More tips for dealing with IT vendors

Now that I’ve covered the more humorous (and hopefully the less typical) side of dealing with vendors, I’d like to present some “lessons learned” for developing and maintaining positive relationships with hardware, software, and service providers. After all, we all need to use vendors’ products and services, and I’ve learned in my own experience that there’s a great deal that the technology executive can do to make a vendor relationship a positive experience for all concerned.

Here are some general tips, tips for during the sales cycle, and then tips for after the sale is over. Topic of a whole separate post in the future will be negotiations; this post will focus on relationship building and value determination.

General:

  • Mutual respect. These vendors, if you’ve called them in to present to you at all, obviously have something that could help you accomplish your three key goals: maintain revenue, increase revenue, or cut costs. A major thrust of your discussions should be to ferret out those aspects of their offering, while determining if the benefits will outweigh the associated costs.
  • Either way, the salespeople and technical representatives you are meeting with are earning their living this way and generally tend (in my experience) to believe strongly in their product. Treat them accordingly. Remember their names, look them in the eye, thank them for coming.
  • Equally, gauge (and do so quickly) that rare case where they appear to be regarding you just as a quick sale. You need to work with vendors who are truly interested in understanding your business problems and issues and seeing how their offering can help.

During the sales process:

  • It’s all about negotiation when it comes to price, and very little is ever set in stone at the outset. However, as you negotiate (and frankly, it took me a while to absorb this basic fact as deeply as I needed to), remember the basic truth that the vendor needs to make a profit too. There’s no point in repeatedly hammering the vendor down on price so that your company becomes little more than a difficult or unprofitable customer for them. That backfires.
  • Try to level the playing field so that you’re evaluating 2-3 fairly similar offerings from different providers, any one of which could do the job. Doing so keeps everyone, including you and your staff, on their toes and watchful of both cost and value, and it lets you gauge what you really want (features and functions) from the purchase.
  • Get your legal and financial people involved as early as they will accept (and usually that’s pretty early). Nothing is more frustrating to an in-house legal counsel, for example, than to be brought in and told, “everything’s all done, and we really need to get this signed this week.” That approach is bad enough in terms of your negotiating power, and it’s even worse for protecting your company.
  • The vendors will want to know what your budget is. Sometimes you’ll have a really firm idea of what that is. Don’t tell them. Sometimes you won’t have a firm idea, because it depends on the value that you’re seeing and the trade-offs you can make in other areas. Don’t tell them. Within an appropriate and reasonable range of product type (e.g., all Volkswagens, as opposed to a mix of Volkswagens and Bentleys), you want to focus on functionality, robustness, and overall value, long before you start discussing particulars of price.
  • The vendors will want to know who their competition is. They go crazy when they don’t know whom they’re up against, and they will tend to ask repeatedly in various ways. Don’t tell them, though. Again, it’s mainly about them understanding your business and needs, and about you understanding their offering. Everything else is largely a part of the price negotiation.

After the sale is complete:

  • Have a long memory. Good vendors are golden. Less good ones seldom change their basic approach. There are several vendors (a very small set, to be sure) that I will never work with again under almost any circumstances. Don’t let your natural trust and hope go too far towards giving business relationships a second chance if you’ve been seriously disappointed the first time around.
  • Don’t fall out of touch with your new vendor, any more than you want them to do that to you. Maintain regular contact. Make sure that you or a suitable delegate is in charge of the ongoing relationship–this means achieving an ongoing understanding what products they have in the pipeline and how it affects what you’ve purchased from them already.
  • Don’t get complacent, any more than allow them to become complacent. Each of your vendors should earn your business each time. Yes, it’s easier to just call up Joe for the next piece of equipment or software module, but within logistical boundaries, look to explore if there are viable alternatives. You owe that to your business and to your bottom line.

Lagniappe:

  • Deborah Perelman, Six Steps to Successful Vendor Management
  • ComputerWorld, Vendor Management Tips: Building Relationships
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