In my work managing projects, I spend significant time collaborating with vendors. As a small IT company with fewer than 50 employees, it’s necessary to outsource work. Whether good or bad, it’s impossible for our company to have all the skills and knowledge necessary to complete our work. For example, we recently launched a project to create a mobile app, and we lacked the internal resources to get this done. Thus, we had to find an external company to take on this project.

Get to Know the Vendor

The big mistakes we’ve made during the procurement process is moving too fast. In one case, we hired a graphics designer stationed in Europe who claimed she could create marketing materials to help build our corporate brand. She asked for an upfront payment, which we made promptly. Once the requirements were provided, it took her about a week to respond. After a week, she had failed to do any work. Instead, she had more questions about the requirements, and she mentioned that it was our job to tell her exactly what was needed. While I agree that we must have clear specifications, we also expect contractors to have the expertise in their field. After a month or so of poor performance, we decided to cut ties with this individual. She responded several weeks later asking for more money, and even threated a lawsuit.

Assign Project Manager to Handle Oversight Responsibilities

While the work is done by an external company, the buyer must ensure that someone is managing the contract. I recommend that a project manager keeps a close eye on the work. This individual will ensure the requirements are clear. Further, it’s essential to track work performance data related to budget, schedule, and scope. The project manager reviews the progress, and provides guidance when necessary. Given that the vendor is external to the company, it’s easy to forget about the work they are doing. If communication is inadequate, the outsourced company might stop doing work. They will get the impression that the project is not urgent.

Seek Milestone Presentations

To ensure that work is progressing according to the plan, the company should seek frequent updates. For example, I usually ask for a demo after a milestone is reached. This allows me as the customer to provide feedback along the way. By taking this approach, the final product, service, or result is more likely to meet expectations. These meetings can be held virtually by using Adobe Connect, Skype, WebEx, and so on. I also urge my team to have frequent meetings to discuss problems and opportunities. These get-togethers can be 15 minutes or so. The idea here is to stay engaged.

The other key point is to have a contract in place for the work that is outsourced. By having a legally binding agreement, the vendor is more likely to do the work as prescribed. The contract should include how changes are handled, the process of transferring the product or service to the customer, and the agreed payment structure. While contracts can spike the cost of running a project, they serve the purpose of making sure the parties meet their respective obligations.