#16　How to Work Effectively with Inflexible Overseas Vendors

Hitoshi Goto

Ukihiko Takagi

In the previous article, we covered infrastructure risks to watch out for in overseas projects. This time, we will look at how to work effectively with inflexible overseas vendors.

Setting Review Dates at the Contract Stage Is Important

In Part 10 of this series, we mentioned that Brazilians do not worry much about deadlines. In contrast, India and China tend not to deliver early even when work is finished ahead of schedule.

Some may argue there is no problem as long as delivery is on time, but if you expect them to use that extra time for thorough testing, that is not the case.

They seem to think, “If we deliver early and defects are found, we will have to fix them immediately,” or “If they think the development team has spare capacity, they will demand other tasks be moved up.”

That said, if delivery is on time (though delays are frequent), that itself is not a problem. The problem is when unintended deliverables are submitted.

Therefore, not just for China or India, it is important to clearly specify review and inspection periods for deliverables in the contract, along with the delivery date.

In Japan, the delivery date is written in the contract, but review dates are decided later when creating the project plan. In global projects, however, the key point is to set review dates at the contract stage.

Allow Time Buffer and Secure Budget for Specification Changes

Japanese vendors have become considerably more rigid than in the past, but it still seems common for them to accommodate schedule changes for urgent requests or priority changes.

You need to accept that such flexibility is fundamentally impossible with overseas vendors. This is because they are contract-oriented, internal controls are strict, and doing anything outside the contract risks being called a compliance violation.

This should be the same in Japan as well, but with Japanese IT vendors, when relationships are good, adjustments through discussion are often possible. For those working with overseas vendors for the first time, this inflexibility may be beyond imagination.

Therefore, the best approach is to finalize specifications as much as possible at the contract stage to avoid changes, but the troublesome reality is that this is often not feasible.

The practical countermeasure is to allow buffer time and secure budget for specification changes. In practice, we often proceed this way as well.

However, some projects may not have that luxury either. In such cases, you will need to select a flexible company at the vendor selection stage.

Specifically, this means choosing companies that want to continue working with Japanese companies in the future.

However, even such companies will not do everything unconditionally. For example, it is important to negotiate based on give-and-take, such as supporting the vendor with issue organization and initial analysis work that they should do, in exchange for earlier delivery of deliverables.

<< Read Part 15 of the Series | Read Part 17 of the Series >>