Dealing With Vendors AFTER You’ve Signed The Deal

by drjim on February 10, 2010

Getting Married To A Vendor Is Just The Beginning…

Getting Married To A Vendor Is Just The Beginning…

When you become CIO, vendors will enter your life and they just won’t leave. What this means is that they’ll be a constant pain in your neck, always wanting your time and attention. However, on the flip side, they will be a valuable resource that can provide you and your team with information and guidance that you couldn’t get anywhere else. Don’t do what too many new CIOs do and stop talking with vendors after the deal is signed…

What’s In The Relationship For You

CIOs always have the same problem: they are being asked to do more and more with the same amount of resources and funding. The challenge is to do an inventory of what tools and talents you have available to you and then find ways to use those to perform the tasks that the company needs you to do.

One way to do this is to find new ways of using more fully the hardware, software, and services that the firm has already bought. As smart as your IT team is, there is no way that they can know all of the ins and outs of every IT tool that the department is currently using.

Ericka Chickowski over at CIO Insight points out that this is where your vendors come in. Assuming that you didn’t burn your bridges with your vendors during the negotiation process, they can be a fantastic resource for you to draw on. Often new CIOs spend too much time looking only inside of the IT department and don’t take the time to look outside in order to uncover this set of hidden resources.

How To Manage Your IT Vendors For Maximum Benefit

As your company’s CIO, you will ultimately be responsible for controlling how your firm interacts with its IT vendors. You may not be part of every negotiation, but you certainly will end up living with the results. With that in mind, here are six things that you’ll have to do as the CIO in order to get the most out of your IT vendor relationships:

  1. One Cook To Run The Kitchen: those IT vendors are sly guys. They know that when they are dealing with inexperienced CIOs that they can always talk to other parts of the company if they don’t like how things are going with the IT team. You need to step up and put your foot down both inside and outside of the company – let everyone know that you are the one who will ultimately be making the decision and nobody else. This will force your vendors to deal with you.
  2. Banish Confusion: I can’t tell you how many times I’ve seen this issue sink what could have been a great vendor relationship: when the IT department doesn’t know what they really want. This is pretty simple right: if you don’t know what you want, then there is no way that you’re going to be able to tell the vendor what you want to buy. When this happens, the post deal relationship always seems to go poorly because nobody is happy – you’re not happy with what you got and the vendor isn’t happy because you’re not happy.
  3. It’s NOT All About Price: I think that it’s only the government that still sticks to the rule that they’ll always buy from the lowest price vendor. Yes, the up front price of whatever you are buying is important However, the cost of owning or using the product or tool over the lifetime that your company will use it is what really counts. The CIO who can step back and determine what the true cost of a product is can make good negotiating decisions. Once again, choosing wisely will help you to have a good long-term relationship with your vendor.
  4. Boxing Yourself In: One of the popular trends in IT these days is to reduce the number of suppliers that the firm is dealing with. This can have many benefits like being able to get greater discounts because you buy more from one supplier; however, there is also a dark side. You can easily get trapped into having to go along with what a vendor proposes if you’ve become too reliant on them. In order to have a healthy relationship with your vendor after the deal is struck, make sure that you keep your vendor options open.
  5. Forget The Little Guys: Which vendors should you spend your time dealing with – the big guys or the little guys. We generally tend to favor the big guys, they do a slicker job. However, it’s the smaller vendors who can more easily provide the customized services that you’ll need as the CIO and they are the ones who will be willing to work more closely with your team after the deal is done.
  6. The Contract Is Just The Start: CIOs who are just starting out often don’t realize that after all of the effort that went into defining and signing the contract, the real work is only starting after everything has been signed. It’s how you manage the day-to-day relationship with the vendor that you’ve selected that will really control how much value the company gets out of that contract.

What All Of This Means For You

All too often when new CIOs step into their position, they can get caught up in all of the internal issues that are always ongoing. However, if they do this, they may be missing one of the biggest “free” resources that they have available to them – their existing IT vendors.

The vendors know their products better than anyone else on the IT team and they have the experience with other IT departments in understanding how the tools can be used to solve real business problems. You’ll need to be careful how you choose to deal with them, but they are a great resource in these cash strapped times.

Taking the time to realize that selecting a vendor and entering into a contract with them is very much like a marriage is what a new CIO needs to do. Sure the wedding is fun, but you need to realize that you are in it for the long haul and just like every other part of your CIO job, you’re going to have to work at it in order to make it successful…

Do you think that your vendors would be willing to work more closely with you if you asked them to?

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What We’ll Be Talking About Next Time

You and I both know that a well run IT department is what can make one company more successful than its competitors. That must mean that the IT department is important, and therefore the CIO must also be important, right? If that’s true, then why are some of the really big companies like News Corp, Harrah’s, ConocoPhillips, etc. getting rid of their CIO and then choosing to not replace him / her? What are they thinking?

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