Managing Vendors

1
Managing Vendors

• Chapter 7

2
Areas of Discussion

• Dealing with Vendors
• Key Evaluation Metrics
• Getting Current Information
• Purchasing Sources
• Additional Resources

3
IT Manager Responsibilities

• Save money for your company
• Obtain the right resources
• Make projects work
• Give employees right tools
• Meet overlapping deadlines

4
Dealing with Vendors

• Establish a Relationship
• Provide lowest price
• Provide highest quality
• Do these two items all the time
• Past Experience
• Organization experience
• Personal experience
• Vendor representatives come and go quickly
• Remember this when needing to deal with the same
  company and you have had a negative experience

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Dealing with Vendors cont.

• Negotiate
• Everything is negotiable
• Research the product
• Help Your Vendors
• Put yourself in the vendors shoes
• Make sure your vendors get paid. Track invoices
• Keep your vendors happy
• Think Long Term
• Develop relationships that can help each other
• Consider service contracts

6
Dealing with Vendors cont.

• Get Multiple Bids
• If vendor encourages you NOT to obtain other
  bids, you need to look elsewhere.
• Commoditized No difference between product A
  and product B
• What should you do if your product, your market,
  your entire company gets commoditized?
• Two common problems
• What do you do if the 800-pound gorilla from
  Redmond enters your market?
• What do you do if your product becomes
  commoditized?

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Dealing with Vendors cont.

• Set Up a Trial Experience
• A couple of units at worksite
• Thirty-day trial of software
• How Well Does Each Vendor Meet Each Criterion?
• Set up a simple matrix that allows you to compare
  all of your options
• Seeing all criteria and items listed next to each
  other has tremendous value

8
Dealing with Vendors cont.

• Reviewing Contracts with Vendors
• What exactly am I agreeing to?
• How much am I actually paying?
• What exactly are my liability and rights?
• What exactly are the vendors liability and
  rights?

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Dealing with Vendors cont.

• Have Legal Counsel Review
• Issues of confidentiality
• Warranty
• Liability
• Applicable laws
• Have Legal Counsel Advise on the Following
• Any wording that they are virtually forbidding
  you to agree to
• Terms that they are uncomfortable with
• Terms that they are uncomfortable with, but
  recognize you are unlikely to get changed

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Dealing with Vendors cont.

• Terms and Conditions
• Service level guarantees
• Specifications of hardware and software
• Support, maintenance, upgrade terms
• Automatic renewals
• Ability to return/cancel if not satisfied
• Specific deliverables
• Associated costs, time frames, an so on

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Dealing with Vendors cont.

• Remember
• Whatever promises your representative told you
  are of no value unless they are in writing.
• If it is important to you, have these items
  included in the Terms and Conditions.
• Utilize your legal department. Take advantage of
  this ally.

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Dealing with Vendors cont.

• Direct Company Repsmore knowledgeable about one
  product than a VAR
• VAR Value Added Reseller who has multiple
  products
• Have better knowledge than direct company reps
  about multiple products
• Can perform additional services (for a fee)

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Key Evaluation Metrics

• Be prepared
• Benchmarks
• Other clients stories
• Do your homework about products and services

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Key Evaluation Metrics

• Set up a Matrix
• Functionality
• Price
• Performance
• Vendor viability
• Training required
• Vendor services
• Scalability
• Support and service
• Interoperability
• Speed of delivery and availability

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Key Evaluation Metrics

• Functionality
• Does this product do exactly what you need it to
  do?
• Price
• Should not be your only criterion
• Two components to evaluate on price of
  technology
• Capital investmentshort term, up-front cost of
  item
• Total cost of ownership (TCO)ongoing support,
  maintenance implementation, training,
  prerequisite hardware/software,
  conversion/migration, etc.

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Key Evaluation Metrics

• Vendor Viability
• Will this vendor be around for a while?
• Training Required
• What is required?
• Is training readily available?
• Vendors Services
• Customize product
• Assist with installation or integration

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Key Evaluation Metrics

• Performance
• Factual information regarding performance shared
  by vendor
• Scalability
• Meet the size of your environment
• Support and Service
• Treat service options or contract equally as
  important as product

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Key Evaluation Metrics

• Interoperability
• Does the product integrate well into your
  environment?
• Speed of Delivery and Availability
• You need things delivered on your schedule
• Train vendor to this way of thinking
• Sample Evaluation Matrix
• Do a weighted comparison of each vendor

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Getting Current Information

• The Web
• Whatis.com, about.com, wikipedia.com,
  webopedia.com
• Vendor representative
• Establish and reinforce a relationship
• Trade journals (electronic and print)
• Ziffdavis.com, cmp.com, idg.com
• Trade shows
• Opportunity to touch and feel products
• Thirty-day evaluation periods are quite common
• Brown bag lunches
• Informal get-togethers to discuss concerns of the
  day

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Purchasing Sources

• Web (and catalogs)
• Pros and Cons Table 7.1
• Retail stores
• Pros and Cons Table 7.2
• Gray markets
• Gray market goods are brand name items sold
  outside of the producers official distribution
  channels. Do not contain warranty, service, and
  support.
• Dollar costsproduct costs more for repairs
  because of no warranty at time of purchase
• Legal costsdifficult to pursue
• VARsspecific product and service

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Summary Slide

• IT Manager Responsibilities
• Dealing with Vendors
• Key Evaluation Metrics
• Getting Current Information
• Purchasing Sources