How to be a Superhero Vendor Manager?
Imagine you receive a new translation request, into your company’s local language. Who would you assign this project to? Write the name of the translator that you would contact first.
That’s the task we all received during my vendor management training over 10 years ago in Rome. There were 15 participants together with me, sitting at a huge U-shaped table. Each of us wrote down one name and then we read it out loud one after another to the whole group. It was easy, we did it quickly and we were all happy we did a good job.
And then our trainer pointed out that none of us asked about the deadline, specialization, CAT tool to be used nor any other characteristics of the project. We all just knew who would most likely get this project from us.
And there’s the rub. That is how almost all project managers work, too. There are lots of vendor management strategies, almost all translation companies employ vendor managers. But still, in the end, project managers would assign projects to the same vendors as usual.
Why is it so? When a project manager receives a new project request, he or she strives to start this project as soon as possible, because in a few minutes he or she is likely to receive another one. So project managers, as all humans, like to work with people who promptly confirm acceptance of a new job, who communicate well, who are nice, and who deliver on time. They have their preferred vendors who are like that, and that’s why they would give them all possible jobs. All they want is to have the new project started quickly … and move on to the next one.
What is the result of such a situation? Translation companies are always using the same vendors and the pool of vendors actively cooperating with the company doesn’t grow. The vendor manager is frustrated, and when the company needs to engage more vendors for a rush or big project, the vendors from outside of the preferred pool are no longer interested in cooperation or their rates have already changed. Hmm… that’s pretty bad!
Translation company managers are well aware they need to grow their active vendor pool constantly. That’s why they hired the vendor manager in the first place. Project managers, on the other hand, need to start projects as soon as possible and thus are likely to use their preferred vendors who always say “yes” to a new job. We are in the paradoxical situation of two business goals which are opposed to each other.
How can we solve this situation? Let me share two hints with you.
First – it’s great to use a system which can send project requests automatically to a pool of vendors that match quality and project criteria. In that way, each new vendor added to the list, if they match future project characteristics, will be automatically offered the possibility of cooperation. The decision about who to offer a new job to will be taken by the system, based on defined project details and information stored in vendor profiles. Not only will new vendors start working with a translation company this way, but the final project’s allocation might also be smarter from a cost and quality perspective.
Second – include usage of new vendors in the commission plan for project managers. Such a commission plan can be based on different KPIs and components. You can incentivize usage of new vendors by increasing the impact on the commission received by each project manager. In that way you will align company business goals related to vendor management with the goal of your project managers. Everyone will be happy and your vendor manager will find sense and satisfaction in his or her work again.