CXO

A winning game plan for working with vendors

Veteran enterprise application sales consultant Dave Stein offers advice to senior IT strategists on how to develop and stick to a game plan when dealing with vendors.


By Dave Stein

The vendor selection process can drive any senior IT manager over the edge. Deciphering your way through a torrent of industry buzzwords, claims made in trade publications, and costly consultants can leave your head spinning. Compounding the confusion is the ever-present sales rep constantly bombarding you with a barrage of plastic-wrapped and Web-based promotional material.

Publicized disasters of failed implementations haunt every project manager tasked with enterprise application selection. Although Fortune 1000 companies have proven they have the resources to withstand botched implementations, most midsize enterprises would easily be crushed by the expense of such a disaster. How can you prepare yourself to sift through the capabilities of all the vendors? Is what your application vendor sales rep telling you the truth?

The vendor’s take
From the vendors’ point of view, life is tough. If product superiority really exists for a vendor, it is fleeting. If a vendor spends $40 million to $50 million on the development of a new solution, their competitor can create the perception of an equal or better product with nothing more than a well-spun press release. It happens every day.

It’s about your business needs, not product functionality
What about a vendor’s ability to meet your business requirements? In my experience, most of the vendors included on your long list can meet most of the requirements of any particular customer with an off-the-shelf product.

Because of this functional and technological redundancy, vendors fight—and fight hard—for differentiation, which they believe will lead them to winning evaluations. One of the ways some vendors do that is by having the salesperson create new issues during their sales campaign. Most salespeople know that if you compare them to their competitors based upon time-tested functional criteria, your decision will likely come down to price. Some salespeople try new ideas out on you, such as rapid implementation, an attractive list of application partners for a broader “footprint,” easy integration with existing applications or, in an example relevant to today’s market, trading exchanges (which they themselves may have established).

Your vendor game plan
So with all this bad news, how can you effectively make a safe decision? Have a game plan and stick to it and transform the enterprise solution provider into an effective business partner.

Here are some considerations that you would want to include in your list of decision criteria.

Make sure they always tell the truth—about everything
Although it may seem obvious, calibrate the integrity of the vendor and especially of the salesperson representing them. Do they, without exception, tell the truth? Or, in desperation for your business, do facts get replaced with what they believe you want to hear? Try random checks on your RFP. If a vendor answered “yes” to a question, but they cannot demonstrate that they can deliver that capability, show them the door.

How well do they keep their commitments?
Does your salesperson keep commitments? If they don’t do that now, what do you think will happen after you sign their contract? Do they return calls when promised? Do they summon resources when they have committed to do so?

Is your salesperson willing to say no?
There are things that responsible salespeople should just not do. Exaggerating product functionality is classic, especially when asked tough questions during demonstrations, when momentum is critical. Can that salesperson look you in the eye and say “no,” when you both know that is the correct answer? That’s integrity.

Does the sales rep understand your industry?
Weigh the salesperson’s ability and willingness to understand your industry, your company, and your specific business issues. The rep should have taken the time to research the business obstacles in your industry and offer detailed solutions to these challenges, as well as the financial impact of their product on your organization. When you are investing in a business application, there is a tremendous potential for additional value from the vendor and their experienced salesperson, implementation specialists, and business process consultants.

Scrutinize the provided references
Check data provided by previous companies thoroughly. Every salesperson has favorite customers that have developed into key references. What you want is an extensive list of companies similar to yours. Similarities should include size, geographical location, industry, technological infrastructure, and internal project management experience. If a particular vendor cannot produce enough good references, eliminate them from consideration. How many references should you check? More than the vendor initially gives you. You want to get past the fluff by going deeper than the vendor’s list of “friends.” See what happens when you ask for 50 references. Have them provide that list and then randomly call 25. If you think you don’t have time for that, think about how much time it will take to get back on track if you choose the wrong vendor.

Keep focused on your functionality requirements
Is the salesperson attempting to convince you that they can provide a key capability that you either never considered or ranked as a secondary consideration? In most cases, it means that the vendor cannot meet your necessary functionality requirements. They are attempting to alter the decision criteria to something that they do better. If you are not sure what to do, consider only looking at interesting additional capabilities from that vendor after they have proven they can meet your initial stated requirements.

Can you be business partners?
Are the vendor and sales rep culturally and philosophically aligned with you and your company? In other words, is the vendor “bleeding-edge” when your company is conservative? Do they have a high attrition rate amongst sales and service people while your company values longevity and experience? Are they known to provide complex and expensive solutions where your company has little experience with massive application implementations? What is important to the vendor? Is it winning another deal, or adding another successful customer to an already long list? What about the salesperson’s demeanor? Are they providing you with value far and above factual information about their products and services, such as insights into what trends are prevalent in your industry? Or are they constantly positioning to go over your head for more leverage?

And your final answer is…
The difference between the ultimate success and failure of your project is likely not to be related to vendor product specifications—the minor differences between one product and another. The critical factor most often comes down to this: Can and will that vendor deliver for your company what you need for your project to be successful?

After evaluating your list of potential vendors using some of the non-traditional decision criteria we suggested here, it may turn out that your final decision appears counter-intuitive. For example, you may discover that the biggest and most well-known vendors really can’t deliver as suggested by their sales reps for a company your size, or in your industry, or in your geography. You may wind up being best served by a smaller company whose expertise is focused and to whom your business is very, very important.

So during the course of your evaluation, when you meet with your vendors’ application salesperson, ask the tough questions, test them, look them in the eye, find out what they are thinking, see how deeply they think, and learn what it is that is important to them and the company they represent—your success or theirs.

Dave Stein is a recognized expert in selling and marketing enterprise software and services. Dave’s Web site is The Stein Advantage.

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