concise language: 2. Stick to the facts. 3. Listen and then speak by using active listening skills. 4. Stay calm, respectful, and courteous 5. Seek avenues for collaboration: Offer help to collaborate for a potential solution. Finally, do not forget to Follow up with the vendor in writing, summarizing the conversation and any agreements that were made. This can help to ensure that both parties have a clear understanding of what was discussed and agreed upon.

While keeping track of projects, we ensure a robust escalation matrix is in place with periodic steering committee meetings. Steering committees comprise of senior level individuals from either sides who meet together to discuss the project progress, its direction and resolve issues at their disposal.

With the presence of an escalation matrix, we can refine & filter out even the slightest of deviation, be it in project delivery, scope understanding, quality deviations, cost deviations, etc. In large capital intensive construction projects, it is highly demanding to keep all expectations from either parties clear. Checklists such as scope matrix, identifying all activities and marking responsibilities can help clear the scope and minimize deviations.

A major international bank experienced a vendor dispute with a provider of critical software solutions for the bank's retail banking operations. This resulted in lost revenue and dissatisfied customers. The bank's IT team felt the progress was slow and escalations continued resulting in conflicts. Finally, both parties used active listening skills to understand perspectives. Bank's mgmt was able to articulate challenges and vendor mgmt understood the business obligations of their client. The dispute was resolved and they maintained a positive working relationship. Does the story sound familiar? It is the same set of principles with a strong focus on Communication, collaboration, and respect that resolves most vendor conflicts.