The Advantages of Using Project Vendors

Project vendors ensure successful completion of a project.

Project vendors are persons or organizations to whom all or parts of a particular project are outsourced. They provide a contractually agreed service during a specified amount of time, usually at a fixed cost. They are used in circumstances where the contracting organization sees definite benefits in terms of expertise, technology, cost savings, time and also as a means of reducing project risk. Project vendors may be used for any or all stages of a project's life cycle.

Expertise

A major reason for hiring project vendors is that they often have access to expertise and personnel not available to the contracting company. Project vendors may be specialists in niche areas and have a wealth of experience, ensuring successful project implementation. Some project vendors may also be required for the maintenance phase of the project life cycle, especially if knowledge transfer from the vendor's employees to the organization's in-house employees is difficult or impossible.

Technology

Project vendors, especially technology vendors, often have more advanced technology than the contracting company. Technology service providers in particular will often supply the contracting company with the required hardware and software on site for the duration of the project, resulting in cost savings to the organization. Outsourced service providers provide the contracting organization with access to their technology, which is usually kept at the vendor's site. Technology maintenance and upgrade costs are borne by the vendor. The benefits of access to the technology are realized by the contracting organization.

Cost Savings

Organizations typically use project vendors in circumstances where it is cheaper to use the vendor's services than to use in-house resources or to hire new personnel. The vendor brings expertise and resources that result in a significant cost saving for the hiring organization. Vendor costs for the initial stages of a project are usually contractually fixed before the vendor commences work, helping to keep project costs within budget. Maintenance costs are either fixed or floating but are usually designed to keep costs to the hiring organization minimal.

Time Savings

Projects are scoped for completion within a set time limit. Time overruns are a source of significant cost for projects and can result in project failure. Project vendors are often brought in to boost resources on a project in an attempt to save time and keep within the agreed parameters for a specified project.

References

• Projecttimes: The Risks and Benefits of Knowledge Process Outsourcing; Carlos Sanchez