Monday, January 14, 2013

The Au Rule of Vendor Management

There are so many negotiations that people engage in on a daily basis.  It could be anything from asking your children what they want to eat, agreeing to do a favor for a friend or co-worker, or fleshing out the terms of service with a vendor.  If you have ever purchased an automobile, you have probably participated in "extreme" negotiation.  While these situations all involve negotiation, the approach taken always differs depending upon who is involved.  There are also constraints on what each party can agree to and usually involve some sort of resource trading and distribution.  These situations are "active" negotiations.

Many people don't realize that they are also involved in many more "passive" negotiations.  You choose where to buy your gas or groceries based on factors such as price, convenience, and availability.  The same holds true with restaurants, theaters, and even parking garages.  In these passive negotiations, people evaluate the goods or services available and then make choices on where to purchase.  The merchants or vendors do not have active communications with their customers, but still participate in the negotiation process.  How do they do this?  Some use loyalty cards to track the spending habits of their customers.  Others, like Target, are much more sophisticated and can track a customer no matter what form of payment they use, other than cash, and most people don't pay that way anymore.  With the data they collect, merchants know how they are performing in the passive negotiation process.  If the merchant's actions are detrimental, customers vote with their feet by moving elsewhere.  If they are successful, more customers "stick" and still others are attracted.

In IT, it is difficult to train people in vendor management when they first achieve a level of responsibility where this skill is necessary.  To be truthful, some people never learn.  But the first lesson to teach a new manager is the importance of vendors to the future success of their personal careers.  IT is such a complex, dynamic, changing function that leaders will always need external partners.  Some partners are very tactical, others highly strategic.  But their contributions will eventually make or break the career of an IT leader.  On this point there can be no disagreement.

So what is the problem that your training of that leader must first address?  The answer ties into the first two paragraphs of this posting.  Everyone brings their own personal life experiences into the workplace.  Life and experience teach that negotiations are about win/lose situations.  When you begin teaching your personnel that IT vendor management calls for creating win/win situations, this will seem counter intuitive.  After all, why is it a bad thing to try and negotiate your networking partner or SAP implementer down to the lowest possible cost?  Why is it bad practice aim for service level agreements that are virtually unachievable if the vendor is so hungry for business that they'll agree to almost any term if it results in revenue?

The answer comes in many forms and clich├ęs:
  • "What comes around goes around"
  • "Treat others as you would have them treat you" (The Golden Rule)
  • "What's good for the goose is good for the gander"
  • "You reap what you sow"
Hopefully you get the point.

The reason why you must teach your staff (and possibly even yourself) is that the best way to manage vendors is to act like they are your neighbor.  Despite the size of the Earth, the IT community is very (a) insular, (b) talkative, (c) interchangeable.  Just like your neighbor isn't going anywhere, your partners will be around you for as long as you work.  How you treat them is important because your reputation will follow you everywhere.  

When you enter into a new partnership with a vendor/partner, it may appear that you have the strong hand.  However, sooner or later the "chips will be down" for you and you'll need your partner to, essentially, bail you out.  Will the golden rule save you or drown you?  Believe me, vendors are people too and will remember every aspect of your relationship with them.  If you've created great partnerships that are mutually beneficial, you're going to find that life preserver there when you need it.  If you have treated your partners like 2nd class citizens who should be happy to get any business from you, get ready to swim on your own.

Friday, January 4, 2013

Answer The Bell

Most people that have spent more than five years in IT begin to understand the essential nature of the beast.  Yes, we could shut off the network, disable email, scramble the phone system and the company would come to a grinding halt.  But of course we don't do that because we (a) take pride in our work and (b) doing things like that result in a quick trip to the unemployment line. 

While we have a lot of *real* power in terms of our ability to affect business, IT staffers (at all levels) do not have much "inherent" power (http://legal-dictionary.thefreedictionary.com/Inherent+power).  In other words, our positions up to and including the top, or "CIO", really don't inspire fear or awe in the average business person.  If you don't believe that, line up the CEO, CFO, COO, and CIO and have them each give the same command.  For more fun, make sure that all four look, act, and talk all the same, which in scientific terms is called "removing the bias" for external factors.  I would be willing to bet $5 that the CIO will, in general, inspire less action than the other three.  Also, just imagine out of the three, excluding the CEO, who would have more success in overruling the other.  Would it be more likely that the CIO overrules the CFO or would the opposite be true?  Again, not really a contest in most situations.

So what does all of this mean?  Why write about it?  The answer is that IT has, is, and always will be a service function.  Sure, IT is the only function in the company that truly has a view into all facets of the organization.  But that is only because that purview is required to ensure that all services are available and working as often as possible. 

Some people believe that the lack of inherent authority within positions inside the IT career path are less desirable.  Why undertake a life career within a function that few understand or respect at the same level as finance, operations, or sales?  The answer is not a simple one, which is why the United States is graduating fewer and fewer "native" IT professionals.  Let's take a look at some of the benefits of being in IT:
Now to get to the ultimate point of this post.  What does it take to be a good service provider - the one that gets jobs and then keeps them for you?  Yes, you have to possess skills that allow you to execute at an acceptable level.  That much is obvious - and no, being a superstar is not a requirement.  The true ONLY requirement is availability.  Since IT systems and services can and do break all the time, especially on nights, weekends, and holidays, it is an absolute *must* that you be available to jump on the problem immediately.  You don't even have to always solve the problem.  Most people will give you all sorts of slack, time, and understanding IF you are reachable.  To a user, or customer, nothing is more infuriating than having a problem requiring immediate attention and feeling utterly powerless because they cannot reach a single person.

How did I learn this other than the obvious answer of on-the-job training?  Here is a bit of self-disclosure; a lesson I learned in Japan during the middle nineties.  (I had a great mentor, "AH", who taught me many lessons that I still use today over 15 years later.)  We were in the Tokyo area with the task of bringing up the systems and infrastructure to support a new sales office there and a distribution site near Mount Fuji.  The place was actually called Fuji City.  In the United States when you want to do business with another company or person, you meet in the office, get right down to business, and get things done.  Not so in Japan or in other Asian countries.  Each party must first get to know each other personally because business is relationship driven.  What this meant for us was many late-night dinners.  Of course, late night dinners at least at that time also consisted of quite a bit of late-night alcohol consumption.  There were many, many nights where our business dinners didn't wrap up until 2-3am.  You can just imagine how easy it was to go from that to getting back into the office the next day.

AH was very wise and said this to me: "Christopher, you are a service provider.  The most important thing you can do, no matter how you feel or what the situation, is to be available.  You must always Answer The Bell .  If you feel like you're about to die and the office opens at 8:30, that's when you show up.  Not 8:45 or 9am - it must be 8:30am." 

What he meant is that you must always be available for your customers when they need you.  As I said so loudly above, that is how you become and stay an excellent IT professional. 

**AH also said that I could implode, break apart, or go find a dark corner in which to recover after 8:30.  I just had to be there, on time, available and ready to go when the customers expected me**