Managing

Business Relationship
-VENDORS
Chapter 4-2:

DEALING WITH
VENDORS
Establish a relationship

Past experience
Past organization experience
Past personal experience

Negotiate

Help the vendors

Think long term

Get multiple bids

DEALING WITH
VENDORS

Set up a trial
experience
Buy something
small -> to make
the needs clear
and realistic ->
note how well the
vendor perform

How well does

each vendor
meet each
criterion?
For important
purchase decisions
-> set up a simple
matrix to compare
the options

Spending limits
Formal standards
to determine level
of personnel to
sign for how much

DEALING WITH
VENDORS

Reviewing contracts with vendors

Getting formal legal or legal consultant to assist on

reviewing the contracts

Issues on confidentiality, warranty, liability, applicable laws

Sections Terms and Condition (Ts and Cs)
Service level guarantee
Specification of hardware and software
Support, maintenance, upgrade terms
Automatic renewals
Ability to return/cancel if not satisfied
Specific deliverables
Associated costs, time frames etc

Everything is negotiable and can ask for changes

DEALING WITH
VENDORS
Direct company reps
Effective means of getting the equipment you need
Better informed about the product than VAR of how the products works, how many items
they have, or have idea where to get if dont have

Value Added Resellers (VARs)

Salespeople with multiple product line
Resell other manufacturers product
Can provide excellent price
Can provide additional services
Eg preload software, keep track on licenses, get detailed information on the product and
get support

KEY EVALUATION
METRICS

Set up a matrix
To evaluate most technology products
Typical evaluation matrices include:
Functionality

Price

Performance
Vendor viability: is this a vendor that will be
around for a while
Training required

Vendor services

KEY EVALUATION
METRICS
Functionality
Does the product do exactly what you need it to do?
Price
capital investment up-front cost of an item, including the hardware and
software and other components to make it do what you need it to do
Total Cost of ownership (TCO) up-front capital investment, including the
costs for ongoing support and maintenance, implementation, training,
prerequisite hardware/software, conversion/migration etc
Performance
Vendor viability
Training required

KEY EVALUATION
METRICS
Cont

Vendor services

Do you need the professionals services from the vendor to

customize the product, or help to install or integrate into your
environment
Scalability
support and and service
Interoperability
speed of delivery and availability

SAMPLE EVALUATION MATRIX

Vendor evaluation matrix
Functionality
Price
Performance
Vendor viability
Training required
Vendor services
scalability
support and service
interoperability
speed of delivery and
availability

Product A

Product
B

Product
C

Best
Option

GETTING CURRENT
INFORMATION

The Web
Vendor representatives
Trade journals
(electronic
and print)

Trade shows

Brown bag
lunches

GETTING CURRENT
INFORMATION
The Web
Trade journals, newsletter and news
outlet
eg.
www.cnet.com,
www.itmanagersjournal.com,
www.slashdot.org
Technology standard eg. ANSI
www.ansi.org, IEEE www.ieee.org
Reference
information
eg.
Ww.whatis.com,
about.com,
wikipedia.com, www.webopedia.com

GETTING CURRENT
INFORMATION
Vendor representatives
Invite key vendors to come in and meet
with you once or twice a year for specific
product vendors, system integrators or
resellers (executive briefing center)
To tell the new product
announcements,
Changes in product lines
What their other customers are doing
with the technology

GETTING CURRENT
INFORMATION
Trade journals (electronic and print)
Start with free publisher group first eg. ZiffDavis
(www.ziffdavis.com),
CMP
(
www.cmp.com), IDG (www.idg.com)
Glace the headlines to keep you aware of
what is going on
Look into journal which match your
responsible level and topic that relevant to
your department
Circulate the relevant information to your staff
Sign for emal and latest newsletter

GETTING CURRENT INFORMATION

Trade shows
The seminars, conferences and
panel discussions can be very
valuable
The topics may about a recently
completed project, management
strategies or the pros and cons of
different technologies
Make use of QA and testing and
evaluating products

GETTING CURRENT INFORMATION

Brown bag lunches

Is an informal get together
where attendees bring their own
food
Eg sharing knowledge after
attending
a
course
or
volunteered present briefly on a
technical topic of their choice.

PURCHASING SOURCES
Web
(catalogue)

Gray
markets

Retail
stores

VARs

PURCHASING SOURCES
Web (catalogue)
can quickly scan to get informed
about product categories and
the price information
Can access them even if not
connected or near the machine
that you need

Pros and cons of buying on the

Web
Easy to get more detail
about the product
Can get information about
the product without buying it
Easy to get
comment from other
users/purchases of
the product

Item sold online

sometimes cheaper

Can buy direct from

the manufacturer or
various resellers

Pros

Dont have
opportunity to
establish a
relationship
May insist
credit card
paymentopposed to
the corporate
purchase
order

It may difficult
to assess the
delivery,
warranty and
service
options and
the rights

Cons

PURCHASING SOURCES
Retail stores
If they have what you want ->
may be the quickest place to get
something in an emergency
Most corporate IT not purchase
in retail stores because retail
stores do not have sophisticated
hardware that IT need

Pros and cons of buying from a

retail store
Its primarily
targeted for
the
consumer
market,
usually not
the brand or
item you are
looking for

Limited inventory

Fast

It is retail operation (traditional)

Tactile
can touch
Pros

Eg open
certain
hours

Eg counter
queue

Difficult to
find things

Cons

Promoter

PURCHASING SOURCES
Gray markets
Are brand name items sold
outside of the producers
official distribution channels
Dont include the companys
warranty, service and support
Dollar costs and legal costs

PURCHASING SOURCES
VARs
Can be the best avenue for purchasing
hardware and software provided you know
exactly what you want
Combines various components hardware,
software, services or a combination of all
three to provide a custom solution
It may make the environment complex and
the needs will be well define, that can value
added and increase the cost and not
necessarily additional item