AVO Chief

There was a time when the majority of IT tasks were kept in house but today even network security tasks can be handled by outside vendors. So obviously the potential of losing control of a project handled by an outside vendor is a very real possibility. These problems can be especially frustrating to the project’s leadership. This doesn’t have to be with a little bit of planning and follow-through. For example, attention to creating and executing a well thought out contract can make all the difference in asserting the control needed to be successful.

Here are some key areas to keep in mind:

• Whenever possible, include terms and conditions in the contract the delineate how the vendor can be rewarded if it completes the contract early, but penalized if it completes late.
• Whenever possible, include terms and conditions in the contract that delineate how the vendor can be rewarded if it delivers a higher quality product and, but penalized if it delivers an inferior quality product.
• Have a project plan prepared by the project manager (preferably yours) and have the vendor provide progress reports against that plan each week.

Things to watch out for:

• Key skills that might disappear when from the project and follow-on projects when the vendor contract completes.  Make sure your company brings on skilled workers to work alongside the vendor at the appropriate times so that there is a valuable transfer of knowledge
• Vendor employees that do not perform as expected. Make sure that this is addressed in the contract.
• Key vendor employees may be switched to other vendor projects midway through yours thus putting your project at risk. Make sure that the contract requires certain vendor employees to participate full time on the project.  And if possible, the contract should forbid the vendor from changing assigned employees without your company’s consent after the  contract’s been signed.
• Being left with absolutely no vendors resources after the contract is complete.  Make sure you negotiate the possibility of a retainer fee with the vendor.

Written by AVO Chief

Efren Duarte is Director of Products & Services and AVO Chief (Strategist/Evangelist) at Avocera Products & Services Consulting and principal of the AVMI Group, a market research based venture management firm. The AVO Chief provides 2-Week Money Back Guarantee Product Marketing/Management Services Trial for qualified Startups and SMBs with growth potential. Inquire at avochief@ymail.com for more details.

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