Vendors and the limits of partnership

IT managers who try to embrace vendors as partners could be in for a rude awakening. Artner's Law explains why you should look before you leap onto the partnership bandwagon.

When it comes to the latest corporatespeak, I tend to be a contrarian. The more I hear about the latest buzzwords, the more suspicious I become. While I’m the first to admit IT managers could always benefit from a new perspective, I don’t want to adopt the newest trend until I’m sure it makes sense. All too often, we end up jettisoning these management concepts the minute something new comes along.

For example, take the current fashion of referring to vendors as partners. Of course, the ability to choose the right vendor is a critical skill for any technical manager. However, I’m going to argue in this column that you shouldn’t let the talk of partnership blind you to the realities of the client-customer relationship.

Vendor as partner
It’s easy to understand how all this talk of building partnerships with your vendors got started. After all, in many ways, the relationship between buyers and sellers of IT goods and services has gotten much deeper in the past decade or so. Consider the following:
  • The rise of outsourcing has expanded the number and depth of vendor relationships.
  • This same outsourcing of both IT services and hardware purchasing and maintenance has resulted in the colocation of vendor personnel and equipment in many IT organizations' offices. For many of us, the vendor isn’t across town, but across the hallway.
  • The complexity of many enterprise application implementations means that the vendor could be with you for years. If you’re currently implementing a customer relationship management (CRM) solution, you know exactly what I’m talking about. It’s like having the plumber out to your house to snake a drain and then staying for the next two years.
  • The willingness of many technology vendors to finance their equipment results in them knowing a good deal about your business, as well as your plans for the future. Especially for new and rapidly growing companies, vendor lines of credit have been absolutely critical.

These are just some of the factors driving talk of the partnership between vendor and customer. All in all, these are positive developments.

Everybody wants to get paid
So what’s the problem, you might be saying at this point. If technology departments are building closer relationships with their vendors, what’s wrong with referring to vendors as partners?
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My concern is the two words mean different things. A vendor is someone from whom you purchase goods or services. A partner is someone who shares in your business and has the same risks and rewards that you do. While the relationship between a customer and a vendor can have aspects of the relationship between two true partners, the relationships are different by their very nature.

This isn’t just semantics.

Take the whole issue of costs. To state the obvious, vendors sell things. At the end of the day, they want to get paid. Their goal is to maximize the revenue they got from their customers. And why not? That’s what we’re all in business for—to make money.

As a customer, your goal is different. You want to purchase the best possible solution for the least amount of money. While you might decide to go with the most expensive vendor for a particular product, no business can operate on the “money is no object” principle all the time.

Here’s another example. Anyone who’s had to manage an outsourcing contract eventually encounters the worthless contract employee. Even the best outsourcing firm contains its share of duds, and one of them will no doubt end up on your doorstep.

After a few minutes of conversation with the individual, it’s clear to you that he or she is grossly unqualified for the task your outsourcing firm assigned. So why did the firm send that person over?

Because it’s in the oursourcer’s economic interest to do so, is the obvious answer. During this IT labor shortage, outsourcing firms are scrambling for people just like the rest of us. The temptation to use the marginal employee can be pretty enticing in these circumstances.

Don’t be seduced
My point here is not to argue against outsourcing. Nor am I saying that you shouldn’t try to have harmonious relationships with your vendors. Of course you should. However, don’t let all the talk of vendor-client partnerships blind you to the reality that your goals are not the same, and that there may be occasions when you have to strain or sacrifice a vendor relationship for the good of your organization.
What type of relationship do you have with your vendors? Do you look at vendors as partners? Send me an e-mail or post a comment to this article.

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