CHALLENGES OF MULTI-VENDOR ENGAGEMENT

Many times you need to manage a customer engagement (program / project) which involves multiple vendors who work with the customer. Some of the vendors might be your direct competitors or provide supplementary services/products/skills. There are various challenges that come up in such scenario. This article talks about some of the challenges and possible solutions

Direct competition

Sometimes organizations engage multiple vendors for same service to increase competition and better negotiations. Though it creates a competitive environment, each vendor tries their best to get bigger pie. This can lead to vendors getting into fault finding mission of competitors. It helps to have good working relationship with customer as well as all other vendors that you work with. As long as there is healthy competition, it would be beneficial to everyone’s progress.

Working cultures

Each organization has its own style and working culture. Sometimes the working cultures of the customer and/or other vendors does not match with the working culture of your organization. Instead of getting into cultural conflicts, it is beneficial to have common acceptable norms for all parties involved. E.g. working times, written/verbal communication, off working hrs support.

Unsynchronized Priorities and Dependency risks

There are situations when each vendor is working on different tasks and the priorities are in conflict with each other. E.g. vendor A is working on a component which requires another component to be made by Vendor B. However this component is at very low priority for Vendor B. If vendors are working in isolation, this will lead to delays or integration issues. So, as soon as you realize the dependency you need to get the other vendor’s commitment on deliverables. Any misalignment on timeline needs to be resolved upfront.

Managing other vendor

Many times customers engage vendors as extended organization. This sometimes leads to vendors managing teams/individuals from other vendors. The situation becomes more complex and challenging, if the vendors are in direct competition with each other. Whatever the situation, it always helps to have good working relation with other vendors along with customer. If there are any conflicts you need to involve the customer to resolve it. Always ensure there is a direct line of communication and reporting with the customer for your organization.

Communication overheads

As you can see from the above mentioned points, whenever there are multiple vendors involved, there would be high communication overheads. It is prudent to maintain minutes of all meetings held and circulated to all participants including customer. This helps for any later reference in case of conflict or misunderstanding.

Overall the communication overheads in such projects would be much higher. This needs to be budgeted for in your estimates.

In summary, projects involving multiple vendors can throw up many challenges. Understanding of customer’s strategy and proper planning can help to overcome such challenges.