Is allowing a vendor to lead the project management of solution implementation the equivalent to letting the fox run the henhouse?

There is little doubt that implementing new technology or solutions into a business can be a difficult task and all too often, it’s the dynamic between the customer and the vendor that is the crux of most of the challenges.

Embarking on the customer-vendor journey is a long-term relationship that requires significant trust on both sides. This critical relationship tends to run into trouble from the outset when vendors become responsible for project delivery beyond their technical piece, particularly when there are differing points of view on what is being delivered.

Once issues begin to arise both vendor and customer’s eyes can be taken off the delivery of the scope, which can lead to vital energies being diverted from the project to dealing with conflict management.

Typically engaging an independent integrator to execute the project from the outset can considerably reduce the risk of a toxic environment forming between the vendor and client and lead to better project outcomes.

Either way these projects are always a challenge and we explore below some of the fundamental reasons why getting vendors to deliver your projects may not always be the right approach.

Different Definitions of What Success Looks Like

The reality is that the vendor and client organisation will approach a project from two different perspectives, neither of which should be ignored. While both share the common goal of getting the product implemented, the desired outcomes and definition of success may differ.

The vendor is interested in seeing its product implemented; its team is focused on the content of the effort, which involves the actual execution of the technology. The organisation’s perspective reaches far beyond that goal, focusing on the outcomes resulting from the project, or the context perspective.

The organisation needs to take a broader view of the implementation process and manage the risks, benefits and changes the organisation will experience throughout the process to include the actual implementation as well as parallel activities affected by the implementation, such as the change management and on-going use and support of the system.

These differing perspectives affect the expectations, goals and approach taken by each party during the engagement. For example, the vendor is typically focused on reaching a “go-live” date in the shortest time frame possible, as its contractual agreements usually structure the largest payment to occur at that time, which can lead to Vendor project managers not being focused on Business Case benefits.

Understanding the Business Case

Most projects start their life with a business case that justifies the reasons a project should be undertaken, including the context for the project, its scope and the outcomes it will deliver. If a vendor is managing its delivery, the vendor’s focus naturally is on delivering their components, not the business benefits and the case for change.

Due to this potential narrow focus, problems arise when there is no clear link back to decisions made as to whether the project should proceed, if the scope is changed, or the benefits are revisited. These are all issues that lead to poorly integrated project plans.

The Disconnect Between Delivering the Solution but not the Project

Project managers should be responsible for delivery of the fully integrated project plan including the end-to-end schedule and a detailed Work Breakdown Structure for all key activities and deliverables.

There is often a disconnect when a vendor is project managing, as they are naturally focused on delivery of their component of the solution (e.g. software implementation, configuration and so on) to the exclusion or detriment of all other activities.

This can lead to no one in the project effectively managing key deliverables like change, benefits realisation or the creation of sustainable enterprise architecture for the system.

Is the Fox Looking After the Henhouse?

Are vendors measured on the product sold, additional consulting services rendered (including building future complexity into solutions) or successful implementations?

A recent study of a failed vendor-led project in the USA (implementation of Patient Management system into a small hospital) elicited this observation from the client’s lawyer, that the vendor, instead of providing ‘’one throat to choke,” provided “many products to buy”. After the initial engagement was signed, the focus of the large vendor moved to expanding their offerings and re-interpreting the scope of the project.

Quay observed similar issues on a recent Australian client site whereby the vendor responsible for the configuration and customisation work was also responsible for the project delivery.

This is essentially the fox looking after the henhouse.

The situation led to significant scope creep and the implementation of an overly cumbersome, heavily customised solution that did not achieve the business case benefits. The project did not get back on track until the vendor project manager layer was replaced with independent project management.

Can the Vendor Deliver the End-to-End Solution?

Successful project delivery requires skills beyond simply managing in-house technical teams which is typically a vendor-supplied project manager’s strength. There will be many stakeholders, teams and individuals that need to be managed beyond the Vendor’s technical resources.

The critical question is this: Does the Vendor have the requisite skilled personnel to deliver the end to end solution? Due to their narrow focus, Vendors may not possess project resources that have the ability to manage beyond the technical for a project which can create a skills gap and adversely impact the delivery of the entire project scope and if they do, will the Vendor assign their ‘’A’’ team to the delivery?

Whether your project is assigned the best project delivery resources depends on the vendors other competing priorities. Assuming they have sufficient bandwidth, if you are not considered a tier one client there is the significant risk you will not get assigned the best project resources they have at their disposal.

The True Value of Independence

Many businesses and vendors go into projects with the best of intentions and faith in their abilities to deliver them successfully, however having an intermediary in a customer-vendor relationship can be highly effective in ensuring a project doesn’t get bogged down when things go wrong.

The independent project manager or system integrator will hold both parties to account to keep their end of the bargain and in return they will be responsible to both parties for delivering the scope of the project.

It is a release valve that can protect the outcome of the project and also protect the vendor/client relationship into the future.

As project specialists, we develop fit-for-purpose strategy.  Contact us here to find out more about how we work with your teams or call 02 9098 6300.

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Quay Consulting is a professional services business specialising in the project landscape, transforming strategy into fit-for-purpose delivery. Meet our team ...