Vendor Management – some thoughts…

Not for the first time I’m working to help establish better ‘vendor management’ Mainly my work is falling into 2 broad  – keeping track of licenses and vendor relationship management.

Keeping track of Licensing and Support

I break this down into 3 main buckets of information that needs to be captured, tracked, reported and analyzed.

What did we buy

First we need to know what we bought. I think the following bits of information is important. Now Purchasing may want more/different information but for IT staff, we will want to know:

  • What licenses did we buy from Vendor X
    • By Product
    • By Purchase Order (date)
    • By Internal Team (It is possible more than 1 internal team bought the same product at different times – for different amounts)
  • What support did we buy from Vendor X
    • By Product
    • Number of Licenses supported  (Not all licenses are always supported – for instance, maybe we bought 100 but only got support on 75 because the other 25 are in our lab for testing)
    • By Purchase Order (date)
    • By Internal Team
  • When will licenses purchased from vendor X expire
    • By Product
    • By Purchase Order (date)
    • By Internal Team
  • How many licenses are currently active from vendor X (Sometimes licenses are superseded by other purchases or by coterminating efforts or other consolidation efforts)
    • By Product
    • By Purchase Order (date)
    • By Internal Team
  • What is the total amount (sum of all active licenses) spent on vendor X
    • By Product
    • By Purchase Order (date)
    • By Internal Team

If you have all this information you will be able to see if you have multiple teams buying the same stuff (this happens), if you are not taking advantage of bulk purchasing (by buying smaller amounts at different times), as well as just getting a clear idea of how many licenses you (believe) you have in total and how much it is costing you.

What Are We USING

Next we will want to know what we are currently using. We will then use the output of this data to compare it to the output of “What Did We Buy” so we can see how are doing

  • How many licenses are we using from Vendor X
    • By Product
    • By Internal Team 
    • Last Audit Date (Audit Date for each Internal Team using a product)
  • How many times did we contact/use support from Vendor X
    • By Product
    • By Internal Team
    • Last Audit Date (Audit Date for each Internal Team using a product)

So, it doesn’t seem like a lot of information here – but the issue here is actually getting this data. This will require various audit processes and probably some manual work. I’d recommend you do this at least 2x a year though.

Once you have this information you can compare what you are using to what you have purchased and see where you are with capacity (under, over?). This can then be used to help you plan future purchases. You can also see if one team is using a product more than another team – this could lead to consolidation and management by the team that uses it the most while the other team just becomes a subscriber.

On the support information – you may find that you are paying for 24/7 support but don’t need it. It isn’t always a question of how often you’ve contacted support though – some applications (or hardware) are business critical so, even if you don’t call support often you may want to have 24/7 support. Otherwise, you may find some cost saving opportunities by reducing the amount of support you are paying for.

THE VENDOR’s RECORDS

The previous two parts seem “obvious” to most (even if they don’t actually do it) – this one though is usually less “obvious.”

The vendor should also have records of what you’ve purchased and how many times you’ve contacted support. This part is to ask them for their records and then you compare this to your records.

You may be surprised to find that you think you purchased 100 licenses while the vendor thinks you have 110 or maybe 90. You may think you have 24/7 support but the vendor thinks you only have 8/5.

This however shouldn’t just be a report or spreadsheet provided by the vendor. Hopefully you use this opportunity to meet with and discuss this with your vendor. You should for instance cover things like – how the licenses work, or what is the future of the product. You may be surprised to know that you are not using the licenses in the intended manner (maybe this is a good thing or a bad thing – maybe you are applying them to your test environment and you don’t have to do that – or maybe you aren’t and you should) that the product will soon be discontinued.

Information you will  want to collect from the vendor:

  • What licenses did we buy from Vendor X
    • By Product
    • By Purchase Order (date)
    • Last Audit date (this should be done at least once a year, hopefully 2x)
  • What support did we buy from Vendor X
    • By Product
    • Number of Licenses supported  
    • By Purchase Order (date)
    • Last Audit date (this should be done at least once a year, hopefully 2x)
  • When will licenses purchased from vendor X expire
    • By Product
    • By Purchase Order (date)
    • Last Audit date (this should be done at least once a year, hopefully 2x)
  • How many licenses are currently active from vendor X (Sometimes licenses are superseded by other purchases or by coterminating efforts or other consolidation efforts)
    • By Product
    • By Purchase Order (date)
    • Last Audit date
  • What is the total amount (sum of all active licenses) spent on vendor X
    • By Product
    • By Purchase Order (date)
    • Last Audit date
  • How many times did we contact/use support from Vendor X
    • By Product
    • By Internal Team
    • Last Audit Date (Audit Date for each Internal Team using a product)

Using the information

Hopefully it is fairly clear what you can now do with this information. This can be a very useful tool in your budget planning, vendor relationship management, internal auditing practices, and even improving your procurement or license management processes.

Vendor Relationship Management

Beyond just leveraging your vendor to help you keep track (verify) all your product purchases and support calls you can leverage your vendor to help you plan for the future.

Your vendor should be able to meet with you and tell you their product lifecycles:

  • What is new
    • What business opportunity does this help create or problem it helps solve
    • Can you help write a business case
  • What product is going away
    • When
    • What does that mean for support
    • Why – is it replaced with something else
  • What product is being upgraded
    • When
    • What are the new features
    • What is the upgrade path
    • Does licensing change
      • If so, how
  • How do your products integrate
    • Which versions of your products integrate with which other versions
    • Will future upgrades change any of the intergration points
  • What products versions you are no longer supporting
    • What versions
  • Is there a “local user group” meeting
  • Is there a vendor conference
    • Can you help fund the cost of going
    • Can we meet developers or product managers
    • Can we meet other customers in our area

You should meet with your vendor and discuss these things at least every 18 months. In my experience these can be hours long and usually require a NDA.

The output of these meeting though can be hugely influential on your own internal roadmaps. You may also get to go to a conference! (Worked for me more than once).

Beyond that you should qualify your vendor as either a strategic, supporting, or periphery type vendor. Meaning, does this vendor supply you with services, software or hardware that is key to your business? Or something quite useful but not quite key. Or something used by can easily be replaced.

You want to spend your time mostly with strategic type vendors and not that much with those on the periphery – although I suggest you do meet with all of them. You never know when someone can move from the periphery to supporting or strategic!

When you meet with your vendor try to keep up with the following:

  • Who is your account manager(s)
    • By services, products
  • Who is their technical resource
    • By services, products
  • Who are their VARs or partners
    • By services, products
  • Who is your account manager’s boss

You should always try to have your technical resources meet with their technical resource and have your management meet with account manager (and above). Not everyone needs to have a full meetings with everyone else. It is not much value to have your Director, VP or CIO to spend a lot of time with their technical resource or have your technical resource in a 2 hour meeting with their regional account manager.

Don’t abuse your vendor…but also don’t be afraid to fire them

Vendor’s can be a terrific resource and be very helpful beyond even “normal” – of course this depends on your relationship. Don’t abuse them. Even if the product does’t seem to be working the way you want (or were sold) it to – that is rarely the fault of the Account Manager or Service Desk you are calling for support. Your Account Manager can provide faster access to 3rd tier support or even directly to the developers. I’ve even had the head of development fly from Germany over to our office to talk about our technical issues. This can happen, if your relationship is good. They are people, just like you.

But also, if they are just not working out, they aren’t really helping you, or being responsive to your requests – fire them. I don’t mean that you just stop doing business with the vendor (although that is an option) I mean, just tell the vendor (usually a regional manager) you don’t want to see that Account Manager anymore. They are off your account. Usually this requires some meetings with a Director, VP or even CIO in your organization with some higher ups in their organization – but if that is what it takes….do it. I’ve done it, and it was worth it.

You want a good relationship, your vendor actually does want a good relationship too. Sometimes, it just doesn’t work out with some personalities, don’t fret about it, just get a new person to deal with.