Vendor changes are inevitable in any project that involves external suppliers, contractors, or consultants. Whether it's a change in scope, budget, timeline, quality, or personnel, you need to manage these changes effectively to avoid risks, delays, and conflicts. In this article, you'll learn how to apply some vendor management best practices to handle vendor changes in your projects.
Before working with a vendor, it's essential to establish a clear and mutually agreed change management process that outlines how changes will be requested, approved, communicated, implemented, and tracked. This process should be documented in the contract or statement of work (SOW), detailing the roles and responsibilities of both parties in initiating and approving changes, the criteria and methods for evaluating the impact of changes on scope, budget, timeline, and quality, the format and frequency of change requests and change orders, the escalation and resolution procedures for disputes or disagreements, as well as the reporting and monitoring mechanisms for tracking changes and their outcomes. Having a clear change management process will help to avoid misunderstandings, confusion, and frustration when changes occur. It will also ensure that both parties are aligned on expectations and deliverables.
In my experience, making the transition as seamless as possible is key for the project to keep moving forward. We had a change in vendors during a fairly large project and they key was to keep both vendors engaged for a smooth transition. The points above in change management are well noted too.
Communication is essential for managing vendor changes in your projects. You should notify any changes that affect your vendor immediately, and vice versa. Utilize the right channels and tools such as email, phone, video conference, or project management software to communicate changes. To ensure effective communication, be clear and concise about the nature, reason, and impact of the change. Additionally, provide supporting documentation or evidence for the change like a change request form, a revised SOW, or a revised project plan. Ask for feedback and confirmation from your vendor on the change. Address any questions or concerns they may have. Monitor the progress of the change implementation and update them on any issues or risks that may arise. Make sure to document and archive all communication related to changes for future reference and audit purposes. Prompt and effective communication will help you and your vendor maintain trust, transparency, and collaboration throughout the project lifecycle.
Absolutely agree! Communication is the one thread that keeps it all together so maintaining transparency and collaboration is critical!
Sometimes, vendor changes may require negotiation between you and your vendor, especially if they involve significant changes in scope, budget, timeline, or quality. Negotiation is a skill that requires tact, diplomacy, and mutual respect. You should strive for a win-win outcome that satisfies both parties' interests and goals, while maintaining a positive and professional relationship. To ensure successful negotiation, it is best to prepare and research before the negotiation, such as the rationale, impact, and alternatives for the change. Listening and empathizing with your vendor's point of view is also important. Focus on the interests and benefits of both parties rather than their positions or demands. Utilize objective criteria and data to support your arguments and proposals; such as industry standards, benchmarks, or best practices. Additionally, explore options and trade-offs that can create value for both parties. Finally, seek agreement and commitment on the final terms and conditions of the change; document them in a change order or revised contract or SOW. Negotiating changes fairly and respectfully will help you and your vendor build trust, rapport, and loyalty; fostering a long-term strategic partnership.
Keeping interests of both sides in mind will help get us there. While they are vendors, I like to consider them as partners - there is mutual benefit with success and also the reverse with failure. We have to work in unison. Relationship management is key to a successful relationship and projects.
Managing vendor changes well mid-flight is a lot like changing the tires on a moving car. It's possible, but not a lot of teams can do it well. How can your teams get this right? 1. Effectively articulate the need for this change to the appropriate audiences, including the vendor you are replacing. 2. Clearly communicate the impacts this vendor change will have: * An extended project timeline *The need to support a new vendor ramp-up *An additional funding request to support a new team 3. Align on the established vision and ensure everyone remains committed. 4. Empathize with your affected team members and support them, especially if the burden falls to them in time & work balance. The list could go on, but this is a good start.
Managing vendor changes in your projects is an ongoing process that requires proactive and adaptive management. Establish and use KPIs and metrics to measure the results, conduct regular reviews with your vendor, implement corrective or preventive actions to address any deviations, celebrate successes, and learn and improve from experiences. All of these efforts will help you and your vendor deliver the project successfully and efficiently, while also enhancing your vendor management skills and competencies. Monitoring and controlling the performance and outcomes of the changes, as well as adjusting plans and actions accordingly, are essential for proactive and adaptive management.
Periodic reviews are critical of all KPI’s and targets. In order for no one to be blind sided - a regular cadence of read outs at various levels is a must have.
There shall be more info about milestones. In case if milestone achieved, then supplier get a reward if not supplier shall be changed. The other supplier also shall be prepared for seamless change