Whether you are working in a complete custom software development shop with little vendor interaction or a technology integration shop with vendor solutions integrated with other vendor solutions on top of yet other vendor solutions, you will have to manage vendor relationships to some degree as an IT manager in a MidWestern company. This series looks at the complex arena of IT vendor management and offers some tips to make the arduous process a bit less arduous and possibly discover some additional benefits along the way.
As I reflect on the topic of vendor management, I tried to break down vendor management into subcategories. For each subcategory below, I plan to dedicate an article or two to drill down into the nuances I’ve come across, what techniques worked for me and what didn’t turn out so well:
Vendor Management Categories
- Who Owns the Relationship
- Vendor Service Integration Challenges
- Role of the Sales Rep.
- Sales Cycle and Pricing
- How to Leverage Tech Support
- Product Versioning and the Upgrade Cycle
- Cost of Swapping versus Maintaining
- Product Selection/Feature Evaluation
- Being a Strategic Customer
Why spend so much time covering this topic? Don’t MidWestern companies pay decent money to vendors for technology they can install, get the features they need cheaper and more robustly than building themselves and pay a monthly/yearly fee for this great benefit without further worry? Well, technically, on paper, yes, but in my experience, it has never worked out so simply.
As a typical IT manager in a MidWestern company that primarily leverages IT for operational efficiency gains rather than direct core technical product offerings (see this article for more on this IT conceptual nuance), there are plenty of business cases that tip the build versus buy decision towards the buy. If the business case says buy, then buy means vendor. And believe me, the minute you start asking the “hey, does someone make a technology product that does X” question, there will be thirty if not forty different vendors all clamoring to sell you on their product that does X and for the cheapest price you can find anywhere. Now nailing down that price is quite a challenge, but more on that aspect in a future article.
A point of clarification when I say “vendor” and “buy” what I am referring to is more directly the aspect of purchasing a software or infrastructure technology that you and your team have some hand in installing, configuring and/or supporting it’s operations going forward. An example would be database products from companies such as IBM, Oracle or Microsoft. You are clearly looking to leverage the expertise these companies have invested in their product over the years rather than build your own database solution from scratch. An example of what would not fit in this category would be a vendor/product relationship where a majority if not all of the IT services are outsourced to the vendor. “Software as a Service” models would fit in this “outsourced to the vendor” category or effectively any web site that the company leverages a vendor to provide the complete business service with little to no integration or direct support from in-house IT.
Cloud computing [definition: Wikipedia] is a recently maturing technology offering that is blurring the lines a bit between, say, buying “software” and install it on your “box”. The “software” may be a portion of the overall software application that supports the business need that happens to be hosted by a third party both in terms of the platform as well as the business logic/rules that are being executed as part of the overall business solution. The “box” may be from a logical interaction perspective the same as a server powered, networked and operating within your company’s data center but in reality, a virtual server powered in the vendor’s datacenter and connected to your company’s network via the Internet or similar arrangement. Cloud computing is rapidly gaining attention as a viable and cost effective solution to “outsourcing” more IT functionality to a vendor while continuing to maintain control over core business differentiated IT services and pushing off control of commodity/non-core business services to third parties. The concept involves moving more non-core business services “to the cloud” allowing cloud vendors to focus on up time, reliability, disaster recovery, capacity and performance at a price point lower than in-house since it is spread across all the customers of the cloud. The basic concepts of vendor management still apply to cloud environments. I encourage readers considering cloud computing to continue to evaluate the growing experiences of peers as cloud computing grows and matures from its current state.
So, let’s dive into the realm of vendor management from a MidWestern IT perspective starting with the topic of “Who Owns the Relationship?” in the next article.