This is an example of the highest form of a relationship between a customer and vendor, where the vendor suggests innovation of process or provides leading-edge breakthrough technology that enhances the customer's bottom line.
You cannot achieve innovative/breakthrough transformation if you don't have a collaborative relationship where both parties trust one another. Without trust, we could not have leveraged our collective expertise to collaborate on solutions that are cheaper, better, or faster. When the leadership of both parties collaborates on issue resolution and a root-cause analysis of problems, creative, synergistic, and out-of-the-box solutions are devised.
Vendors need to be accountable for time, costs, and quality. We require of them professionalism and expertise. They must accept responsibility for all actions by their personnel. And of course, we must hold them accountable for all of their contractual and service-level commitments.
6. Continuous Improvement
A great vendor demonstrates continuous improvement in the products and services it delivers. Hardware vendors, for example, must provide state-of-the-art technological improvements from Research and Development. All suppliers must continually provide a competitive edge. Continuous improvement can be achieved through service levels. But you must ensure that the service-level improvement is providing sufficient return on investment and not increasing fees.
The toughest part of any vendor negotiation is determining who is going to accept what amount of risk for what price. Buyers want the vendor to take on maximum risk for as little money as possible. Vendors want to assume as little risk for as many dollars as possible. What you need is for your vendors to have some skin in the game, so that they will share in the success or failure of whatever project, service, or hardware they are providing. This can be achieved by putting fees at risk in the SLA, so that a vendor that does not achieve a certain score on a KPI or SLA must reduce its fees by a certain percentage.
No relationship can be successful without good communication. Vendors need to be proactive, communicating issues and identifying potential degradation of service levels before the situation is critical. But they also need to communicate road maps, strategic direction, issue resolution, contractual obligations, and anything that enhances the relationship. When our vendors proactively communicate, it demonstrates reliability and fosters trust.
If your vendor isn't consistent, you can't anticipate its actions. We want our vendors to behave in a consistent manner that is in compliance with contractual obligations. Inconsistent behaviors produce uncertainty and distrust.
10. Cost Improvement/Containment
Improving cost and preventing cost overruns are constant challenges when managing I.T. projects. We want our vendors to maintain fiduciary responsibility. All too often, I.T. vendors provide a cost estimate on a time and materials basis. This cost estimate more often than not exceeds a good-faith estimate. In the best possible vendor relationships, the vendor not only helps its client contain costs, but also finds ways to reduce costs over the period of the relationship.
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