These 7 vendor management best practices must be part of any vendor management process if you want vendors to consistently deliver value to a growing company.


7 Steps to a More Effective Vendor Management Process:
1. Set frequent check-ins
2. Pay attention to vendor contracts
3. Facilitate team integration
4. Banish vendor scope creep
5. Talk to the top dogs
6. Look for mutual wins
7. Conduct post mortems


As a technology leader at multiple growth companies and today CIO at Agility Recovery, I’ve worked with vendors for two decades, and some of those relationships have lasted nearly that long. These vendors may not have worked with me continuously, but having a reliable source of expertise that I know, trust and can return to as needed has played a big role in my ability to add value to every organization I’ve worked with.

Maintaining vendor relationships takes effort, but it’s worth it. My vendors help me add core competencies to my team that are lacking in house, flexibly scale up and down as needed and avoid the lag time involved in hiring and training full-time staff. That means I can directly contribute to the company’s resilience and deliver a significant competitive advantage, especially during times of rapid growth.

Over the years, I’ve identified these seven best practices that need to be part of any vendor management process if you’re going to establish and maintain relationships that consistently deliver value to a growing company.


Set frequent check-ins

In my experience, the number one reason a vendor relationship goes south is that there weren’t enough check-ins throughout a project. Milestone meetings are important, but so are the meetings that take place on a regular cadence, and that can be biweekly, weekly or even daily depending on the duration, velocity or complexity of the project.

Without regular check-ins, you’re going to get an unexpected end result. Remember that it’s your project, not the vendor’s project. While you may rely on their expertise, you can’t rely on them to gauge progress and correct course on their own.

Pay attention to vendor contracts

While check-ins are essential, they’re not a silver bullet. Things can still go downhill, and that’s when you need a clear and detailed vendor contract to back yourself up. Contracts give you the power to push back and get things on track without having to add to the budget.

The contract needs to cover communication frequency, turnaround times and deliverables, and it also should address contingencies and remedies. Ultimately, what level of service does your organization require, what end result do you expect, and what happens when either of those elements doesn’t meet the standards that you set at the beginning of the engagement? Make answering these questions in the contract part of your vendor management process.

Facilitate team integration

Bringing new people into the team is always an adjustment, and bringing vendors on board can be especially challenging. The situation can trigger resentment among your own employees, who are wondering why the company needed to look outside the organization for talent.

The solution is to give them an opportunity to work closely with the selected vendors on the same project team. This is a win-win approach, giving employees a chance to learn valuable new skills and vendors a better understanding of the organization, its culture and its expectations.

Banish vendor scope creep

Vendors are always going to be ambitious, looking for additional ways to add value, build the relationship and secure more work. And they’ll have some great ideas that you’ll be tempted to include in the scope of work.

But managing scope creep is probably the single most valuable thing you can do to ensure the success of your project. That means holding vendors to task and being disciplined about letting those great ideas go. When the budget, timelines and objectives have been set, it’s time to focus on the project at hand and stick to the plan ruthlessly. Park those new ideas and revisit them when the current project completes—they’ll still be there.

As part of your vendor management process, keeping focused benefits both parties: when people aren’t pulled in multiple directions, they are more effective. That means your vendors are more likely to deliver successfully on the project, which opens the door for additional work in the future.

Managing scope creep is probably the single most valuable thing you can do to ensure the success of your project.

Talk to the top dogs

I may not connect with the head of the vendor organization during a short-term project, but if it’s a long-term engagement, I’ll touch base with the CEO or president once a quarter or every six months to discuss things at a high level, communicate my experience on the project, and hear what they have to say about it.

While it’s easy to become consumed by daily activities and focus on direct project participants, setting aside time to talk to the people at the top helps to strengthen and improve the relationship. Vendors want to know, at a strategic level, where you’re going as an organization so that they can find ways to help you get there. And they want to know how they’re doing and how they can improve.

Look for mutual wins

While managing scope creep is the best thing you can do to ensure the success of the project, looking for ways to support your vendors is the best thing you can do to ensure successful, long-term vendor relationships.

While taking a hard line on vendor pricing offers short-term gains, it’s better in the long run to pay fairly and focus on the value received rather than the cost expended. Similarly, poaching consultants from a vendor may bring valuable talent into your organization, but it will significantly limit the quality vendors who will work with you.

Conduct post mortems

Project reviews, debriefs, post mortems—whatever you call them, they’re integral to the vendor management process. Take the time to go back and reflect on the project: the original expectation, the ultimate outcome and the overall project experience. Discuss it internally and with the vendor. What went well? What went sideways? Celebrate the wins, learn from the defeats and use the information to guide and improve your next vendor experience.


Here’s the bottom line.

Knowing how to attract the best vendors and manage the relationships successfully is an incredibly valuable skill. When you find a trusted vendor and you know how to nurture and protect the relationship, the benefit accrues for years or even decades, giving you ready access the talent and resources to grow whenever you need it.