CXO

Some do's and don'ts for selecting the best vendor

The success of any project depends on choosing the right vendor. Two seasoned pros offer their suggestions for handpicking the vendor you need from the glut of vendors who want your business.


You just won a hard-fought battle to secure the line item for new systems in your company's existing network infrastructure. Now you're about to leap into the fray of competing vendors, all of whom say they are the right one to provide the new systems, integrate them into your network, and provide support down the road. The success of this project—and how it reflects back on you—could well depend on choosing the right vendor.

Like any other battle, the struggle over choosing a vendor shouldn't be entered into without a strategy. George Kondrach, an executive vice president of Innodata, a content services firm whose clients include IBM, McGraw-Hill, and LexisNexis, says he sees a lot of ways that technical executives try to limit the field. Some ways of winnowing down the vendors to the right one are better than others, Kondrach said.

As a vendor representative, Ian Jarman, IBM's eServeriSeries product marketing manager, said the greatest mistake he sees is "looking at the vendor from the bottom up." For instance, deciding on a vendor based on one criterion, such as the processor speed of the system or systems they offer to provide. This is a very poor practice, Jarman said. "You may be missing the bigger picture," he explained. "You need to know if the vendor can support everything you need in your business."

Kondrach'slist of don'ts include:
  • Don't shop by price: When it comes to vendors, customers often get exactly what they pay for.
  • Don't shop for pleasing answers: If a vendor doesn't see any problems and if a vendor says it will be done smoothly, then run, don't walk, away. If they aren't going to communicate problems with you now, they won't later, Kondrach said.
  • Don't go back if they accept "no" right away: These are vendors with "the almost Zen-like acceptance of being told no," Kondrach said. These vendors believe anyone who tells them "no" will realize later how badly they need them and will come crawling back. "It's the attitude of 'they'll be back,'" Kondrach said. Don't go back, crawling or otherwise.

Jarman and Kondrach's list of do's for narrowing down the vendors and choosing the right one is much longer, but all the items on this list center around a best practice, which Jarman described as finding a vendor "with more breadth." If you find the vendor with "breadth," then you'll have the one who can provide the plan, product, implementation, and support you need to make your project a success. To find a vendor with breadth, Jarman and Kondrach recommend looking for the following qualities:

(1) Understanding of your overall business strategy
For a vendor to understand your overall business strategy, you have to have one. In other words, don't go shopping for a vendor for each job, such as adding a file system to an existing network. "Don't buy something that is cheaper today," Jarman said. "We don't do that at home. We don't look for a refrigerator that is cheaper today. We look for something that's going to last."

Jarman recalled one client who built systems from spare parts and added them, hodgepodge, into the existing network with no clear idea of the network's goals. "Some of these things can end up costing you more," he said. "Having a consistent strategy is always a good idea." It's usually a better idea to work with a vendor who already knows—and may even have set up—the existing network. This way, the IT manager is working with a vendor with whom he or she has an established relationship and who already understands the department's overall goals and strategies.

(2) Depth
"Don't buy services from someone who is dependent on one person to get a job done," Kondrach said. "If there is no redundancy in a given area, you might as well go out and hire an individual to do the same job for a lot less." The risks, Kondrach said, would be the same.

In particular, avoid a vendor who says so-and-so will be in charge of a project and gravitate towards those who have more than one person. This means if one person isn't available, someone else will be able to fill in.

(3) Employees aren't too stressed
You want to be sure the vendor's employees aren't stretched too thin, Kondrach said. Many vendors hire good people but set unrealistically high "billable times" for them to reach. "They want people billable 90 percent of the time, even 100 percent of the time," he said. "Which means their people don't have any time—except maybe their own personal time—to sit back and think about what they're doing and to learn new skills.

"A lot of IT companies have burned out a lot of good people by forcing revenue out of them." This can lead to constant employee turnover rates—something else to watch for, and avoid, in prospective vendors.

(4) Problem-solving skills
"Anyone can do a good job if everything goes smoothly all the time," Kondrach said. "What you want to know is how these people will take care of problems when they crop up."

Kondrach likened this skill to going on safari "looking for big game" and hiring the most qualified guide. "Anyone can go into the jungle with a rifle," he said. "How many can come back alive and bring the game with them?"

Determining how well a vendor will solve problems on your project isn't easy. After all, any vendor will tell you it has excellent problem-solving skills. Kondrach suggests a few questions to ask prospective vendors that will help you determine how well they really deal with problems:
  • "What are some problems you've seen in similar projects in the past?"
  • "How did you deal with those problems?"
  • "Did you finish that project on time?"
  • "Did you finish that project on budget?"

(5) Staying power
"Think about the Yugo," Kondrach said, the much maligned discount automobile from the former Yugoslavia that was last imported to the United States in 1992. While many people bought the Yugo when it was first introduced, it now is almost impossible to get service for the vehicle. A better idea for these car buyers would have been to buy a vehicle from an established dealer, Kondrach said.

Applying the same principle to an IT vendor can be tough because the industry is still relatively young. Kondrach recommends looking for vendors who've been around a few years and score high in other ways as well.

However, even a vendor who's been around a few years may show signs of slipping, Kondrach warned. Avoid anyone "full of tech babble" who offers a plan "jotted down on a napkin," even if the strategy seems sound, he said. "These IT battles aren't won just because someone has a good strategy," Kondrach said. "They're won because someone was able to deliver on that strategy."

(6) Adaptability
In a vendor, this means being able to adjust to the changing environment in which the project operates. "What you don't want is someone doing what they're told to do, just because it's in the specs," Kondrach said. "What you do want are vendors who think beyond their assignment."

For instance, once a project is underway, if the vendor discovers a new technology that would be well suited to the project, that vendor should be able to change course. A vendor you should keep would be the one who will bring that technology to your attention and know how to implement it into the existing plan and your overall strategy. The vendor to pass by would be the one who will pass the new technology by because it isn't in the specs, Kondrach said.

(7) A good match
"People tend to gravitate to vendors who appeal to their internal value system," Kondrach explained. Finding that right vendor can be tough, especially for customers who are used to selecting vendors based on the lunch they bought them or the T-shirts they provide.

However, the last project's good match may not be a good match this time. Make sure to match the vendor, not just to the company, but also to the project.

(8) Check support agreements
One way to narrow down the vendors is to deal only with those who have acceptable support policies, something that will be very important should something break down. "So ask about support," Jarman said. "Is their support going to be next day or can they deliver 7x24? That's going to be critical, whether you're talking about hardware or software."

(9) Know your upgrade options
Jarman said his franchise has 210,000 customers worldwide who have iSeries and AS400 systems deployed. "These customers are very interested in upgrading their machines," Jarman said. And well they should be. The network installed today will be out of date in a few years.

"This is why you need to have a three-to-five-year outlook," Jarman said. "Of course, everyone will say you can upgrade your hardware and software, but the simplicity of that statement and how accurate it is will vary widely, depending on the service or vendor you're talking about." The forward-thinking IT manager will have an understanding and relationship only with vendors who also are looking ahead and will be ready to upgrade systems as soon as the department is ready.

(10) Keep it simple
Look for vendors who offer scalable solutions and "the best of breed" in every technology, Jarman recommended. Doing the opposite can create confusion on the network and drive up the number of vendors. "If you do that, you probably are going to end up with multiple technologies, and you'll have to deal with multiple vendors," Jarman said.

"And that's OK if you understand all of those different technologies. But that's not the simplest way to get to the simplest solution."

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