A healthy vendor relationship is critical to keeping your company up and running smoothly, but it's important for tech and business leaders to recognize potential downsides.
Whether you work for a small business or a global enterprise, your IT operations rely on third-party vendors in some shape or fashion. Your tech department needs to have healthy vendor relationships for acquiring necessary hardware or software to run the company. But here's the thing about third-party vendors—they're not all created equal. I'd like to discuss the good, the bad and the ugly of corporate vendors.
The good: Your IT needs are met
Let's say your business needs to provision its staff with a computer fleet. Your hardware supplier should be able meet or exceed your hardware specifications, fill your order on time, and stay within your budget. When it's done right, and with the right vendor, it's as simple as completing an order form and waiting on delivery.
The bad: There may be a crafty up sell
Vendors are in business for profit, just like your company is. The vendor sales representative will gladly fill your order request, but you must be on the lookout for a possible up sell.
For example, say your operations require workstations to act as dumb terminals. No operating system, high resolution monitors, or superior RAM is required. Your sales rep might offer you all those options for an additional $100 per workstation. That's an outstanding price, but what if your approved budget is $10,000 and you're ordering 50 terminals at $200 per station? Adding the up sell items to your order will mean an additional $5,000 in costs—costs that weren't approved. And those costs may never be justified if your operation runs only terminal applications on the internal network.
The ugly: Support could cost you big time
Getting shiny new hardware or software for the enterprise can be a treat for your users. There's nothing like the fresh smell of a workstation or breaking in a new keyboard. Unfortunately, quality assurance isn't always "grade A." Hardware may malfunction. Software may have compatibility or security issues. Whatever the issue, you'll have to contact the vendor for support options.
Sadly, support is where many vendors make most of their profits. You can expect to be price-gouged for support. Some vendors offer a limited guarantee for a probationary period, such as 30 or 90 days. But once you're out of that probationary period, you're at the mercy of the vendor's rates. I've seen instances where support for a product ran as high as 50% to 60% of the original purchase price. This leads you into the trap of considering the purchase of another new product instead of "fixing" the current one. It's a vicious circle. It almost sounds like an up sell at this point.
Your company can't survive without solid vendor relationships. Some vendors are great; others may be less stellar. The key is to research potential vendors and establish a viable service level agreement (SLA). Signed SLAs not only establish guidelines on what the vendor is to provide for you, but they also help build a trusting relationship between you and the vendor.
Vendor pros or cons?
What has your experience been with the vendors you deal with? Share your thoughts and advice with fellow TechRepublic members.
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