Introduction

As more and more organizations look to focus on their core competencies and reduce their fixed operating costs, while simultaneously attempting to execute more projects, it is very likely that your project, even your first one, will involve collaboration with other organizations.

Although the specific process for establishing working relationships with other organizations depends largely on the industry in which you work, many project managers lack considerable exposure to procurement and vendor management. Often, this is due to organizational structures and the common use of procurement specialists who have specific education and training to understand the legal and contractual nature of this activity.

For these reasons, I felt it was important to include the so you can be better prepared for whatever you face on your initial project assignment.

The is not meant to be a comprehensive overview of procurement or vendor management, and I encourage you to study these areas further. Instead, this focuses on the outsourcing of project work (as opposed to outsourcing entire departments or other operational work) and on the key fundamentals and frontline tips that make the greatest difference in your ability to manage these project relationships and avoid the mistakes made by both first-time and experienced project managers.

Specifically, we review what activities are actually included in vendor management, the core principles that should drive your work, and helpful advice for both the buyer and seller project manager. In addition, we touch on the important basics of contracts, including the impact certain types of contracts have on the project manager, and we highlight the skills that make the greatest impact on your ability to effectively manage outsourced projects.