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3 Principles of Technology Vendor Management

3 Principles of Technology Vendor Management

Whether you’re trying to find the right contractors to augment your existing technology team or hire a vendor to handle the bulk of your company’s development work, choosing the right technology partner can be incredibly difficult. For one, there are a TON of vendors out there. Everyone has a different brand, a different specialty, and different pricing. So what are buyers to do? There’s no Angie’s List for vendors who offer solutions to complex technology and business problems (yet).

For several months, I had the opportunity to work with a technology vendor based out of Boston, Janeiro Digital. The biggest lesson learned was this: buyers want to work with a partner who understands their business goals and can deliver. But finding the right partner and then managing them isn’t exactly a straightforward process. Here are 3 principles to consider for vendor management success.

Partnership

If you’re looking for a technology vendor that means you either don’t have the internal technical talent or you simply don’t have resources available for a particular project. This makes selecting the right vendor even more important. Will this vendor understand your business goals and deliver towards them or are they asking for hard requirements to develop in a vacuum?

With the shift in focus from IT (Information Technology) to OT (Operations Technology), vendor collaboration is critical. Gone are the days of the protracted requirements gather process. Business needs shift too quickly. Paul Hofmann, CTO of data visualization company Space-Time Insight, emphasizes this nicely in a recent interview with The Enterprisers Project:

“As more data is generated by the Internet of Things, businesses will live and die by their ability to not just respond more quickly to what is happening, but to be proactive in leveraging opportunities and heading off disasters before they occur.” – Paul Hofmann

Finding the right vendor who understands the ‘Why’ of your business is the first step. The next step is defining ‘How’ project execution and oversight occurs.

Project Execution

‘How’ the vendor operates is just as important as ‘Why’ you chose to partner with them in the first place. How involved will we be with their team’s delivery? How are decisions made about feature development? How will everything be reported and documented?

When I studied Computer Engineering, the Agile software development* process was becoming more and more accepted in the industry. Nowadays, it’s agreed as a ‘must have’ mentality for any company that touches technology. Also, these same agile methods have crept into other delivery management paradigms, outside of just software development. That said, managing this process internally is no simple feat, and it gets even more challenging when dealing with external vendors.

Managing a technology partner is difficult, but here are 3 critical questions to ask to check if you’re on the right track:

  • Is their delivery model flexible or static, agile or process heavy?
  • Do they execute in a phased approach or are they pushing for something large up front?
  • Is the relationship fluid or will it be difficult to operate without them in the long run?

Hopefully, you’ve found the right partnership and the answers to these questions are flexible (agile), phased, and fluid. Think ahead to when you will need to support everything in-house and if the project execution style and vendor relationship support that future state.

*Note:  The Agile Manifesto’s principles are included as an afterward at the end of this post. 

Price Transparency (Trust and Validate)

You’ve selected ‘Who’ your trusted vendor will be and are confident in ‘How’ they are going to execute. This means you understand ‘Why’ you want to work with them but when the topic of price comes up the question becomes, ‘Why this price?’

Some vendors will show full rate breakdowns for all resources along hours and project plans. Others will only commit to blended rates or charge dollars for certain development or ‘story’ points. Still, others will scope work and then price out as a package according to some black box model.

The important thing is there’s enough transparently to trust the underlying value of the proposed work. With the right oversight (see Project Execution above), you can validate your trust as the relationship grows and determine if any changes are needed.

Start with these 3 principles

In the end, there’s no silver bullet to technology vendor management but these 3 principles are an essential start. Your company is about to send premium dollars to work with an outside firm. Premium dollars should translate to premium results.

Afterward: The Agile Manifesto’s 12 Principles

  1. Customer satisfaction by early and continuous delivery of valuable software
  2. Welcome changing requirements, even in late development
  3. Working software is delivered frequently (weeks rather than months)
  4. Close, daily cooperation between business people and developers
  5. Projects are built around motivated individuals, who should be trusted
  6. Face-to-face conversation is the best form of communication (co-location)
  7. Working software is the principal measure of progress
  8. Sustainable development, able to maintain a constant pace
  9. Continuous attention to technical excellence and good design
  10. Simplicity—the art of maximizing the amount of work not done—is essential
  11. Best architectures, requirements, and designs emerge from self-organizing teams
  12. Regularly, the team reflects on how to become more effective, and adjusts accordingly

Reference: https://en.wikipedia.org/wiki/Agile_software_development

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