Best Practices for Managing ERP Vendors in the Public Sector
In this video, we're going to talk about how to manage your vendors.
Milestones
You've done a lot of hard work on the RFP process, on the selection, on the contract negotiations, so how do you manage this new relationship? The vendor's interests need to align with yours. This is where the contract negotiation video will come in handy because you have to make sure you have the milestones and the balance of payments tied together so that you are not getting the short end of the stick. When the contract signed and the vendor starts the implementation process, you have to make sure that the vendors delivering on their promises that they've made in their contract and verbally. You have to make sure that the vendor is sticking to the timelines, is delivering the modules as requested, is making sure the right team members are present during your implementation and that you are getting what you're paying for or what you will pay for.
Vendor management tends to be a sticky subject when it comes to implementation. You might think that I've signed this contract with the software vendor and they should be doing all of this for me. You're not wrong, but like I said, this is a once in a career project that you have to really dig deep into because a lot of your credibility will depend on how well this goes. So how do you manage a third party when a vendor shows up with their team to implement your project or your system? This isn't going to be a one and done deal. The project will take anywhere from 18 to 24 months from inception, so you have to build a really good relationship with all of your vendors, but also make sure that you have processes in place to make sure that the invoices that show up, that the delivery that's happening on your end is in line with the contract, is in line with the milestones, is in line with the sequence of events, is in line with the resources they've promised you when the project starts.
Invoices
Depending on what your contract says, you will receive some invoices. Make sure that the invoices are being paid, are being paid for based on accepted milestone, based on accepted modules that have been delivered based on accepted deliverables and services that you've received from the vendor. Many clients make the mistake of paying invoices as they show up, especially when you are in an older E R P environment and there are no controls. There is no transparency, and your AP clerk may not know that this is the process that needs to be followed. Please avoid that. Let's make sure that you have the milestones in place and the payment milestones in place that allow you to check and invoice against what should be that allow you to check against the rates that have been promised, the milestones that have been promised, and the modules that have been promised.
Don't pay invoices without looking at these things. The second thing to keep an eye out for is vendor resources. Vendors may have proposed a stellar resource that has all these experience in your kind of E R P implementations in the proposal process. They may have brought some star project manager at the sales meeting, at the demo meeting, but who shows up when the implementation kicks off, is nowhere close to that person. Look out for resource constraints and resourcing that the vendor promised in the proposal and who showed up on site. Because the quality of a resource can make a huge difference in how well your implementation goes. And throughout the process, make sure that you're not letting the vendor dictate key dates to you. For example, a critical mistake e r P clients make is just taking a go-live date for granted. Vendor says, all right, based on our experience, your goli should be April 1st Without taking into account your blackout dates times you're on vacation times, you have board retreats or council retreats, any external factors that impact your timelines need to be blacked out so the vendor doesn't schedule over them and make sure that the vendor is paying attention to your blackout dates.
Go-Live
More importantly, the GoLive date should be mutually agreed upon and should not be taken for granted. The vendor doesn't know what your day-to-day life is like, what your city is going through, what your county is going through, what your key dates are, and to take a GoLive date from the vendor is not going to be in your favor. And even if you do, make sure that it's mutually agreed upon that there is an element of flexibility in there because if the system's not ready, please don't go live because it impacts not just your operations, but it also impacts your perception of the vendor and the public's perception of you. So let's make sure that the vendor's being managed most efficiently through a proper milestone management process, invoice control, and resource management. As you go through the a R P implementation process, you'll be sitting through a lot of sessions, day long sessions, your people who have day jobs will be sitting through process reviews and workflow sessions.
Make sure that those sessions are being useful and the way you make sure that it's being useful. It says, forward momentum and progress. The vendor's job is to drive you towards the GoLive date that they've promised their bosses. Your job is to make sure that that doesn't go against your interests. As you get closer to GoLive, that date becomes more critical. It becomes extremely critical that what the vendor is producing is being tested, is being checked off against your checkoff and milestone and acceptance checklists, and you're not accepting anything that is not a hundred percent in your favor. On goal live date, make sure that you have the resources available, that you have communicated well with all of your stakeholders, and that the vendors available either on site, preferably on site, to handhold you through the implementation process. We have experiences when on Goli Day a PM from a software vendor has told me he's out for a birthday party and can't be there. That is not acceptable. Make sure you have the resources on your side that can he hold your vendors accountable. If you wanna learn more about vendor management or if you're having trouble managing a software vendor on your E R P implementation, please reach out.