Today I want to talk about something every project manager encounters at some point: working with vendors, suppliers, or third-party providers.
While outsourcing to third parties can save time and effort, there are common pitfalls that can trip you up. In this post, I’ll highlight five mistakes you should avoid when working with vendors. Let’s dive in!
What Is a Vendor, Supplier, or Third Party?
In project management, vendors, suppliers, or third parties are external organizations that provide products or services for your project. This could be anything from developing new software to offering ongoing support for software you already use.
The key reason we rely on vendors is to avoid reinventing the wheel. Instead of building a solution from scratch, we use tried-and-tested products or services. However, this partnership requires careful management to ensure success.
1. Lack of Detailed Requirements
One of the biggest mistakes is not capturing detailed requirements at the start of the project. When you give vague or incomplete instructions to a vendor, you risk receiving something that doesn’t meet your needs. Vendors often refer to the initial requirements to justify their deliverables. If those requirements are unclear, they may charge extra to address the gaps later on—especially if you’re on a tight budget.
To avoid this mistake, invest time in defining clear and detailed requirements. Engage stakeholders early in the process to ensure all perspectives are considered. Once finalized, document and sign off on the requirements to minimize miscommunication.
2. Blurring Professional Boundaries
Maintaining a good working relationship with vendors is essential—but don’t let it turn into a friendship. While it’s important to work closely with vendors, overly personal relationships can make it harder to hold them accountable when things go wrong.
The best approach is to be professional, courteous, and respectful while maintaining a level of formality. Avoid overly personal interactions that could compromise your ability to enforce standards or address issues assertively.
3. Failing to Agree on Deliverables Early
At the start of the project, it’s critical to clearly define what the vendor will deliver. This includes the end product, as well as any supporting documentation, testing evidence, or quality assurance measures.
The solution is to outline these deliverables during the planning phase and ensure both parties understand the expectations. If required, ask for evidence of testing or other quality checks. Documentation of these agreements helps avoid disputes later.
4. Ambiguity Around the Definition of Done
Another common pitfall is failing to define what “done” means for each deliverable. Without a clear definition, disagreements may arise about whether a task is complete—especially when vendors request payment.
Avoid this by establishing criteria for completion for every deliverable. Review and agree upon these criteria with the vendor before the project begins, ensuring all parties understand and sign off on what “done” looks like.
5. Micromanaging Vendor Resources
As a project manager, it’s tempting to take control of everything, including the vendor’s resources. However, micromanaging their team can blur lines of responsibility and lead to inefficiencies.
The better approach is to trust the vendor’s team to manage their resources. Instead of overseeing their processes, focus on holding them accountable for deliverables. Work with their project or budget manager to stay aligned without stepping into their operational territory.
Final Thoughts
Managing vendors, suppliers, or third parties is an essential skill for project managers. By avoiding these five common mistakes—unclear requirements, blurred boundaries, undefined deliverables, ambiguous definitions of done, and micromanagement—you can build successful partnerships and ensure your projects run smoothly.
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