Posted by: kerrywills | September 24, 2010

The future of Project Management: Vendor Management

Every big program that I have worked on in the last 15 years has involved a vendor/partner of some sort. This could be a software product vendor, delivery partner or specific role (such as QA testers). Vendors have become such an integral part of large programs that PMs need to improve their skillsets around vendor management. This includes things like…

  • Understanding the procurement process and how to engage vendors
  • Understand the financials around vendor contracts (fixed bids, milestone payments, etc)
  • Manage supply and demand of work as it affects vendor resources
  • Invoice reconciliation to manage that the work completed matches what was billed for

It is not enough today just to understand PM fundamentals. PMs need to increase their acumen around vendor management and understand when and how to engage vendors properly. Some examples include…

  • When to use onshore vs offshore resources
  • When to manage something internally vs using a vendor
  • How to monitor vendor work and hold them accountable for delivery
  • When to use vendors as additional resource capacity

This trend will continue to become more prevalent and we, as a profession, need to embrace it and understand how to leverage it to make us successful.


  1. Have you seen more success in projects where you have treated a vendor as a partner and helped them make your Programs successful? Meaning instead of vendors being treated like “outsiders”, treat them as part of your team – Keeping them accountable for their work but also keeping the Employees accountable for their work too.
    I have been a Vendor for most part of my career and seen a lot of success in partnership. I advocate Partnership wheever I go but see very few Client / Vendor Managers receptive to it.
    In most places I have seen an attitude of – Lets watch the vendor struggle and when they make a mistake lets take them to “task”. What I dont understand is, how and why people dont understand that this approach will make their Organizations Projects/Programs fail. Your thoughts please

  2. Binny I completely agree that it has to be a partnership to work. The main point of the posting is that Project Managers need to add partner management to their toolbox because the nature of projects today involve many partners.

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