Tech partners can aid companies in embracing the fast pace of change in business technology and meeting business goals. However, certain common mistakes spring up when organizations are seeking out and then managing relationships with those third-party vendors that should be avoided.
"Technologies, integration, and open source tooling is all changing so fast that buyers need to look at how to embrace these relationships with a business integrator rather than a systems integrator," said John Mullen, CEO of technology consulting firm Capgemini North America. "The rate of change is so high that it's difficult for buying clients to stay ahead of change curves. They need that partnership more so than ever before. If you want the pay off, you have to figure out how to plan for change, and make decisions around technology faster and more efficiently."
Here are 10 mistakes to avoid when it comes to finding and managing relationships with tech partners.
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Third-party partners may include business consultants, technology consultants, software providers, and technology specialists. "Each of these providers have different backgrounds and focus. They can provide different services and outcomes to your organization," said Julie Short, research vice president at Gartner. "They cannot all be managed in the same manner and with the same approach."
Companies must be able to identify their business and technology needs, as well as their ultimate digital transformation goals, Short said. "Tech providers need as much information as possible to address client expectations and deliver outcomes," she added. "If this information is not available, then that also must be shared with the tech provider."
Tech providers will not be able to solve every problem in your organization, Short said, and also lack insight into the various structures of your company. "Be realistic about your expectations with regards to tech providers," Short advised. "Some can deliver significant value, and others may be only able to deliver on the tasks you have given them."
In digital transformation efforts, "all technology providers must deliver business outcomes. No exceptions," Short said.
Third-party vendor decisions must be driven by the IT or business process, rather than only on procurement, said Capgemini's Mullen. Otherwise, you lose all flexibility in the partnership, and ability to build on solutions. "If somebody thinks the definition of a good relationship is a well-written contract, they're heading down a path that's going to be a hairy mess," Mullen said.
The importance of communication in managing a vendor relationship can't be overstated, said Andrea Wasserman, founder and consultant at Captain Customer. "If a vendor does not know what's working for you and what's not, or how you are using the technology, they can't help you use it better or make you happy," she said. "View it as a partnership, not just a transactional vendor/buyer relationship." It's also key to understand what the vendor can do, Wasserman said, as some may have a more consultative approach than others. "You don't know until you ask," she added.
It's important to communicate an issue as soon as you see a potential problem, and put it in writing, Wasserman said. This is less about creating a paper trail, and more about getting the same message out to everyone on both sides of the table, which can be important in resolving it, she added.
Tech providers are business organizations as well, said Gartner's Short. If you truly want to partner with them, take the time to get to know them. "Any type of partnership is a relationship," Short noted. "It may be a significant relationship or not, so this needs to be adjusted according to the level of importance this relationship has on your organization." It's also important for companies to never abdicate their own responsibility in this relationship, Short added.
Cultural fit is as important as technical fit and price fit, Mullen said. "In any relationship there is going to be bumps -- the definition of success is not the absence of issues, but how organizations work together to resolve issues," he added. "I would urge all clients to think about how important culture fit is to get to successful outcomes together, particularly if you want the relationship to go beyond the contracted piece of work to future journeys."
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Business technology, analytics, and artificial intelligence move at lightning speed, said Boris Evelson, vice president and principal analyst at Forrester. Therefore, especially when it comes to business intelligence products and services, enterprises should demand that these vendors provide continuous, uninterrupted upgrades, which are always 100 percent backwards compatible and do not require any upgrade or conversion effort on the part of the client, Evelson said.
While negotiation is part of the relationships with outside vendors, "if you allow the fact that there is negotiation to be the foundational definition of the relationship, the conversation of value narrows down to the lowest common denominator," Mullen said. Instead, the business problem should set the foundation, and companies should engage with partners that can offer you a new perspective on what you are trying to solve. This also leaves room in the relationship for new, creative thinking to occur, said Mullen.
Organizations with multi-sourced, multi-vendor, multi-component relationships are much more prevalent today than five years ago, Mullen said. Often, businesses treat these relationships separately, without creating any common language or goal. However, "it's critical that the organization forming these relationships gets everybody in a room and gets to a common agenda and definition of success," said Mullen.
It's critical to consider what will be required from your own team in order to leverage the technology offered by third parties, Wasserman said. "If a tech vendor says it's only going to take four hours for you to integrate their tech across all your platforms and you don't properly validate that, it can end up taking weeks of your own engineering team's time. It's a big risk to avoid," she said.
Similarly, if a tech vendor is going to provide your company with lots of data about your customers and you don't have anyone internally who can analyze that data and take action on it, you've made a mistake paying a vendor for that information, Wasserman said. "There are a lot of considerations about the internal resources you have or don't have, and how to use them," she added.