This is the first of a two-part article. Part 1 will deal with the horizontal relationships within vendor management and the second will deal with vertical relationships in vendor management.
You are running a strategic contract but it cannot operate in isolation of you or even your department. It will be important for you to establish horizontal and vertical relationships within your organisation where your vendor has an impact on your company’s departments and senior executives.
Doing this well will contribute to the success of your contract and your vendor.
Horizontal Relationships – what are they?
In larger contracts it is likely that the vendor will have several touch points across an organisation.
Take the example of a retailer who has outsourced haulage. This vendor will need to deliver stock to retail outlets safely and timely. The quality of services provided will have a direct impact on the sales department. The inventory division will be interested in how quickly the vendor can move stock and have low returns on damaged goods. A vendor manager for the haulage contract may sit in the inventory division but as you can see there are other stakeholders that they need to get to know and manage their concerns and their relationship with the supplier.
Horizontal Relationships – What are the benefits of understanding them?
At a basic level you will be able to ensure that your vendor is dealing with the appropriate people and is not miss-selling or over selling.
Sometimes internal stakeholders ask the vendor to do more than is contracted. This can put a vendor in a difficult situation. As a vendor manager you should educate your stakeholders of the limits and scope of the contract and this has the added benefit of preventing unmonitored scope creep.
The company and the vendor can work together to get best value out of the vendor’s market intelligence and your company’s strategic path; using their combined knowledge to do things better.
Horizontal Relationships – How do you manage appropriately?
A stakeholder plan for your strategic vendor is a must do. The plan will map the interest of each department as it relates to your vendor. Each relationship may require more or less management than others. Some of these stakeholders should be attendees at the contract governance meetings.
How do you track the Horizontal Relationships
The key metrics for the relationships may already be tracked in the SLAs and if it is not you can always check in with those stakeholders to see how this relationship is progressing.
Establishing horizontal contract relationships help your vendor and your contract to success and create the value as intended on contract signing.