Achieving success as an IT business cannot be done alone. Trusted partnerships and relationships are paramount in fueling the success of your business. When it comes to vendor selection, a mutually beneficial relationship can advance the goals of both parties. However, poor vendor selection can backfire and create a destructive environment. AllianceTek recently experienced first-hand the harmful repercussions of a wrong vendor selection. While it created a difficult situation, it did allow us to gain some valuable insight about working with vendors that we would like to pass along.

The Overpowering Vendor

The experience of approaching a new vendor for a project can be both exciting and daunting. In this particular case, there were several lessons learned that could be helpful for future projects. One of the initial mistakes made was not clearly defining the roles and responsibilities of each party involved in the project. This lack of clarity led to confusion and eventually resulted in the vendor overstepping its boundaries and taking over the client entirely.

Moreover, the vendor seemed to be more focused on making unrealistic promises rather than effectively communicating and cooperating with the project team. This lack of communication and cooperation made it challenging to maintain a clear overview of the project and created an atmosphere of mistrust and frustration.

The consequences of these issues quickly became apparent, and the project began to suffer from a lack of progress and direction. It is crucial to establish clear communication channels and regularly monitor the progress and quality of work from any vendor or team member. Furthermore, having a contingency plan in place for such situations is also essential to ensure that the project can continue to move forward without significant disruptions.

Vendor’s Retreat

As the project progressed promises began to break and expectations were stretched. The client started expressing concerns and had a lot of questions. At a crucial point, instead of resolving these issues, the vendor started backing out. After a flurry of excuses they eventually decided the time they should spend on the project was over and started demanding payment. They then stopped attending meetings altogether. On the contrary, the vendor was supposed to assist throughout the project.

“Managing a client is a marathon, it’s not a hundred meter dash” – Sunil Jagani, CTO, AllianceTek

What To Do?

So who should be responsible for the fallout from this toxic situation? AllianceTek’s policy is to strive to provide end-to-end solutions and support until our clients are completely satisfied. So even though we were not pleased with the vendor, AllianceTek decided to take complete responsibility for rectifying the situation. We went back to the drawing board and offered a number of supportive measures that the client would need in order to streamline the process. While this was a costly endeavor on our end, it did sustain the project and keep our client pleased.

A Valuable Lesson

Despite dealing with a difficult situation, AllianceTek gained some value from the experience by learning some valuable lessons. The first is that one must have a basic agreement with vendors that outlines roles and responsibilities. This agreement must be understood and signed by the vendor before any work has begun. If a beneficial relationship is not established early on then it becomes too difficult to replace a vendor halfway through the project.

Basic Vendor Agreement Points

# Introduction to Client

The vendor must always be introduced to the client as a member of "Your Company's" team rather than an individual or individual company. This is important to establish the vendor's relationship with the client as a part of "Your Company" and not as an independent contractor.

# Attendance of Meetings

The vendor is required to attend all calls and meetings scheduled by "Your Company" and/or the client. This is essential to ensure that the vendor is up to date with the progress of the project and any changes that may occur.

# Communication

All communication with the client must be done through "Your Company's" email ID provided to the vendor. Moreover, all such emails should be c.c. to "Your Company." In case of any communication through direct phone calls and/or direct meetings, it is mandatory to inform "Your Company" prior to such calls/meetings without fail.

# Project Management System

The vendor must use "Your Company's" project management system. This is essential to ensure that all tasks and work allocated to the vendor are tracked and monitored effectively.

# Approval

It is the vendor's responsibility to obtain all necessary approvals from the client for all tasks and work that fall within the vendor's scope of work.

# Change Requests

If there are any change requests, it is the vendor's responsibility to get them approved by both the client and "Your Company." This is important to ensure that any changes to the project are properly documented and approved.

# Payment Terms

The vendor will be paid on a project basis, and as per the payment terms decided by "Your Company." This is important to establish clear expectations and ensure that both parties are in agreement on payment terms.

# Payment

Payment will be made to the vendor by "Your Company" on receipt of payment from the client for any task or work allocated to the vendor that falls within the vendor's scope of work.

# Non-Compete

The vendor must not work with the client directly for a period of two years on any assignment, project, or work. This is important to protect the interests of "Your Company" and prevent any potential conflicts of interest.

# Termination

In case the client or "Your Company" finds the quality and administration of work unsatisfactory, "Your Company" has the right to discontinue working with the vendor with immediate effect and without making any further payment.

# Non-disclosure

The vendor will be required to sign and abide by the non-disclosure agreement of "Your Company" /Client. This is important to protect the confidentiality of any sensitive information that may be shared during the project.

Conclusion

Getting burned by a vendor can be a costly and frustrating experience. However, it can also provide valuable lessons and insights that can help prevent similar mistakes in the future. Some of the key takeaways include the importance of conducting thorough research before selecting a vendor, establishing clear expectations and communication channels, regularly monitoring progress and quality of work, and having a contingency plan in place in case of issues or disputes. By implementing these lessons, individuals and companies can improve their vendor selection and management processes, mitigate risks, and ultimately achieve successful outcomes for their projects and businesses.

Call us at 484-892-5713 or Contact Us today to know more details about the Lessons Learned From Getting Burned by a Vendor