As more companies entrust system development and operations to external partners, what decides success is “vendor management.” This article explains what vendor management is, why it matters, and the concrete management methods that lead development and operations to success.
QCD Quality, Cost, Delivery — the three axes to manage | PDCA The cycle for continuously improving vendors | Win-Win The equal partnership to aim for |
The art of both “managing” and “collaborating” with a partner
Vendor management is a set of activities to properly select and manage external vendors entrusted with system development and operations, so as to lead a project to success. It’s not mere “order management” — it’s a discipline for optimizing quality, cost, and delivery while building a good relationship with the vendor.
In an era where outsourcing is the norm, “leave it to a good vendor and you’re safe” no longer holds. How the client manages decides the outcome — with the same vendor, different management yields different results.
“A project’s success is decided more by “management quality” than by the vendor’s ability.”
Even an excellent vendor can’t perform if simply handed the work. Management is what maximizes results.
A “hand-off” invites failure
🎯 Prevent quality variance Without management, deliverable quality isn’t stable. Setting standards and checking continuously is essential. | 💰 Curb cost inflation Added requirements and rework easily inflate cost. Proper management prevents budget overruns. |
⏱️ Avoid delivery delays Leave it alone with no visibility and by the time you notice, it’s too late. Visibility is key. | 🔐 Catch risks early The rule is to handle problems while they’re small. A management structure enables early detection. |
Balancing quality, cost, and delivery
The foundation of vendor management is balancing QCD (Quality, Cost, Delivery). Lean too far toward one and the others are sacrificed.
The flow of continuous improvement
Vendor management isn’t a one-off — it delivers value when run continuously through the PDCA cycle.
P Plan Clearly define the scope, QCD standards, and structure. | → | D Do Support day-to-day progress with regular meetings and progress sharing. | → | C Check Regularly evaluate the deliverable’s quality, progress, and cost. | → | A Act Surface issues and execute improvements for the next round. |
Manage according to the relationship
You don’t need to manage every vendor the same way. Classify by strategic importance and depth of relationship, then allocate resources optimally.
Spot use Important but one-off. Clarify quality standards and manage on a deliverable basis. | Strategic partner Important and ongoing. Collaborate closely and share information to grow together. |
Replaceable Low in both importance and relationship. Prioritize efficiency and keep management minimal. | Ongoing supplier Deep relationship but routine. Value stable operation and manage on a basis of trust. |
Three points to watch
A roadmap from adoption to improvement
Beyond “management” to “collaboration”
The most important thing is to see the vendor as a “partner pursuing success together,” not an “object to manage.” Balancing proper management with a relationship of trust is precisely the key that leads system development and operations to success.
BAP Solution Japan Co., Ltd. — a software development and offshore company serving the Japanese market, with a legal entity and offices in Tokyo and Osaka. With a highly transparent management structure, BAP leads development and operations to success.
Talk to BAP — free consultation →
Reduce the management burden and maximize results. BAP proposes the structure best suited to you.
