How to get along better with your IT vendors

We should have built enough time into the schedule to allow for recovery in the event of a problem and to accommodate an operational readiness test on each piece of equipment. That would also have permitted a go/no-go decision point, so that we could have rescheduled the rollout and not risked business disruption. But we both knew that the root problem was that we could not trust our supplier. I made an appointment at the vendor's headquarters and, seeking justice, got on an airplane.

The executives at the meeting were conciliatory, but I became even more enraged when they told me that my order had gotten less attention than it perhaps deserved because they had received an order from a larger customer. Were they saying that our formal agreement need not be honoured because a chance to make more profit had arisen? I felt as if they were nuking me.

Faced with my dismay, much flapping resulted. No, no, they assured me, they had misspoken. How could they make it good? I told them that I wanted them to cover our expences that resulted from their lack of quality control. And I wanted on-site technical support and rapid access to spares for any deployments in the future. They quickly agreed.

As I was about to head back to the airport, the executives mentioned that my selection of their company as a supplier had been a good one. After all, because we had relied on them so often, my staff had been able to rectify the configuration problem on their own and that was a sign of strength in our relationship. "It has taken us a while working together to get to this point, but your staff really knows our product, almost as well as we do."

I wasn't sure if I was supposed to take comfort in this, and pondered just what they were telling me all the way to the airport. Only after take-off did it hit me. Their real message was that a change in equipment suppliers would carry a significant cost for my company. In fact, my senior management and my company's shareholders probably wouldn't like such a decision very much. Was I a captive client to this supplier? I needed another vendor relationship management strategy. This one wasn't working.

Vendor Relationship Management 101

At this point, it became obvious to me that the problem was that we weren't dealing with our IT vendors professionally. Oh, we were all professionals and we behaved professionally. But my people were proficient in their various areas of IT expertise, they were not expert at procuring services and designing contracts.

We used the total cost of ownership (TCO) methodology for selecting and acquiring all services, software and equipment suppliers, but we weren't strategically very good at it despite having undergone training. It wasn't possible for my people to gain enough experience with this type of analysis to do it really well. The depth of analysis varied from manager to manager, dependent on the amount of time available to them and the product or service being assessed. And an important factor was that my staff's performance wasn't measured on the quality of their vendor selection outcomes.

What we needed was a group of professionals who were dedicated to the task of contracting with vendors and working with them full time. They would not be distracted by other duties, and their performance would be judged entirely on their ability to achieve success in our vendor relations. In short, I needed a dedicated IT vendor relationship management (VRM) unit employing professionals adept at devising technical contracts, analysing TCO and evaluating vendor performance.