We find it amazing how often large vendors in either ERP, Supply Chain, or some other category of software, come in to a deal and do not offer the prospect the best information to help make a decision. References are not provided or slowly given, prices are kept at a premium, and in some cases the prospect is mislead on the functionality of the software. While vendors do need to use their references wisely, users do need to know where to turn when they are not getting answers. If a vendor finalist is slow to respond with references in your industry and size, than you either have something to worry about or perhaps need a technology analyst firm that has connections to get you the references you need.
In most cases there are at least 2 or 3 vendors that can meet your functionality needs, and often more. So negotiations are always in order. If the vendor can not provide many references in your industry but you are comfortable with them, you have some room to negotiate on price as you may be the first account for them in an industry so you are more valuable to them as a future reference.
Software vendors are always very aware of pre sales support costs and they try like everyone to control these. Examples would be if they do not send their A staff to a prospect’s site. In the hundreds of engagements we have had with clients, we have often seen the level of frustration grow as every prospect wants to have contact as high in the vendor’s organization as possible. The prospect often gets frustrated without having much visibility to executives at the software firm that can really influence the amount of attention they get. This is where having that trusted independent advisor working alongside them can prove invaluable. When it comes to crunch time in your technology assessment and evaluation, and cannot come quickly enough for you, an experienced, networked independent advisor can assist.
Analyst advisory firms can help small-medium businesses get appropriate visibility up in to the software or technology vendor’s organization establish VP contacts to help things move more quickly in terms of getting questions answered as well as moving the implementation along after selection. However, many companies don’t have an advisory firm relationship. In these cases they really need to use their network of contacts to find suitable examples to gauge the vendors properly to determine who should be kept in the process and who should be eliminated.
This issue of talking to the right people at the right time in the right way is not restricted either to the software and technology space. The vendor influence or lack of it can occur beyond just software vendors. In a recent example, we helped a company who was a company was in the process of a paying $750K deal for technology to develop their medical device equipment. Their contact was at the sales engineer level from which they were getting a 7 month delivery time. When we were told that this was a small private company, our first reaction was this was probably a nice order for a small private company. We were able to establish a VP-level of Sales contact for this medical device manufacturer that quickly resulted in a 70%+ reduction in their lead-time . The result was a decrease in their wait time of 5 months. Imagine what this expedited time to market means in an industry where 12-18 month product lifecycles are typical! This was a crucial Return on Investment for them as they will now be able to get their product ready for the market without a significant delay.
So the next time, you feel like you are not getting the answers or fair treatment you deserve from a large vendor, take a step back and do the following 7 guidelines:
- Demand references in your industry. Many vendors have less than 50% of their revenue in SMB which means they have even less representation in SMBs in your industry and could have a very small percentage dedicated to companies in your industry.
- Just because you are an SMB, do not settle for 2nd best in your dealings with the software/technology vendor. Many enterprise-level vendors are now focusing more on the SMB area than they have in the past.
- Ask for a VP level contact in their company
- In these trying times, it is as important as ever to make competition for you by keeping the sales dialogue going with multiple vendors while you weigh the trade-offs between present and future functionality, pricing, vendor relationship, and other factors.
- Consider 2 or 3 other providers so you are sure to make the best decision
- If you are not satisfied with your access to appropriate executive levels of the vendors organization, Consider bringing in a trusted 3rd party advisor to be your advocate in the process. Large Fortune100 companies do this; this is even more critical for small-medium businesses. T hey can help you escalate the deal to the level in the vendor organization. These analyst firms usually require a yearly subscription fee. Thus, you will need to assess your yearly research needs with the analyst offerings to see if you will get your money’s worth by using them. But there are some research firms that don’t require a yearly fee and there are research publications that provide vendor comparisons that you might need. The latter, however, do not provide direct access to analysts for your specific needs.
- Use your network as widely as you can. It takes a lot of effort but if you can find vendor validation and give a vendor thumbs up or thumbs down, it can be a big risk negator.
Selecting a vendor can be an exciting thing as you are finding technology to help move better business processes along and to be more competitive in the industry. However, it can be a frustrating thing dealing with multiple vendors and often having more questions than answers. There are resources out there that can help you by contacting some of the vendors and taking some of the uncertainty out of the equation. Use this document as a guide in the process. If you have any questions, feel free to contact me at firstname.lastname@example.org