It sounds simple, but end-users just don’t get it — vendors are there to make a profit. At the Gartner Symposium in Sydney last week, analyst Craig Baty said users are from Pluto and vendors are from Mercury.
“They both view the IT ecosystem very differently. Users think about their own environments, but vendors live in a much more complex world of shifting partnerships where they have to supply and meet a customer’s needs.”
Baty says users and vendors have a very different world view but the end-goal is the same. It’s all about profits, so there’s no such thing as great discounts. Customers may get a good deal on software licences but vendors have to make their margins somewhere.
“Sure you will get the discount but then the vendor will put in onerous agreements to make up the difference by introducing some very complex maintenance clauses to cover their costs,” Baty says.
“Make sure you get them to map out any discounts,” he says.
“They’re not trying to rip you off but they have to make a profit.”
Baty says customers need to understand the vendor’s business model. He also suggests finding the right balance between trust and control so that long-term deals are based on solid relationships.
Also when putting out a tender make sure it is attractive to a broad range of vendors and includes the incumbent.
“Vendor relationships are like marriages — once you are married you must keep talking and communicating,” he says.
“Keep up the dinners, the dialogue and get to know people behind the scenes. Keep the marriage working.”
Users often find out more about the vendors they aren’t using — because they’re pitching for business — than they do about their current suppliers, he says.
Baty says it’s important to involve the vendor in planning cycles. A good way to ensure you get the most out of a vendor is to offer to be a reference site, he says.
“They love reference sites, so volunteer to become one as this is worth gold.”
“They’re not going to let you down once you’re a reference site — they’ll make sure you’re looked after.”
Craig Baty’s tips on vendor relations:
- Allow the vendor to make enough money
- Understand the vendor’s business model
- Balance trust and control
- Agree in advance what ‘successful installation, delivery and service’ looks like
- Understand the vendor’s request for proposal (RFP) process
- Establish strong communication protocols
- Involve the vendor in your planning cycles and business review