I’ve spent most of my career as a service provider, but I’ve also been on the other side of the equation, helping IT leaders through vendor
evaluations and selections. Being part of the IT procurement process has been
interesting, especially as both parties to IT purchasing transactions often wax
poetic about partnerships and “win-win” situations, then beat each other up
over tiny minute pricing adjustments or esoteric contract terms.

Bullying yourself

Most companies that have been delivering IT services for
more than a few years have been exposed to all manner of customers and can
quickly determine how serious a potential customer is and how difficult they’ll
be to deal with should a contract be consummated. The worst customers seem to
take a paradoxical pleasure in bullying their vendors during the procurement
process, doing everything from demanding book-length request for proposal (RFP) responses to taking
months to pay invoices while demanding instantaneous responses.

The problem with treating your vendors poorly is that it
teaches them to assume the worst when dealing with you, the customer. An
unreasonably complex procurement process brings in pages of legalese and
lawyers lurking whenever something threatens to go wrong, and repeatedly
beating up your vendors for every possible pricing break may trigger billing
surcharges for every minor scope change or extra bit of help.

It’s equally dangerous to treat vendors with kid gloves,
glibly approving every change order and happily agreeing to the list price for
every bit of software. While most vendors won’t consciously take advantage of
an overly agreeable customer, they may create a situation in which the
consultants and vendors are effectively running the IT shop. Even the best
vendors have interests that are sometimes divergent from your own. A software
vendor sees many business problems through the lens of their software
portfolio, and the average consultant sees each problem as a candidate for
their favorite methodology or process improvement framework when the best solution
may be neither of these. At the end of the day, punishing or coddling your
vendors affects you and your organization.

The happy medium

The key to any successful vendor relationship is recognizing
what type of partner you need for a particular problem and finding one who can
operate successfully in that environment. While a procurement-driven process
might be appropriate for a massive commodity purchase, it will be less
successful if you’re seeking coaching for your leadership team. Similarly, if
you truly need to create a partnership-style relationship vs. a
customer/vendor relationship, you’ll ideally have very different payment
structures and benchmarks that split risk and also share rewards.

Also realize that during the vendor selection process, the vendor
is often evaluating you just as closely as you’re evaluating them. Behaviors
that you exhibit will be reflected in the offer presented by your vendor — in the
most extreme cases causing some vendors to refuse to do
business with you. Organizations that treat vendors fairly and respond to the
commitments they expect vendors to follow are often treated respectfully (and
given better offer terms).

At the end of the day, the best rule to apply to
establishing relationships with vendors is the golden one: treat your vendors
as you’d like them to treat you.