Advice Line | Bob Lewis » Vendor relationship management concerns

December 19, 2007 | Comments: (0)

Vendor relationship management concerns

TAGS: General

Dear Bob ...

You may have already entertained this topic but I have not seen it. It has to do with the ugly reality of vested interests and marginal or even improper relationships, usually with vendors.

As a consultant who has seen it many, many times around the world I think of it as "Listen To Me..........Not."

It involves cases like a CIO, along with his SEVP, who declared to the IT Steering Committee "We are not getting value out of our storage arrangement. With this next major purchase we should put pressure on our supplier by testing if someone else can do it better and for less." After 3 major vendors worked many hours into many nights given the prospect of displacing a competitor at a major customer site and, in fact, all put forth significantly better offers, it came out that the 2 executives met privately with the CIO and awarded the deal to the incumbent who only moved slightly from their previous commercial arrangement. Rationale not provided.

In other "integrity" situations I see sporting event tickets, "training" trips, etc. routinely impact the vendor decision process, manifesting itself as clear bias in evaluations, refusals to attend presentations by competitors, etc. We don't even want to go into internal alliances and politics beyond observing that much more of it appears to me to be top-down while vendor involved shades of gray and black seem to exist top down (executive fiat) and bottom up (technical bias), squeezing the middle and upper-middle management teams who so often are the ones seeking to improve effectiveness.

Bob, I am not on any kind or moral march here. My interest in the topic is the degree to which these types of actions prevent the IT organization from reaching its potential. I believe vested interests would easily make the top 3 of reasons why IT organizations underperform. Fortunately, there are some process changes that can impact/improve the integrity of the decision process. The rest, however, is achieved through imparting values and setting expectations for the openness and thoroughness of decision processes.

I would appreciate your thoughts as to whether you see this as a significant issue.

- Conflicted about interests

Dear Conflicted ...

It's been a long time since I've talked about this sort of thing, and even when I did hit it, it wasn't from this angle. I think you're talking about a few subjects, in fact.

One is companies taking advantage of vendors by issuing phony RFPs or RFIs when they have no intention of actually buying. I've donated a few free ideas to non-clients that way. I've also had prospects solicit a stream of expensive meals in the name of relationship building, when in fact they had no intention of buying either.

Asking prospective vendors to jump through a few hoops isn't all that bad an idea. Choosing a strategic vendor and implementing its solutions entails serious risk. Proper due diligence is simply prudent. Asking non-prospective vendors to donate free advice is an entirely different matter.

A second, related subject is getting into bed with a particular vendor. This isn't necessarily wrong … given what it takes to make major changes to IT architecture, strong relationships with strategic providers make all sorts of sense. IT execs cross the line when the relationship stops being businesslike and starts turning into obligatory perks. Whether solicited by a client or encouraged by a vendor, it generates conflicts of interest and is bad business.

As is always the case, balance is everything. If I want an hour of your time over lunch, I should pick up the check. That's simply good manners.

And, I should choose a restaurant that doesn't charge so much that my picking up the check gives you a conflict of interest. I figure if your lunch tab is $20 and that influences your buying decisions, there's something seriously wrong with your bank account. If your lunch tab is $75, I've chosen the wrong place to eat.

Whether this hits the top-three list of reasons IT doesn't reach its potential is questionable, given the number of potential reasons that compete with it.

But if for no other reasons than how demoralizing it is for IT staff to see their supposed leaders behaving like this, and how easy it is to avoid the problem ... there's really no reason for the issue to ever come up, other than IT's leaders never stopping to reflect for a moment as to whether it's a good idea.

- Bob

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Posted by Bob Lewis on December 19, 2007 07:24 AM

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