Getting the Most Value From Your Vendor Relationships

Life Sciences companies often turn to vendors to help their teams implement initiatives around strategy, technology, and processes. The stakes can be high for these engagements, especially when they deal with core business operations. This makes it all the more important that your teams and your vendors communicate, collaborate, and work together effectively.

Since the vendor relationship is different than a relationship between a full-time employee and an employer, there’s some unique considerations to make sure the pieces fit. There’s some important challenges to navigate and a lot of things to get right to build strong relationships with vendors. In this blog, we’ll examine the relationship and share some key tips for success.

Working with vendors: Two schools of thought, which share common challenges

Depending on a company’s resources and size, all the skill sets a company requires to operate may be unavailable from their existing staff. Vendors can provide the necessary skill sets to help get the job done.

When a company brings in a vendor, such as a consultant, for an initiative, the project leader might choose to consider the vendor(s) as part of the team and treat them like an employee. Alternatively, the project leader could instead consider the vendor a service provider—who is “paid for output.” Take for example, Contract Research Organizations (CROs) providing analytical or manufacturing services with defined outputs.

In both cases, there are some unique challenges to consider about the relationship itself. Like all relationships, there are times when you are working in harmony, but there are other times when disagreements in approach arise. Personalities, perspectives, and ways of working for some may differ. And, as more people are working from home currently, these challenges can be compounded.

A vendor isn’t just a new employee on the team. The relationship is different. When it comes to moving a project forward, incentive structures can compete with each other as vendors are often paid a premium rate for hourly work versus the rest of the core team who may be paid a salary.

Also, the relationship can tacitly be a negotiation, and vendors are often put in a position to continually sell their value to the organization. Their performance is measured differently too, and at times, their role is to actually assess how your core team is performing.

Along with the work of integrating a new person, these factors can be an added challenge. Among your teams, it can put a strain on collaboration, unity, productivity, and also create information silos and affect decision making. It can also impact the initiative, creating delays, breakdowns, miscommunications, and confusion over roles and responsibilities.

Take for example a drug development initiative where it’s important to be able to move nimbly and effectively in what can be a long process. If communications and hand-offs aren’t smooth, it can significantly slow the process down. The ability to have a strong, cohesive team is important in avoiding these inefficiencies.

Top tips for successful vendor relationships and initiatives

While the vendor relationship can be complex, there are some key steps to take to ensure everything moves efficiently and your team and organization maximize the value of the relationship. Here, it’s important to:

Clearly define roles and responsibilities: Define how some of the key interactions in the relationship will take place. In this effort, there’s some important questions to answer: Who takes the lead and when? How can your team and the vendor best communicate? Where and how will you define decisions? How will you handle differences of opinion?

Effectively communicate the goals: From the overall vision down to key milestones, continually communicating goals at every step of the initiative helps keep everyone on the same page and working toward the same objectives together.

Create an environment of collaboration: When there are a lot of moving pieces and people working on a project, it can create barriers to collaboration. Be on the lookout for and avoid the creation of silos. Look for opportunities to meet and share status updates, blockers, and progress. Share information and address disagreements in the context that you are all working toward a broader goal together.

Foster open communication across the team: Take steps to ensure that all the members of your team—vendor or employee—have a voice on the project, their opinion will be heard and valued, and they feel comfortable speaking up even if they have a difference of opinion. A collaborative environment can solve issues and conflicts early (and often) and it can help keep progress moving forward.

Be decisive in decision making: While everyone’s voice is important, the process around who, when, and how decisions get made needs to be clearly defined. It should be clear to everyone when a consensus has been reached and what next steps should be taken.

Taking on your next engagement

While the vendor relationship can be a unique one, some effort upfront to foster teamwork, collaboration, and communication can go a long way in helping the ship run smoothly. Considering the tips above, think about what factors you can optimize to help your next (or current) engagement succeed.