You're focused on cost, but quality is key. How do you make vendors prioritize it?

Irrespective of how focused you are on cost, we all know it is never at the expense of quality. It also doesn't matter how carefully you have legally covered yourself; you will still come across deliveries where the quality is not up to the mark. These are the occasions where your relationship with the vendor counts. Having an open, frank, honest and fair discussion would ensure that the vendor understands your disappointment. As soon as they realise it could even mean losing business for them, things will improve quickly. And if they don't, you know what to do. A good vendor is not just a supplier; they are a part of your team. Make sure you understand and appreciate their problems and limitations, too. It is always a two-way street.

I clearly communicate to vendors that our long-term collaboration hinges on the consistent quality of their work. By offering extra business for maintaining high standards and setting clear benchmarks for quality, I encourage them to prioritize excellence while staying within budget constraints.

Working closely with the vendor throughout your project is critical to the success. This means regular stand-ups, weekly check-ins, and hopefully agile-based development demos. When your team can routinely review what the vendor is working on and contribute feedback, the more likely you are to come out at the end with the result you want. I would not recommend a situation where the vendor delivers the final project with no milestones or thresholds for review. Especially since the goal is quality work, keeping close watch and contributing feedback early is the best approach.

Repeat business is important for all. While you are focused on cost, if you are scaling growth, it means additional revenue for the vendor - if they understand that their delivered quality will accelerate your growth and correspondingly theirs. For this purpose structure incentivising vendors delivering quality with additional business, support in scaling their own business verticals that align with your requirements and insights in the ecosystem you operate in as a consuming organisation. Vendors value business partnership that helps them scale and venture into new areas more than one time bonuses.

Ensure that the KPIs are specific, measurable, and directly tied to the vendor’s deliverables. Regularly review these KPIs with your vendors in scheduled performance meetings, where both parties can discuss progress, address any issues, and refine targets as necessary. Utilize data-driven tools and dashboards for real-time tracking, providing transparency and allowing for quick interventions if standards begin to slip. Additionally, establish a process for recognizing and rewarding vendors who consistently meet or exceed expectations, reinforcing positive performance.

By articulating the value of quality, you align their efforts with your expectations, ensuring that cost and quality are balanced effectively. In my experience, clearly communicating how high-quality deliverables impact the overall success of the project and long-term business relationships helps shift their focus. Discuss the potential costs of poor quality, such as rework, customer dissatisfaction, or lost business, to highlight the importance of maintaining standards. A common mistake is assuming vendors understand your priorities without explicit communication.