Can subcontractor risks really affect your project, you wonder? It would if your work depends on it. Organizations outsource 60 to 70 percent of their project tasks to firms and consultants. Such hefty dependency is because these companies do not have the resources or budget for it. In this article at the Association for Project Management, John Ayers points out subcontractor risks you might face and how you can avoid them:
Avoiding Subcontractor Risks
Subcontractor risks are genuine and hamper your progress. However, there are quite a few benefits that make organizations choose them. Affordable services and technology usage are a few of the popular reasons for hiring a vendor for your critical tasks. Since the world is more interconnected to progress faster, you must tackle these subcontractor risks head-on:
Steps to Prevent Risks
- Have you run into subcontractor risks when they failed to deliver projects on time? Contractors usually have less time because they must hear from you, draw up a proposal, and then get to work. They hardly get to analyze the proposal from different angles, so keep a buffer after their proposed timeline, budget, or resources.
- You cannot depend on them to consistently deliver on time. Why not have a risk mitigation plan ready which you can sit with them and review occasionally? Meet them in person if your project is large because you cannot talk about the minor issues over the phone or a virtual meeting.
- Consider how the suppliers of the subcontractors work. Are they at par with the industry benchmark, or are they preventing your contractors from putting their best foot forward? Have checkpoints regarding cost, schedule, issues, etc., to understand the subcontractor risks.
Carefully select your subcontractors because you will depend on them to get the project out of the door. Go through earned value management, project management, risks, and subcontractor management before hiring them.
To view the original article in full, visit the following link: https://www.apm.org.uk/blog/why-subcontract-management-is-a-cornerstone-of-project-risk-management/