8 Ways to Build Stronger Vendor Partnerships

As IT continues to outsource more applications to vendors, it’s time to rethink vendor relationships and turn them into stronger partnerships.

Mary E. Shacklett, President of Transworld Data

February 8, 2022

4 Min Read
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Prostock-studio via Adobe Stock

Companies increasingly rely on vendors to deliver IT products and services. This makes it crucial that third-party vendors become strong business partners, feel your pain, and work with you to deliver the best IT possible for your company.

Doing this isn't always easy.

Vendors tend to put their best people on your account when they're trying to gain your business and are onboarding you. Then after you are safely in the fold and locked into a contract, you get shifted to another vendor representative and service begins to fall off. In other cases, your primary vendor gets acquired by another vendor. Vendor mergers and acquisitions also mean that service levels from the vendor usually fall off.

Both events seem unpredictable and uncontrollable -- or are they?

Here are eight keys to building strong vendor relationships:

1. Always seek outstanding front-line support

Before you sign a contract with your vendor, reserve the right to interview and participate in the selection of vendor account representatives and service support. Ideally, you should have an opportunity to meet the individuals who will help you with your install and then be your regular account and service “point people” after you are implemented. In an addendum to your contract, the right to accept and reject account and service representatives should be in writing.

2. Communicate regularly with the vendor

Vendor communications should be occurring at least weekly so your organization can review daily performance, projects, etc., that you are undertaking with the vendor. This keeps your organization on the vendor’s radar, and you are more likely to receive prompt vendor attention when issues arise. As part of vendor communications, you should also have an understanding with the vendor of how issues should be escalated in the vendor organization if they can't be resolved quickly.

3. Actively participate in vendor client organizations

Third party vendors make decisions about service and product enhancements based upon what their clients tell them that they want. If you want to ensure that future vendor investments into products and services remain aligned with your own organization’s goals, you should make it a point to participate regularly in vendor panels, user groups, conferences, and forums. This gives you a voice and an opportunity to propose enhancements to vendor products and services that will benefit your organization.

4. Define and revisit SLAs

Service level agreements (SLAs) for performance, security, support, etc., should be clearly agreed upon and documented with vendors. More than likely, this will require an addendum to the standard vendor contract. It should also be agreed to and in writing that SLAs will be reviewed for performance and if necessary, adjusted between you and your vendor on an annual basis.

5. Address deconversion at the time that you negotiate your contract

No one likes the idea of having to leave a vendor, but if it becomes necessary and you want to move on to someone else, having something in writing matters. Why? Because vendors don’t like to lose business to competitors. The “losing” vendor can often drag its feet when a deconversion (and cooperation with the new vendor) are needed for you to make your move. To avoid situations like this, you should address the possibility of deconversion and develop a written SLA in your initial contract with the vendor.

6. Request visibility of vendor IT audits on an annual basis

If you are outsourcing critical IT to a vendor, you want to ensure that the vendor’s security and governance practices are in alignment with your own. A good way to do this is to include regular reviews of vendor IT audits as a part of your contractual SLAs. If you encounter a vendor that hasn't had an IT audit in the last 18 months, it might be time to consider another vendor.

7. Agree with your vendor on hiring practices

It’s not uncommon for vendors to poach key people form their client organizations, especially when those people possess unique knowledge about a certain industry vertical that the vendor wants. Conversely, clients like to poach vendor support and applications personnel who can edify their organizational knowledge bases.

Employees have the right to seek employment where they wish, but it's still a good idea to have an understanding with your vendor if personnel move between your organizations. Often, this takes the shape of the hiring company paying a finder’s fee to the company losing the employee.

8. Protect yourself from vendor mergers and acquisitions

There have been several instances during my IT career when excellent vendors were acquired by larger vendors and service levels immediately dropped. We had protection, because we always had a clause in our contract that if there were a change of management control with the vendor, we would have the right to void the contract.

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About the Author(s)

Mary E. Shacklett

President of Transworld Data

Mary E. Shacklett is an internationally recognized technology commentator and President of Transworld Data, a marketing and technology services firm. Prior to founding her own company, she was Vice President of Product Research and Software Development for Summit Information Systems, a computer software company; and Vice President of Strategic Planning and Technology at FSI International, a multinational manufacturer in the semiconductor industry.

Mary has business experience in Europe, Japan, and the Pacific Rim. She has a BS degree from the University of Wisconsin and an MA from the University of Southern California, where she taught for several years. She is listed in Who's Who Worldwide and in Who's Who in the Computer Industry.

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