Determining a Successful Partnership With a Vendor


A successful vendor partnership means different things to different parties, a payroll director said May 16.

For company management, success means having a vendor that “yields lower cost of delivery and improved service levels,” said Brent Gow, CPP, director of global shared services for Starbucks Coffee Co.

For the human resources department, success means that the “vendor’s solution did not create additional or different work with change in delivery model,” said Gow, who also is chairman of Bloomberg BNA’s Payroll Library advisory board. And for an employee, success means accuracy and timeliness of services,” he said.

Management of the vendor relationship means input from three teams, Gow said. The
executive steering team “establishes and enhances strategic business direction,” provides resources and manages client relationships, he said. Resources may include consultants and equipment, in addition to employees, he said. The relationship management team manages the performance contract and tracks metrics, he said. The service delivery and implementation team manages daily operations, monitors performance and tracks change initiatives, he said at the annual American Payroll Association Congress in Orlando, Fla.

The delivery and implementation team should tell a vendor what updates to the partnership it wants and how it wants them, Gow said. Before implementation, the vendor and the client should participate in a detailed product overview and construct flow charts to view improvements to processes, he said.

The parties should enter into a service-level agreement that defines what services would be performed and the time period covered, Gow said. The agreement should define the level of agreed-upon services, identify basic and potential fees to be incurred by the vendor and define the roles and responsibilities of each party, he said.

The agreement should contain a disaster-recovery provision that is up to date and approved by an
outside auditor, as well as a provision detailing how confidential information would be handled after the agreement is terminated, Gow said.

The client and vendor may agree to create a client advisory board composed of a group of
clients who would provide guidance and support on critical issues, Gow said.

A client advisory board may include five to 10 members who would serve two-year terms,
Gow said. There is no need to worry about an even-numbered board because the client would be the final decision maker, he said.

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