Expectation-Setting and Critical Communication with Outside Vendors

by Brian Jaffa, Senior Account Manager, Quest Diagnostics Incorporated

Whether you are managing an outsourced development project or installing vendor supplied application software, it is imperative you properly manage the vendor's efforts to ensure a successful project implementation.

Each project will be unique based on its size, cost, duration, resources involved, level of complexity, and level of criticality. Following these recommendations will lead to a successful installation and create a solid foundation for communication after implementation.


These steps establish internal alignment to the project objectives as well as set the baseline for oversight of the initiative.

  • Develop a contract that provides a clear representation of each party's responsibilities. Establishment of a contract provides a mutual basis for the on-going business relationship. As such, ensure that it includes items such as definition of terms; performance criteria for payment; staggered payment schedules based on deliverables (if possible); and grounds for termination. Performance criteria should revolve around quantifiable measures: receipt of working code or reaching pre-defined milestones, for example. This approach will help keep the vendor "on the hook" for constant delivery throughout the project.
  • Determine the key project requirements. This requires working with your business partners to ensure the critical success factors (CSFs) are agreed upon across the internal project team prior to engaging a vendor. These CSFs should be documented as part of the Statement of Work and shared with the vendor as a mutual understanding of the key requirements. CSFs will vary depending on the type of project and can range from extremely technical ("ensure application can handle 1000 simultaneous users") to user-driven ("all users will experience response time of less than 1 second").
  • Create a detailed Statement of Work (SOW). Carefully document the expected deliverables and milestones from both parties. Itemize the CSFs (created above), and their acceptance criteria. Define the baseline project schedule and the change order process, including what constitutes a change order and how they are approved. Identify the communication mechanism for project updates (i.e. weekly meetings, submission of project overviews) to ensure the engagement—as measured by the SOW—is successful.
  • Establish a project structure to facilitate communication. Depending on the size and scope of the project, an internal steering committee should be implemented and meet regularly, perhaps monthly or bi-monthly, to make strategic decisions on the project and remove the "big rocks." A typical Steering Committee roster might include the project sponsor, project managers, customer representative, and perhaps a project executive. Assign project managers on both sides to oversee day-to-day efforts and work closely with their project teams to ensure all sides are updated on the status, issues, and risks.

During the Project

  • Conduct a formal kick-off meeting. Use this time to re-affirm the purpose of the project with your internal customers as well as the vendor. Review the roles and responsibilities of each team member, the high level requirements and the key deliverables. Ensure everyone is familiar with the established communication mechanism and the issue resolution process, including escalation procedures on both the internal and vendor teams.
  • Implement a reccurring status meeting. This should be a standing meeting, with a formal agenda, held at a set time and place. Items to review can include: tracking to project plan; open issues; upcoming milestones; discussion points; and items that may require steering committee review. The internal project manager should run the meetings, however, based on the phase of the project (i.e. the development phase if an outsourced initiative), the vendor-supplied project manager may provide the majority of updates. Be sure to document the results of the meeting and share them with the entire project team, including the vendor liaison and "one level up" on both sides.
  • Utilize a project management tool to share information. Where possible, create an environment where the entire project team, including the vendor, can share documents and files. This will facilitate the sharing and storing of information and in many cases avoid the issue of version control and/or e-mail management. This is especially helpful when the vendor is located off-site or in a different time zone.
  • Initiate periodic project reviews. To ensure proper communication across both organizations these formal reviews should include the project team leaders as well as the internal sponsor, customer, and the vendor customer relationship manager (CRM). While the steering committee oversees the project from a strategic standpoint, the project review provides detailed insight on the engagement by looking at the project and understanding what has or has not gone well and how things can be changed going forward. The agenda can include a review of progress to date, highlights of recent accomplishments, discussion of open issues, and agreement on the approach to resolve those issues. Where necessary, use the statement of work as a baseline for agreed upon expectations. The results of the reviews should be shared with the steering committee as appropriate.

While not all of these recommendations will work for every project, using the steps above as the foundation for project oversight will minimize many of the problems that occur with outsourced development and vendor supplied application installations.

Brian Jaffa is a Senior Account Manager within the Information Technology department at Quest Diagnostics Incorporated, provider of laboratory diagnostic testing. He has been managing large software implementations for the past 8 years, including applications developed internally and supplied by outside vendors. Brian can be reached via e-mail at Brian.D.Jaffa@questdiagnostics.com or via phone at 201-729-7881.
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Related Templates and Guidelines
Vendor Assessment Checklist
Partner Contract Guidelines
Communications Plan
Project Escalation Process Guidelines

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