CXO

Ask these key questions to evaluate a vendor

Communication before and after you sign on the dotted line is the key to a productive vendor relationship. Here are key questions that IT managers should ask when evaluating a service provider.


Most IT managers have faced the problems created when a vendor comes up short. You may have had difficulty replacing failed hardware supplied by a vendor or felt the frustration of wrestling with an ISP.

But many vendor-related problems can be avoided if you take the time to research a provider before you sign on the dotted line. Here are the steps you should take when selecting a vendor and advice on how to nurture a productive relationship.

Planning ahead
IT managers should ask key questions before choosing a vendor, according to Peter Osborn, vice president of sales for Akibia, an independent provider of UNIX and Windows support services.

“I certainly wouldn’t pick up the Yellow Pages and try to look for a UNIX support company and just pick out a few and go get a quote,” Osborn said.

At Akibia, Osborn develops new service contracts between Akibia and companies like IBM, Sun Microsystems, and Hewlett-Packard.

Osborn said IT managers should ask themselves these questions when evaluating a vendor:
  • Is the vendor financially stable?
  • Have they been a player in the same industry for a few years?
  • Do they have a strong customer base?
  • Can you reference this customer base independently?

Osborn said communication is another key when considering a vendor. You should find out how the vendor plans to handle your service call. Will the service request be handled by a person or an answering machine? Does the vendor offer 24/7 support? If not, how will after-hours calls be handled?

Osborn said IT managers who answer “no” to even one of these questions should think twice about signing a contract. Most vendors include a service policy or service level agreement (SLA) in their contracts. Take the time to carefully review the policy. Is it clear on how problems will be handled?

Use references
Talking to other customers and clients of the vendor is the best way to get a feel for the vendor’s capabilities and how attentive they will be to your problems.

“I cannot tell you the number of clients that I have that make vendor choices [but] don’t bother to check references,” said Howard Highsmith, an independent consultant and president of the Sales Methods Corporation.

“In checking references, it is incredible what people will tell you about the company or the person,” Highsmith said.

Highsmith also suggested that you ask a vendor’s reference one key question: How accessible was the vendor during a particular project or the life of the contract?

The answer to this question can tell you a lot about how the vendor will treat your project and your business after a deal is signed, he said.

After the selection, keep it simple
Communication is the key, as long as it is coordinated communication, Osborn said, who suggested that you designate a point person or team to contact the vendor when problems arise. “As the saying goes, too many cooks spoil the broth,” Osborn said. “The same is true for your shop. Try to have as few contacts as possible.”

If you adopt the team approach, designate one member of the team to contact the vendor. This strategy can lessen the possibility of repeat calls to the vendor.

A primary contact at the vendor should also be established.

“One of the most beneficial things I have been able to get ahold of is… a full chain of command from each of my vendors,” said network administrator Kimberly Kamsickas.

Using this one-on-one strategy should keep your communications with a vendor organized and help develop a relationship between your internal point person and the vendor.

Beware of a merger
Be sure to monitor your vendor’s business activities. If your vendor merges with another vendor or outside firm, it’s possible that you may find yourself with two problem-management procedures, one for each side of the merged company.

If a merger occurs, voice your concerns about your continued need to have one vendor-side contact and one escalation procedure. You don’t want to lose your one-on-one connection that you have developed with key people.

If you do lose your contact, quickly find out who his or her replacement is and establish a relationship with the new point person.

What methods do you use?
What do you think is the most important part of a contract between your organization and a vendor? Let us know by sending us an e-mail or starting a discussion below.

 

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