CXO

Ethical dilemmas involving vendors and clients require balance and guidelines

A vendor referred a great client, and obviously expects you to put that client on its system, but the technology isn't the best choice for the client. Mike Sisco explains how to handle this ethical and strategic dilemma.


Mike Sisco, a full-time consultant and ex-CIO, provides valuable guidance on dealing with consulting issues and dilemmas. In this first installment of his consultant Q&A forum, Mike helps a TechRepublic member figure out how to deal with a tricky vendor issue. If you have a question for Mike, send it in to TechRepublic, and he’ll try to answer it in a future column.

Dilemma
As a consultant, selection of the right software package to meet my client's needs is a key responsibility. But many times, we get a client lead from the software vendor itself, which poses a dilemma: Go with that company’s package or go with the package that best fits the need.

For example, my company got a client reference from Interwoven, when we were interacting with Interwoven on a different project. When we did the initial research for the new client, we found it a fit case for Vignette. However, selecting Vignette could strain our relations with Interwoven.

As a company, we initially tried taking a neutral approach—having no relationship with any vendor—to prove to our clients that we were completely platform-neutral. However, not only did this not help us with our clients, it hurt us because we had to pay for every development license and support question to each vendor. So, we've moved to alliances. What do you think is the right approach to this dilemma?

Raja, a TechRepublic member

Answer
Your issue is something that many consultants run into, but my sense is that it's not as big an ethical issue as you may think. Let's break the example you provided down a bit and explore the dynamics surrounding your situation.

To remain "independent" and "objective" or not
One of the decisions a company has to make is whether it wants or needs to be perceived as "totally independent" in its approach to working with a client. As you mentioned, positioning yourself objectively has a cost—whether in additional vendor support cost or lost opportunities resulting from fewer or no referrals.

Neither ultimate decision—to stay on the fence and unbiased toward a vendor or to create an alliance with one or more vendors—is right or wrong. It boils down to your company's strategy for doing business.

I've seen small and large consulting companies align themselves with more than one vendor of a particular software type—for example, CRM applications. This may be a difficult balance, but it can work effectively as long as you maintain a few ethical guidelines regarding your client and the vendors.

You must keep in mind that we all have some level of prejudice or preference about most things, and when it comes to software and vendors, it's no different. It may be one little thing, such as a feature of the product or the support provided, that makes a difference for you as you judge alternatives, but something will pull your vote to one particular product or vendor, given the opportunity to choose.

Don't bite the hand that feeds you
So you get a referral from a vendor because it trusts that you can help it out in winning the sale. This help may be in the form of a validation to the client that the product will do the job, or it may be added value that you bring to the table with the consulting services you provide.

Regardless of why you were brought in, you obviously won't get more referrals if you recommend competitive products to a prospect given to you by your vendor "partner."

You need to put yourself in the referrer seat. Would you want a vendor that you recommend to a client telling your client they can get better service from your competition? You must think alliances through thoroughly, but once you enter one, consider the other party a partner.

Do for clients what you would want them to do for you
You have an obligation to provide cost-effective recommendations that benefit your client and improve the business. At the same time, remember that you probably wouldn't even have the opportunity without your vendor referral.

Unless the vendor's product is a very bad fit for the problem that the client is addressing, you have an ethical obligation to work with your vendor "partner.” If it is truly a bad fit, you need to gracefully back out of the situation and may even need to evaluate your alliance with the vendor.

You have an obligation to your company to provide ethical recommendations and to honor strategic alliances. Most of the time, an alliance is created because your company's senior management sees it as key to growing the business or remaining a viable entity in the marketplace.

Beauty is in the eyes of the beholder
All people do not view a software product or its vendor in the same way. Even so, you're obligated to work with the strategic partners your company has developed. If you think other offerings are better and provide more value for your company, make it known to your senior management team, but remember that taking a stand on such an issue when working with a new prospect is not the best time.

Also remember that a software feature/function is not necessarily the issue that makes or breaks the effective use of the product for a client.

Take a look at all the press on failed CRM and ERP implementations. Millions of dollars are spent with little or no return benefit for the companies. Unless there is a feature missing in a vendor software product that is absolutely essential for the client's needs, you need to step back and consider the following: If you're capturing the data and have the automated processes you need in a software package, an effective implementation will get you results. CRM experts, for instance, are saying more and more that the important issue is whether you collect the appropriate data and how you analyze the data, not whether you have or use all the functionality of an application. There is a lot to be said for keeping it simple.

Consider your main obligations
Your company struck an alliance with certain vendors with the hope of getting referrals just like those you've identified. Unless the vendor has no product to address the client's needs or the product it offers is a bad fit, you have an ethical obligation to work with the vendor's solution. If honoring these alliances is not in the client's best interest, speak to your management team about it. Do not speak to the client before airing it out with your management team.

I would never try to force fit a solution on a client but, many times, best solutions tend to be based on subjective criteria and not on objective issues. If you have objective issues that are truly tangible problems for your client, have a conversation with your senior management team to evaluate whether you can make the recommendation without putting the client at risk. Ultimately, you have to look the client in the eye and be comfortable with the solution you propose.

The bottom line is that we all have preferences for software products, just as we do for automobiles, for example. Driving a Chevy vs. a Ford may not be your first recommendation, but they'll both get you to the destination in relatively the same manner. Software products that address the same set of business issues are very similar.

Mike Sisco is the CEO of MDE Enterprises, an IT manager training and consulting company. For more of Mike's management insight, take a look at his IT Manager Development Series.

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