Management Strategies
Vendor vetting
When it comes to choosing network products, customer references can be an information gold mine.
By John Cox, Network World, 05/09/05
Some network executives either overlook or don't make the most of a key resource in evaluating IT products and services: the
customers that are already using them.
Schon Crouse, PC support analyst with Children's Hospital in Columbus, Ohio, knows exactly how valuable vendor reference checking
can be. He's currently evaluating two software vendors, PDADefense and Extended Systems, for client/server security software
that will be loaded on to handheld devices, including smartphones, used by hospital staff. The Health Insurance Portability
and Accountability Act regulations mandate that the devices lock down the instant they're shut off, which requires the user
to key in a password to turn them on again.
Crouse was quizzing an Extended Systems customer who stunned him with an issue that had never been voiced. "The customer told
me this: 'When the smartphone locks, does it let me answer an incoming call automatically or do I have to key in the password?'"
he recalls. "I never even thought of that. He said that was one of their biggest issues."
He says the answer was that Extended Systems lets you receive calls without entering the password, but to make calls you have
to unlock the smartphone. PDADefense requires users to key in the password before doing either.
While customer references are routinely requested from vendors bidding on a project, using them effectively requires planning,
shrewdness and perseverance.
"In my experience, the mind-set of customers often is that reference-checking is the last thing you do before you sign on
the dotted line," says Kendall Messick, a senior consultant with International Computer Negotiations, which specializes in
training clients to hammer more advantageous and less risky deals with IT vendors.
Reference checking is like mining: knowing where and what to look for, being sensitive to the lay of the land, and using the
right tools. Questions cover product details but also how reliable the vendor is with delivery, customer service metrics,
and even the experience and performance of people on the vendor's account team.
Vendors only will give the names of customers they are certain will give a positive endorsement, Messick says. "But, that
said, if the reference check occurs at the right time [in the procurement process] and is done by the right person who knows
what they're doing, they can get a lot of information," he adds.
Ask for former customers as references, advises Sam Barton, contracts manager for Toyota Motor Sales USA. "In many instances,
we've asked them to give us one or two former customers who have stopped the service [or product] for whatever reasons, pleasant
or unpleasant," he says.
In large companies, purchasing decisions typically are quarterbacked by a group of procurement professionals. At Toyota Motor
Sales, the IT group coordinates IT purchases. In either case, an interdisciplinary team, including IT staff, shepherds the
process from initial requirements to contract signing.
"Our IT department is shoulder to shoulder with our supply-chain department on all these deals," says Jeff Rolsten, executive
director of supply-chain services for BellSouth in Atlanta. "I can only get so far with technology, and then I need someone
who really knows that stuff."
Consistency is key
That kind of cooperation is especially important in drafting the right set of questions, and then asking the same questions
of each customer reference. "With the same questions and the same phrasing, you can get consistent responses," Messick says.
"You want comparable information."
BellSouth routinely quizzes customer references for up to 30 minutes with questions that focus on several key areas: problem
solving, communications, customer focus and price/cost. Although asking references what they paid for a product is verboten,
Rolsten says they can find out if the vendor shows initiative in helping to hold down costs, pass along savings and work with
customers on such matters.
Rolsten recommends using two people on these calls: a questioner and a note taker. The questions vary depending on what the
product or service is. "With as many systems as we have, a typical request is 'Can you ask them how it interfaces with Company
X's software?'" Rolsten says. "Or, 'How does it run on one platform compared to another platform?'"
Children's Hospital's Crouse asked his customer references for the handheld security software how easy it is to install the
software on their computers, how easy it is to update or patch, and then after the update, what additional work, if any, needs
to be done on the client device.
Toyota's Barton starts out with high-level questions, looks to establish rapport with the reference and then works down to
greater levels of detail. "We might start by asking 'What did you bring this vendor in to do?'" he says. "Then, 'Was this
a deliverables-based project or time-and-materials?' 'Did they deliver on time? Were you satisfied?' You start drilling down
into the things that you want this same vendor to do for you."
He adds that his company prefers to speak to the people who are implementing the product and working with it on a day-to-day
basis as opposed to management.
Finding the right people makes it easier to establish rapport and therefore easier to get to a conversation that's respectfully
frank. "We might want a vendor to meet service-level agreements (SLA) and then meet remedies if they don't," Barton says.
"So we might ask a reference, 'Do you have SLAs? Did you ever have to invoke a remedy?' They might reply, 'Yeah, once or twice.'
You get to see where there might have been hiccups."
Those hiccups don't mean you disqualify the vendor. But they become part of the final negotiations, so you can mitigate risks.
If the vendor has been late with deliveries or consistently missed one part of an SLA, the contract negotiations can focus
on providing additional protections for your company.
