Episode 75
# Episode 75
Welcome to episode 75 of the Nerd Journey Podcast [ @NerdJourney]! We’re John White ( @vJourneyman) and Nick Korte ( @NetworkNerd_), two Pre-Sales Technical Engineers who are hoping to bring you the IT career advice that we wish we’d been given earlier in our careers. In today’s episode we discuss vendor management as relatable expertise for people management.
Original Recording Date: 04-16-2020
Topics – Vendor Management as Relatable Experience for People Management
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# 0:58 - Reasons for the Episode
- This episode was born from something Brad Tompkins mentioned in Episode 71. He was responsible for hiring and firing vendors but not employees in his role as Director of Telecom but moved to manage people as Director of Technology Services. Episode 71
# 1:37 - Types of Vendors to Manage
Real estate
Utilities
Food and beverage service
Cleaning service
Lawn service
General supplier of goods
Logistics
Services - legal, HR, payroll, consulting
Technology vendors
Special note to the listener - we are considering the scenario in which the person / teams managing and working with vendors would be considered customers. The reseller case is excluded here.
# 3:05 - What Managing Vendors Involves
Interviewing
Sourcing vendors is like sourcing candidates for a job opening.
Vendors can be sourced through referrals, recommendation in an online community / business review site, or perhaps brokers who will find the best vendor for the job.
The relatable experience here is maintaining the network of people you trust to source the vendors and interviewing the vendor to see if they are right for the job.
Communicating Need
What problem are we trying to solve, and what could the vendor offer to help solve this?
Hiring managers often look for specific skills (requirements) needed to do the job or qualities they want in a person who will file the role.
Is the need something essential to the company doing business, or is this just something that is nice to have?
John mentions looking to a vendor for expertise that the company will not keep in house (i.e. it may not make sense to have an electrician on staff but rather to only call them in when needed).
Getting Pricing / Quotes
At some point, the vendor will deliver a quote for services / goods rendered. Negotiation skills are needed here.
Is the price fair? Are all things in the quote needed? Does this meet the budget?
In a similar way, hiring for a specific role needs to fit within a budget.
This goes back to defining needs. Think of services rendered in tiers (i.e. gold, silver, bronze). Listen to John’s example.
What are the differentiators of each vendor? Take that into consideration when looking at pricing.
Making a Selection Based on Agreement Term
There is usually a length of term (one time thing, month-to-month, 1 year, multiple years).
Think of this similar to contract work (short term) compared to full time employment (longer term length).
Evaluating Performance
What are the metrics that will determine if the vendor is doing a good job, and how often will you revisit these?
Is there a company directive to shop around every year, couple of years, etc. to get a better deal?
Pricing changes
Sometimes vendors need to increase the pricing due to increased overhead. Maybe it’s through delivering more value, which is the equivalent of justifying an employee’s raise.
John makes the point that metrics for success (i.e. what good looks like) should be communicated from the beginning of the relationship and reviewed periodically just like a manager would with an employee.
Similar to this, think about developing an individual development plan with a vendor just like you would with an employee.
Increasing a vendor’s scope of services / goods may be warranted based on good performance in one / a few areas.
An employee may desire to take on an additional skill / duty (even if they have not done if previously), and continued success through increased responsibilities is another justification for a raise.
Nick throws out the idea of an ooch (see Chapter 7 from that summary article) and heard about this after reading Decisive by Chip and Dan Heath. Decisive Chip and Dan Heath
Termination
Sometimes we need to end an agreement with a vendor for poor performance (even if the length of term is not finished).
Consider the cost of this termination (there definitely is one). When an employee is fired, there is a turnover cost to the company.
The decision is on the person / people managing the relationship of the vendor.
If an employee cannot react positively to critique and feedback, termination is a possible option.
Responsibility for Vendor Management
Who will manage relationships with the vendor? Likely there is someone / a greater team involved in every step of the vendor lifecycle.
Dedicated resource in the company for management of all vendors
Procurement - maybe they do only negotiations but someone else manages the relationship
John has some great feedback on how a procurement team is part of the vendor lifecycle.
Department who uses the vendor for their needs (i.e. technology team manages technology vendors)
John has seen a vendor management team as helpful in getting access to company personnel needed for critical meetings.
This group could be part of the selection arm or could be part of the entire process.
There are many different models for vendor management. If people management cannot be part of your career path within an organization, consider vendor management as an option.
Company size (i.e. a global company vs. a smaller company) as well as the impact radius of the vendor (only to be used for some offices in different cities vs. global vendor onboarding) may dictate the number of people involved in the vendor management process as well.
# 24:40 - Ideas for the Resume
Put vendor management on the resume in a way that draws the parallels to people management.
Emphasize the process of sourcing (network building), complexity / scope of problems to solve, importance to goals of the business, etc.
Listen to John’s analogy of the lawn service used for your house compared to that of a country club.
Being involved in sourcing, performance management, and termination of vendors with valuable impact to the business is something to include.
You want a recruiter to think “even though they were not in people management, they have the right experience.”
If you’re a listener who looks to hire first time managers, we would love to hear how you determine the right candidate and level of experience.
Going through the hiring and firing of vendors gracefully and maintaining relationships helps keep your network strong when you’re in a bind or when opportunities arise. Episode 12
John mentioned just recently reaching out to some folks from a former vendor of his from years ago.
Episodes on professional networking:
Episode 64 - Your Position Has Been Eliminated with Mike Burkhart Episode 64 Getting Fired
Episode 31 - Scaling for a New Endeavor Episode 31
John cites some Manager Tools material
Using Your Network - Seven Manager Tools episodes which address professional networking to varying degrees Manager Tools Using Your Network