Mitigating Vendor Risk
When working with vendors there’s always the risk they will jeopardize the outcome of a project, hurt your relationship with the client and cost you a lot of money. It’s best to try to minimize this risk and the best way is with a service level agreement. This contract should require a signature, be a binding, legal document and contain clauses that specifically address potential problems.
Some general recommendations:
- Clearly state your expectations on quality.
- Establish the fact you are their client and they work for you, not your client.
- Define communication channels and the proper protocol. This is essential in maintaining control.
If possible, keep ownership of all deliverables.
- Outline responsibilities for all phases of the project.
- Require they follow best practices and deliver good work. Have a clause that states you can audit their work at defined intervals, or when the project is suspected to be affected.
- State any loss due to missed deadlines or unacceptable deliverables is their liability.
- Require detailed plans and necessary documentation demonstrating they know what they are doing.
- Determine lead and tag times, turn around times and expected response times.
- Have a change control process that details how changes are approved and incorporated into the project’s scope.
- List the consequences for failure to meet requirements and the escalation/arbitration process.
These are just some basics requirements any good service level agreement should have. Remember this is an agreement so it is important to review this with your vendor, discuss each requirement and customize it so both parties can really agree to follow it. Project Management
James Bielefeldt | 7/18/2006 3:30:00 PM (Central Daylight Time, UTC-05:00)
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