Karen McIsaac, President of Project Managers, Inc.,

Keep Poor Vendor Management from Impacting the Bottom Line

In today’s world, when something goes wrong everyone likes to put the blame on someone or something. I believe that the root cause of most problems is poor execution of program/project management.

When an initiative is large in terms of overall investment and business impact, it may not always make sense to turn the organization’s success over to a vendor with conflicting priorities. The vendor’s involvement ends when the engagement does, but the organization must live with the results. This has led me to believe that organizations should consider the use of an external project management professional (PMP) to oversee the process and ensure success. PMPs are qualified to assess the risks involved in a project, as well as how to assess, mitigate, and plan for them.

There are many risks associated with major initiatives that involve an outside vendor. Every time you hand off a responsibility, you incur risk. This holds true for all instances, even when you ask for support from your own team members. Execution risk increases significantly when large dollar investments, software integration, major business process changes and associated employee and/or customer behaviors are involved.

Sometimes operational managers with other responsibilities are brought on to oversee a large dollar and business transformation initiative. Our profession terms this the “accidental” project manager. The accidental project manager is generally someone that does not possess the skills or experience to drive a large project. Managers who come out of the “business-as-usual” environments and have been successful in transitioning to a new role can attest to the differences in required skills.

So, what is the true value of bringing in a seasoned, certified project manager to oversee a major initiative that involves an outside vendor?

My experience in the industry has left me with invaluable insights as to what clients have gained from having an external, certified PMP onboard. One of the benefits is the creation of tangible documentation that not only ensures that the project is completed on time and within budget, but can also be leveraged in the event that legal issues surface. Project sponsors and stakeholders do not want surprises where vendors’ responsibilities are concerned.

According to past clients, the value of an external PMP is also demonstrated in that person’s ability to ensure that the client’s infrastructure is in place to support the program/project governance, sponsorship/ownership and that the client methodologies are integrated with the vendor’s processes. Clients also say that the external project manager can place equal focus on the business transformation and technology integration.

External project managers use structured methodologies and have the ability to support the training of client resources in order to mold them into effective program/project participants. They can also provide appropriate vendor oversight and direction for a knowledge transfer from vendor to client resources at the conclusion of the project. This will ensure that when the vendor completes the work, the new “business as usual” can be supported by client resources.

Executing an initiative that involves an outside vendor does impact your organization’s bottom line. Allowing the vendor to oversee the project or designating an accidental project manager can have serious consequences to your organization. You should be aware of your options, consider your risks and identify insurance for success for you and your organization. Consider the value of an independent, experienced PMP to oversee your next initiative that involves significant business and technology impacts and support from one or more vendors.