This article was first published in The Straits Times – Recruit on 11 November 2016 contributed by ThunderQuote co-founder Junming Tan.
The right processes make for better working relationships
Organisations frequently need to outsource work to specialised service providers or purchase products from third party vendors. However, finding the right vendors is not always an easy task. Furthermore, the rise of freelancers has muddied the waters for corporate buyers. While costs are often lower, their risk profile may be drastically different, meaning more checks may be required. Whether you are part of your organisation’s procurement team or you are looking to work with a vendor on an outsourced project, here are tips to select the right partner and maximise chances of your project’s success!
Is your supplier genuine?
The first step is to verify the legitimacy of your prospective supplier. Check their business registration and public documents such as ACRA Bizfile to ensure they are registered. If the vendor provides a list of references, call up a few to ensure their validity. You can also check what value the vendor brought, whether they are easy to work with and if the vendor has good after-sales support.
Nowadays, most businesses have their own website and domain. It is simple to run a WHOIS check by Googling “(business domain name) Whois check” and ensure that the registrant is the organisation in question. I also recommend checking the number of years registered, domain age and whether they have a local address to be used as additional points of verification.
Besides worrying about fraudulent suppliers, another concern is the vendor’s quality and ability to provide long-term support. Quality checks can be done through basic assessments such as vetting their websites, collaterals, past portfolios and testimonials. If you are sourcing through a B2B vendor platform, then certain checks are likely to have already been performed. Nevertheless, it is still wise to do your own background work. Whenever possible, ask friends or business contacts if they have any referrals. If a trusted contact has already established a good working relationship with the vendor, they have already done a background check for you.
For certain products and vendor types, especially for significantly important or high value projects, site visits are advised to ensure the quality and check on the vendor’s capabilities. Meeting face-to-face meet with the vendor will greatly help in determining their trustworthiness. If meeting in person is not possible, then make a call or use Skype. Ask them questions about their history, products, previous similar jobs, payment and delivery terms, to ensure they know their field and are capable of meeting your needs.
Getting independent vendor quotations for fair comparison
It is recommended to get multiple quotations from suitable vendors (minimum three) in order to make a fair comparison, before making your final decision. Unfortunately, people often find the process of getting multiple quotations from relevant vendors a hassle and time-consuming. Online platforms like ThunderQuote, GeBiz or Freelancer assist in the matching processes and guarantee an independent assortment of vendor quotations for fair comparison.
Develop risk profiles and put in place risk mitigation strategies
Generate risk profiles on your shortlisted vendors to check on their long-term viability. This is especially important if your project is likely to take several months to complete, or if you require ongoing support after the initial period. In addition to checking with references or previous clients, some of this information can be found through ACRA or third party-tools such as MyFINB. Reviewing vendors’ financial data is important but tough to execute, hence less frequently done. This is where specialized tools like MyFINB become useful, as it provides data extraction, analysis and summaries. This makes due diligence simple and accessible.
Once you have identified possible risks, determine ways to manage them. For example, a local business wanted to implement an IT system to provide HR support. They were about to hire a large reputable international company to build a customised IT system. However, the local business quickly realised the risks of poorer ongoing support due to the fact that the international company was based overseas. Finally they selected another international company that had a local branch office, to provide ongoing support. They also incorporated stricter documentation and training requirements as part of the project scope, and also requested for a third-party developer advice to ensure the system was coded on a commonly used language. This made it easier to transfer the project to other vendors, if necessary. These extra steps greatly mitigated risk of support failure.
Once the vendor is confirmed, regular monitoring is essential to ensure the risk profile and risk mitigation strategies are up-to-date. Keep track of important metrics, to ensure good performance of vendors during the contract period. An open communication channel with your vendor is important to provide feedback and enable them to stay on track, while they update you early on any possible obstacles or risks.
Junming Tan is co-founder of ThunderQuote is the most comprehensive business services portal in Singapore, Australia and ASEAN , where hundreds of thousands of dollars of procurement contracts are sourced every month by major companies like Singapore Press Holdings, National Trade Union Congress and more.
This article was first published in The Straits Times Recruit on 11 November 2016.