Entrenched Vendor = It is hard to compete with "free"

Entrenched Vendor = It is hard to compete with "free"

I was having a conversation with someone that was utterly frustrated with the vendor selection process for a new technology product in a large corporate IT shop. The product was to address an IT specific need rather than a business unit need. In this individual’s mind, the choice was clear: Vendor X’s product. She couldn’t fathom why the choice wasn’t obvious to all the other stakeholders participating in the solution process. From her mi-optic viewpoint, Vendor X’s product meets her perception of the need and thus why all the gesticulation around alternative products in the mix?

Sure, the textbook approach to technology vendor selection seems pretty straight forward. Most would agree to start by documenting the business case (the need) and requirements (the what). Next, conduct an RFI/RFP to narrow down the vendor landscape to a few products (the how). Finally, conduct some proof of concept implementations with clear success criteria involving all stakeholders, score the results, finalize the business case and a clear and obvious winner will emerge and be embraced by the organization. Rarely, if ever, does the selection process proceed this scientifically in any moderate to large corporate IT shop. I did my best to explain to this individual the illogical nuances or hurdles that derail the most straight forward and seemingly logical technology selection process.

Hurdle #1 = Entrenched Vendor

One of the first challenges of considering any new technology is:

Does a vendor you are already using have a solution?

This may seem obvious to anyone reading this article but you might be surprised at how many large corporate IT organizations don’t have a transparent way across all teams to know what already exists. This challenge exists both in implemented products as well as owned or licensed but not yet deployed products. One of the most confusing can be the “enterprise license agreement”. Also called an ELA, an ELA represents some pre-agreed upon pricing structure where a whole buffet of vendor products are able to be used for “free” or with heavy discounts. If a new capability is needed and an ELA exists with a vendor, you might be able to start using that new capability immediately.

Sounds simple, right? Just make a master list of everything the company owns or has a license to use. So, why is this considered “hurdle #1”?

Well, if you need a new capability and an existing vendor has it, for a reasonable price (or “free” via ELA) and all stakeholders agree it fits the need, fits the technology support structure, etc., congratulations, smooth sailing.

But what is exceedingly more challenging and thus worthy of the “hurdle” reference is when an existing vendor has a product for the need but various stakeholders don’t agree it is the right fit.

I have observed the later easily ten fold more than the former.

Compared to other reasons stakeholders might not agree on fit (which will be addressed in subsequent articles), the universal feature gap is the least challenging. The need has been described and (hopefully) documented in a non-emotional context to a degree that makes it obvious the existing vendor’s product isn’t a good fit. “Hey, we need the product to do X and ABC’s Vendor product we own but haven’t deployed doesn’t do X”.

Vendors that are considered to be “strategic” or “strong technology partners” tend to have an effective means of access to top IT executives. If they hear of a need/product overlap and don’t feel they got fair consideration, all it takes is the vendor to tap into that access to create a whole mess for those tactically trying to find the best solution.

IT Executive: “Hey, I know we are looking for a product to solve X. Our partner ABC Vendor says they have it and we can easily use it. I agreed to a proof-of-concept starting next week.”

Now everyone has to participate in this executive “suggested” POC rather than reached out prior to the vendor or the executive in order to head off this undesired body of work with an already known lack-o-fit outcome.

Additionally, make sure you get a good handle on the history of exiting vendors you might be prepared to rule out. Does your company use any of the vendor’s components in your products? This is most prevalent in the manufacturing sector where the buyer and supplier lines can cross. Does the vendor do other business with your company such as hold a line of credit or use any of the company’s leasing services? Both come into play heavily in the financial services space. Is one executive related to a vendors executive? I once was aware of a relationship between a member of the board of directors of the company I worked who owned a small commercial electrical company and thus you always saw people with that logo on their shirts pulling cables in the data center.

Tip: When considering new technology that has some product overlap with an existing vendor, don’t be quick to rule out that vendor without ensuring there is truly an obvious feature to need gap as well as engaging the vendor and individuals with whom the vendor has access to be aware of any non-traditional relationships.

Next Hurdle … look for additional articles in this series for more hurdles and some tips to over come those hurdles.

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