by Mark Patterson, ITworld - All companies rely on relationships with vendors to do business. Businesses need supplies, materials, and services to deliver their own products and services. IT organizations within companies are no different. In fact, given the recent trends in Software as a Service, cloud computing, and the relentless march toward IT outsourcing, IT is becoming even more dependent on vendors.
If you perform an Internet search for "vendor selection" you will find a number of how-to guides to perform a formal selection -- get requirements, develop RFP, etc. This is all good from a process perspective, but there are two main criteria your vendors must meet over and above anything else:
1. They must have excellent products.
2. They must have exceptional support for their products.
Most companies doing vendor selections focus primarily on the first criterion. After all, that's why the company is working with the vendor in the first place: to fulfill a business need.
But, addressing the immediate business need is only part of the solution. A very important question that must be addressed is: What happens when it breaks? What will the vendor do then? As I have noted in my last tip, change is a constant. Like the human body, IT infrastructure changes virtually everything every seven years (or less). Hardware is the most obvious thing that breaks – you lose a disk drive, or a memory stick fails. But, software fails as well.
Changes in regulations, changes in the business, changes in operating systems all affect software solutions. Even though the Microsoft Word MS/DOS version has not changed and will still run on a very old PC, it is obsolete – it is broken as far as the current world is concerned. More realistically, your ERP package needs to be able to handle updated Federal requirements, and updated accounting standards.
Because of this ever-changing sea of requirements, your average IT department is constantly working to keep things functioning and current. Your vendors must be with you on this, or you end up having to support their products yourself. Supporting a vendor's product is an incredible waste of resources and money.
As an example, suppose you are looking to refresh your server hardware. To make this easy, let's say you are running a large database grid and your servers are approaching end-of-life, and you are going to replace them one-for-one. You are not currently wedded to any particular hardware vendor – you want servers that will do the job and be well supported.
Most servers you buy from the major vendors will be able to fill the bill. The main question is what operating systems you are running, which helps determine the processor to use, primarily. All other specs are common between brands, for the most part.
The question, then, is: What happens when it fails? What happens when a drive fails? When a back plane fails? Who do you call? Who, if anyone, shows up to fix it? How long is it supposed to take? How long does it really take?
When you call the vendor, who answers the phone? Is it a well-informed employee of the company who knows their products cold and who knows your company's configuration? Or is it some outfit the vendor outsourced their support to, who walks you through tedious canned question-and-response scripts? The time to find out is not when there is a smoking hole in your server room.
You may have five vendors with five server specs that meet your technical requirements. The one that wins must be the one that will be a legitimate ally in the trenches.
This is just as true with software and services vendors. What is the software's upgrade policy? How do they support you when a bug happens? Are you forced to hunt around their web site to no avail, or can you actually call someone?
For professional software and equipment, you will need to pay for support and maintenance. Do it – it is a cost of business.
If you are dealing with a new vendor, how do you know if they are reliable? Here are a few things you can do:
1. Ask for and call references from the vendor. Ask about reliability, response time to problems. Ask about how they overcame any performance issues. This last question assumes there were performance issues – if there weren't, I am sure the reference will tell you so. If there were, the question sidesteps the question "were there performances issues?" that a reference would probably automatically answer "no" to.
2. Ask your peers about the vendor, and their experiences. Ask on networking forums, such as LinkedIn. A bad reputation travels fast, and your colleagues should give you the "straight dope."
3. Look in the trade journals and web sites for reviews and discussions concerning the vendor.
4. Ask for their financials. All your vendors should be financially viable, Financially strained vendors will sometimes cut corners, and you don't want them cutting yours.
There are serious costs to choosing a non-performing vendor, so do your due diligence and minimize the risk.
The key takeaway here is that you are buying two things when you buy from a vendor: their product, and their ability to support their product. Do not neglect the support!
For more vendor management tips, see
- How to Protect Your Company from Vendors Who Don't Deliver
- How to Sever Bad Vendor Relationships
- Introduction to Vendor Management
- Tips to Create a Recession-Proof ERP Vendor Strategy