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By Susan Marks 04/23/01
Your Web host isn't up to expectations. Your site is available 99.7% of the time as stipulated by contract, but performance is slow, bandwidth is tight, and the firewall isn't keeping hackers out. You call your account representative, but he dismisses the complaint. After all, he says, uptime is adequate. If you want other shortcomings fixed, it'll cost.
These kinds of disagreements with vendors are all too common,
especially with large or customized IT installations during extended rollouts.
One party thinks it has delivered per contract; the other says results
aren't what it thought they would be, says Sandra Sellers, president of
Technology Mediation Services, a McLean, Va., firm specializing in IT
mediation. Perhaps the parties didn't understand each other clearly to
begin with, or their needs and expectations changed over the course of the
process.
Whatever the reasons for disputes, quick resolution is
critical. Without it, costs can spiral out of control. Before General Electric
set up its formal early dispute resolution (EDR) system, for example, it spent
tens of millions of dollars more annually resolving problems than it does now,
says Elpidio Villarreal, a legal counsel with the Fairfield, Conn., company.
Ideally, you should address a process for handling disputes in detail in a contract. “Don't wait for a critical event to happen before you try figuring out how to make the system work,” says Kevin Coyne, customer care center director specializing in problem escalation for Sun in Broomfield, Colo.
Step-by-step problem solving
Sun has a five-level customer problem resolution procedure
that typically starts with frontline technicians and includes parallel
notification of managers. If a critical problem isn't resolved - usually
within two to four hours - it escalates to the next level, Coyne says. Customers
can escalate a problem to a supervisor or the next level at any time if they
are not satisfied with how the vendor is handling the problem.
When working with a Web host or application service provider,
a service-level agreement should clearly spell out procedures for escalating
problem resolution, says Jeff Berger, a senior consultant for International
Computer Negotiations in Marshall, Mich. Without these details, and after a
contract is signed and money exchanged, an IT manager won't have much leverage
in getting an issue resolved, he adds.
Additionally, a good contract should include an
“independent obligation to perform” provision that commits the
supplier to meet terms of the contract, usually for 90 to 180 days, during a
dispute. That way a Web host, for example, is contractually bound to provide
service even if you withhold monthly payment to force resolution. Otherwise,
all you can do is threaten to take your business elsewhere. You can, for
instance, write a request for proposal and offer the incumbent provider a
one-week head start over competitive bidders. If the entrenched provider can
meet the stipulated requirements for little or no increase in cost, then you
don't send out the RFP.
“This requires the best poker player in your organization, but it can work,” Berger says.
Vendor contracts also should stipulate mediation, if
necessary, to keep parties out of court, says Karl Slaikeu, CEO of Chorda
Conflict Management, an Austin, Texas, consulting and problem-resolution
training company.
Nonbinding mediation can take place at any time in a dispute, adds Sellers. And, she notes, a formal mediator can help negotiate the best course when problem resolution involves compensation. What's fair depends on the situation; it could be money or the right to work outside of, or even entirely break, a contract.
GE's Villarreal emphasizes not waiting too long before calling in lawyers or professional mediators as partners in crafting solutions. With Chorda's help, he instituted GE's EDR procedures to keep conflicts from escalating out of control. “The intention is to have a cradle-to-grave dispute-resolution process,” he says.
Problem solvers
Identifying the right person to solve a problem starts with both sides in a conflict asking the question, “Who makes the final decision?” then together deciding whether to escalate the issue.
“You can always unilaterally go over someone's
head... but if you want to keep building bridges to make a good working
environment, ask the question and make some joint plans about taking it to
other people,” Slaikeu says.
Instead of immediately escalating a problem up the chain of
command, Slaikeu advocates training all staff in conflict resolution, and
having a third party (from human resources or an external firm) a phone call
away to offer advice and direction. For example, Chorda is looking at offering
a toll-free number with an ombudsman on call.
Bringing in the lawyers
Often, you can get good informal advice from an outside
lawyer or a staff attorney, says Clyde Long, a business litigation attorney and
CEO of iCourthouse, an online dispute resolution company in Lafayette, Calif.
If a dispute has to go beyond an immediate supervisor to a manager, it also
should go to the lawyer, he adds, because that person could offer a creative
solution as a dispassionate third party who is not pointing fingers. Plus,
sometimes just the threat of a lawyer's involvement can be impetus for
problem resolution.
Long favors getting the problem away from the frontline
people with emotional stakes in the outcome. The goal is to preserve working
relationships with existing vendors.
Sometimes, however, even mediation and negotiation
won't work. Such might be the case when a vendor is trying to rip you
off, is going out of business or is going bankrupt. In the latter case, a
smaller vendor may even sue a larger customer for damages if that customer
withheld payment during the problem resolution process, as a way to maneuver
its way out of bankruptcy.
Whether you've built problem resolution into vendor
contracts or not, don't ignore a problem and hope it will go away,
Slaikeu says. “We teach people to look for [trouble] signs and jump on
them - to acknowledge them and to talk about them.”
Marks is a freelance writer in Denver. She can be reached at sjmarksco@aol.com.
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