How to Assess Your Vendors: a Must Have Guide For Project Managers


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You’ve finished a project, and your client is delighted with the final product, but a week later, something terrible happens: there’s a data breach affecting the hosting service. 

Turns out, all those emails back and forth between you and your client, their contact information, and everything they shared with you was scraped from your email provider’s server in a massive security breach. 

It’s big news, and now, your client is in touch demanding compensation. You appointed the provider, so they say you should have checked they were secure. Your company is in trouble.

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That’s what can happen if you don’t assess your vendors properly. It’s your company’s reputation at stake, not to mention all that data. That doesn’t mean you should forego them though. 

Without third-party vendors, you’d never complete a project – no business can do everything by itself. As a good project manager, you’ll be skilled at delegating (your Excel to do list no doubt has every task broken down and attributed to the best team member for the job). 

It’s no different when you’re selecting vendors. Who you work with impacts the customer experience, meaning choosing the right collaborators is important. Not only could it help you get more of those five-star reviews, but it could save you from costly mistakes too. 

So, you need to properly assess your vendors and consider the risks involved before you contract them. Here’s how to do it.

What are the risks?

The risks involved with third-party vendors can be broken into categories:

  1. Strategic. These are risks that hinder your ability to achieve your business goals. For example, if a vendor merges with a competitor of yours, it may affect your performance in the longer term.
  1. Reputational. If a vendor suffers negative publicity or their service is poor, this can reflect badly on you. For instance, one study showed 41% of customers place the blame for late deliveries on the retailer, not the courier. So choose wisely!
  1. Financial. These are risks that can have a direct impact on company finances. Lost orders are one example – if your address-lookup software fails at checkout, a user may abandon their order altogether. (This risk can be reduced by SaaS retargeting strategies, which help get those customers back after they’ve left your site.)
  1. Cybersecurity. Ransomware attacks alone have seen a 232% increase since 2019. Therefore, it’s vital to make sure your vendors are as vigilant about cybersecurity as you are. 
  1. Compliance. Do your suppliers follow all relevant laws and regulations in their business? Any violations could lead to hefty fines – for them and you.
  1. Operational. Anything that can prevent a business from operating falls into this category. If a vendor suffers an operational problem, it could lead to you being unable to conduct business as well. For example, if your vehicles’ insurer shuts down, your fleet may no longer be able to operate.

Many of these types of risks overlap, so don’t consider them in isolation. Look at the whole picture before choosing a supplier.

What to look for in a vendor (or sailing the…err…10 Cs)

In 1995, Dr. Ray Carter developed a popular model: the 10 C Supplier / Contractor Evaluation Model.

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By considering each category (there’s another ‘C’…), you can mitigate the risks. However, it can be hard to find out some of the information you need.

Here are a few examples to get you started:


What is it going to cost to use their services? If a vendor’s price doesn’t represent value for money, you might want to give them a miss.


Can they deliver what they promise? Customer reviews can be helpful here. Look at past clients of theirs and see if they were satisfied. You could even contact some of them directly and ask for opinions, particularly if it’s for something large such as designing your website. 

Consistency of performance and commitment to quality 

Your exploration of previous clients can reveal a lot here. Does the vendor consistently perform to a high standard, or is it hit-and-miss? You may decide to choose a vendor who consistently performs well rather than one who may occasionally be exceptional but is often poor.


Sites such as Ethical Consumer can be useful here to get an idea of how a company fares. Too many red flags and you might not want to associate with them.


‘Culture eats strategy for breakfast’, as Peter Drucker famously said. A vendor may have a fantastic strategy but, if their culture doesn’t match your own, it can be toxic. Check for news articles or comments from their leadership, and look at how the company treats its customers and employees. All these things can be good indicators of the company’s culture.

This leads into…


Even if a vendor’s culture isn’t bad, if they don’t think like you, it can lead to misunderstandings. Communication is easier with someone who shares your values and won’t make assumptions that are in conflict with your approach.

Cash and finance

Are they about to go into liquidation? Check their recently published accounts. If they don’t look solid, then you might consider them to be too great an operational risk. 

Control of internal processes

How do they handle their internal affairs? Do they have good systems in place for data protection? What about stock management? Are their products frequently out of stock? If they can’t run their own business effectively, you probably don’t want to work with them.


Are they so busy with other clients they won’t have time for you? You don’t want to be forever chasing them or having delivery dates pushed back because they don’t have the time to devote to meeting your needs.

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And afterward…?

Even if a collaboration isn’t as fruitful as you hoped, there are lessons to be learned. Ask yourself what went well and what could have gone better. Vendor evaluation can help you decide whether you want to work with a business again. Will you add them to your list of trusted suppliers or even work toward building a partnership with them?

Ideally, you’ll have a toolkit with all your processes ready to go, with everything from how to create your business strategy to an easy-to-use maternity leave letter template. This should include a list of low-risk, high-quality vendors to use. Creating a good evaluation process will save you time in the future and help develop an industry black book.

Getting to know your suppliers, both before and after you work with them, is key to ensuring success – and efficiency – in all your future projects. So, do your due diligence properly, and you’ll have a smooth and straightforward voyage ahead, with stormy seas kept to a minimum.  


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