You just secured the budget to scale your product, and now every decision you make needs to show value. Bringing in external vendors is necessary for speed and expertise, but it comes with risks—misalignment, hidden costs, security concerns, and the possibility that deliverables won’t meet expectations. If things go wrong, you’re the one who has to answer for it. A survey by Deloitte found that 71% of procurement leaders believe that increasing supplier risk is a major challenge facing their organization.
Managing external vendors in a corporate environment isn’t just about contracts and deadlines. It’s about ensuring seamless collaboration, maintaining product stability, and proving ROI to leadership. Without the right approach, you could face communication breakdowns, cost overruns, or vendor lock-in—turning what should be a growth initiative into a bottleneck.
In this article, we’ll break down the biggest challenges of managing external vendors and provide practical strategies to keep your project on track.
Working with external vendors can be a strategic advantage—giving you access to specialized skills, accelerating timelines, and allowing your internal teams to focus on core business goals. But it also comes with risks. Without the right structure in place, vendor relationships can lead to delays, misalignment, and unexpected costs.
Here are the biggest challenges you need to anticipate and how to address them.
When working with external vendors, you don’t have the same level of control as you do with your internal teams. Vendors have their own processes, priorities, and working styles. Without direct oversight, it can be difficult to track progress, ensure accountability, and intervene early when things go off track. According to Gartner, 60% of organizations work with more than 1,000 third parties, complicating oversight and increasing the potential for misalignment.
Your vendor might be focused on delivering what they think is a great solution, but if they don’t fully understand your company’s objectives, the results may miss the mark. Without a clear strategy, vendors may prioritize speed over quality, focus on unnecessary features, or fail to align with long-term business goals. A case study by McKinsey highlights that closer relationships between buyers and suppliers can create significant value and help supply chains become more resilient.
Bringing in external vendors means introducing new workflows, tools, and communication styles into your existing corporate structure. If not managed properly, this can lead to inefficiencies, duplicated efforts, and friction between teams.
Each of these challenges has the potential to derail your project if left unaddressed. But with the right structure in place, you can build vendor relationships that drive efficiency and support your growth goals. In the next section, we’ll dive into the most common vendor pitfalls—and how to avoid them.
Even with the right vendors in place, things can still go wrong. Unexpected costs, security risks, and over-dependence on external teams can turn what should be a strategic advantage into a liability. To avoid these pitfalls, you need a structured approach to vendor collaboration—one that ensures transparency, accountability, and long-term flexibility.
We’ve worked with corporate teams scaling digital products across industries, and we’ve seen firsthand how mismanaged vendor relationships can slow down progress. The key is proactive oversight, clear expectations, and built-in safeguards to keep projects running smoothly. Here’s how we approach these challenges—and how you can too.
A vendor relationship that starts with a clear budget can quickly spiral out of control. Scope creep—small, seemingly harmless additions to a project—can add up fast, leading to delays and inflated costs. Vendors may push for extra features, or internal stakeholders may request changes that aren’t properly evaluated. Without tight financial oversight, you could find yourself justifying budget increases to leadership with little to show for it.
Our Rapid Prototyping approach helps corporate teams validate ideas before committing to full-scale development, reducing costly rework down the line.
When vendors handle customer data, proprietary technology, or sensitive business information, security risks increase. If a vendor fails to meet compliance standards or follows weak security protocols, it could expose your company to regulatory fines or reputational damage. The average organization has 182 vendors connecting to its system each week, many requiring privileged access, which poses significant security risks if not properly managed. For enterprises, this is non-negotiable—yet too many companies only realize a vendor is a security risk after an incident occurs.
We integrate security reviews into our development lifecycle, working with our partners to ensure compliance from day one rather than as an afterthought.
Vendors that become too embedded in your operations can create long-term dependency, making it difficult (and expensive) to transition away if things go south. This is especially common when a vendor builds custom solutions without proper documentation, making knowledge transfer almost impossible. If your vendor holds the keys to your technology, they hold the keys to your future.
Our approach is centered on transparency—whether that means co-developing solutions with internal teams, documenting every decision, or helping companies build internal capabilities to reduce reliance on external partners.
The key is to treat vendors as strategic partners, not just service providers. This means aligning expectations from day one, integrating them seamlessly with your internal teams, and creating a culture of shared ownership. When done right, vendors don’t just execute tasks—they actively contribute to your product’s growth.
In the next section, we’ll cover how to build strong, productive vendor relationships that not only mitigate risks but also accelerate product success.
Avoiding risks and setting clear expectations will keep vendor relationships from derailing, but if you want real value from external teams, you need more than just control—you need collaboration. The most successful partnerships happen when vendors are treated as an extension of your team, fully aligned with your product’s goals and empowered to contribute at a strategic level.
We’ve seen the difference between vendors who simply deliver on a contract and those who become true partners in scaling a product. The key is alignment, transparency, and shared accountability. Here’s how to make it happen.
Choosing the wrong vendor can set you back months. Some look great on paper but struggle to integrate into corporate workflows. Others lack the technical depth to support long-term scaling. The best vendors aren’t just technically competent—they understand corporate complexity, work well across teams, and can flex as your product evolves.
We often begin with a Product Design Sprint, allowing corporate teams to test our approach, see how we collaborate, and ensure alignment before diving into full development.
Without a shared definition of success, even the most capable vendors can go off track. Ambiguity in KPIs, unclear expectations, or misalignment with business goals can lead to frustration on both sides. The earlier you set concrete, measurable success criteria, the easier it is to track progress and course-correct when needed.
Our Product Validation Sprint helps corporate teams clarify their business objectives and translate them into actionable development roadmaps. This ensures all stakeholders—including vendors—are aligned before work begins.
Corporate teams often struggle with vendor communication—especially when working across different time zones, tools, and reporting structures. The more fragmented communication becomes, the higher the risk of delays, misunderstandings, and misalignment.
Getting vendor relationships right isn’t just about avoiding pitfalls—it’s about creating an environment where external teams actively contribute to your product’s success. When vendors are aligned with your strategy, understand your business goals, and integrate seamlessly with your internal teams, they become more than just service providers—they become growth partners.
But how do you measure the impact of a vendor partnership? How do you ensure that the investment you’ve made translates into real business value?
Let’s look at a real-world example.
So far, we’ve explored the risks of working with external vendors and the strategies to mitigate them. But what does successful vendor collaboration actually look like in practice?
To illustrate how the right approach can turn external vendors into a real asset, let’s look at a case study. BMJ, a leading healthcare publisher, needed to scale their digital products efficiently while maintaining security and compliance. Their challenge wasn’t just finding a vendor—it was ensuring seamless integration, maintaining product stability, and moving fast without disrupting existing workflows.
Here’s how they tackled these obstacles and built a vendor partnership that helped them scale successfully.
BMJ didn’t treat their external development team as an outsourced service provider—they treated them as an extension of their own product team. From the start, our team was involved in strategic discussions, ensuring they understood not just what needed to be built, but why. This alignment helped bridge the gap between business goals, user needs, and technical execution.
One of the biggest risks when working with external vendors is disjointed workflows. To avoid this, BMJ and the development team worked side by side, using the same tools, attending the same meetings, and following the same development processes. This deep integration created a frictionless collaboration, where external developers weren’t just executing tasks but contributing to product strategy, problem-solving, and continuous improvement.
BMJ needed to move quickly without sacrificing quality. By using Agile methodologies, our team helped roll out new features in controlled increments, allowing BMJ to test, validate, and refine based on real user feedback. Instead of waiting for months-long release cycles, BMJ was able to deliver meaningful updates in weeks, keeping pace with evolving market demands.
In healthcare, security isn’t just important—it’s non-negotiable. We worked closely with BMJ’s compliance experts to ensure that every development decision aligned with strict regulatory standards. By embedding security best practices into the development process from the start, they avoided costly rework and ensured that BMJ’s digital tools remained compliant as they scaled.
A successful vendor relationship isn’t just about outsourcing development—it’s about building a long-term partnership that supports growth. When external teams are properly integrated, strategically aligned, and given room to contribute, they don’t just execute tasks—they help shape the future of the product.
Managing vendors effectively isn’t just about keeping projects on track—it’s about ensuring long-term scalability, business resilience, and measurable ROI. As an executive, you’re not only focused on execution but also on how vendor relationships contribute to growth, efficiency, and competitive advantage over time.
Here’s how to think about vendor partnerships beyond the immediate project:
A vendor who delivers well in the short term but isn’t set up for long-term collaboration can create bottlenecks instead of growth opportunities. As your product scales, your vendor strategy needs to evolve with it.
Key considerations for scalability:
Executives don’t need to track every operational detail of vendor management—but they do need clear metrics that indicate whether vendor relationships are driving business value.
Key KPIs to track:
A Deloitte report found that companies with structured vendor performance management frameworks achieve higher cost savings (12-15%) and 20% faster execution on key projects.
For executives, vendor management isn’t just about whether the work gets done—it’s about whether the investment was worth it. If you want to secure continued funding for external partnerships, you need to clearly communicate ROI to leadership.
How to present vendor ROI effectively:
Scaling a product is never just about the technology—it’s about having the right partnerships in place to support long-term growth. When vendor relationships are managed strategically, they drive efficiency, reduce risk, and create competitive advantages.
Now, let’s wrap up with the key takeaways from this article.
Managing external vendors for corporate growth projects is never just about outsourcing tasks—it’s about creating a partnership that drives real business impact. Done right, vendors don’t slow you down or introduce unnecessary risks. They help you scale faster, iterate smarter, and bring new expertise into your product development process.
If you approach vendor relationships with structure, transparency, and shared ownership, they stop being a source of friction and become a key driver of your product’s success.
And that’s the goal—not just to manage external vendors but to turn them into a competitive advantage.