S/W Supplier Relationship Management


Outsourcing is common practice in today’s Technology, Media and Telecommunications sector. Outsourcing involves the transfer of the provision and management of an entire product and/or service to a 3rd Party Product Vendor/Subcontractor. In general terms, the reasons include availability of expertise, flexibility, cost and coverage. When outsourcing takes place, the contracting organization and the 3rd Party Contractor enter into a contractual agreement that fully defines the transferred products/services and control of the provision of the products/services. Under the terms of agreement the 3rd Party Vendor acquires the rights to provide the products and/or services while the contracting organisation agrees to procure the services from the supplier for the term of the contract.


3rd Party Vendor Selection -


Once an organisation has decided to use a 3rd Party/Subcontractor to provide a product or a service, it is very important that the correct subcontractor be chosen. While the complexity of the subcontract does have an impact on the choice, some basic capability fundamentals still apply. These include the technical capability of the subcontractor to carry out the contract, the organisational capability of the contractor, the quality of the results that are required be they products or services, the subcontractors ability to deliver on time and within the required budget and the relationship between the contractor and sub contractor.

The objectives of 3rd Party Vendor interface and control are the following:

 

  • Generation of the Business case including definition of the justification for using a 3rd Party Contractor.

  • Generation of the 3rd Party Vendor Selection Plan.

  • Generation of the initial selection criteria leading to the creation of 3rd Party Vendor selection short list.

  • Generation of a Request for Quote (RFQ) to facilitate decision making on the final 3rd Party Vendor selection.

  • Selection of the 3rd Party Vendor.

 

The 3rd Party Vendor Selection Process diagram, provides a brief overview of the tasks and deliverables associated with the selection of a 3rd Party Vendor.

 


3rd Party Supplier Interface and Control -


In the outsourcing context the planning, tracking and control activities of the subcontracted work are performed by the 3rd Party Vendor/Subcontractor. The role of the contracting organisation is to ensure that the planning, tracking and control activities are performed properly and that the products/services delivered are consistent with the its acceptance criteria. On an ongoing basis, both the contracting organisation and the subcontractor must work together to achieve these results.


The objectives of 3rd Party Vendor interface and control are the following:

  • The subcontracting organisation and the 3rd Party Vendor/Subcontractor agree their commitments to each other.
  • The subcontracting organisation and the 3rd Party Vendor/Subcontractor agree interfaces and maintain ongoing communications.
  • The 3rd Party Vendor/Subcontractor performs the planning, tracking and control activities associated with contract.
  • The subcontracting organisation tracks the 3rd Party Vendor’s/Subcontractor’s actual results and performance against the commitments defined in the contractual agreement.

The 3rd Party Interface & Control Process diagram, provides a brief overview of the tasks and deliverables associated with the interface between a contractor and subc0ntractor in an outsourcing situation.

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