Analysis: Manage or Be Managed
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Devin Jopp still remembers his worst IT experience. he was implementingsome new software for a former employer, and within a month it was clear he had been given the software vendor's B-team. "It was a terrible implementation team," says Jopp, who is now the chief operating officer at the Small Business Administration's SCORE counseling service. "They would set milestones and not meet them, and they didn't have the technical ability to perform." Jopp desperately needed a better team, but as a small shop he wasn't likely to get it.
Unfortunately, Jopp's dilemma is a familiar story for IT executives at many midsize businesses, who often struggle to get the full attention of their vendors. And when they do, they're lucky if the service they receive is acceptable.
But working for a midsize business doesn't mean you have to let technology vendors wipe their feet on you. Preventing sub-par service boils down to three things: knowing what you want, getting it in writing from the vendor, and keeping on top of ongoing projects. Market researchers say that smaller businesses usually slip on one, or all, of these golden rules.
Also, the balance of power may be shifting. Small businesses now have more clout than in the past, because the big enterprise markets are becoming saturated. Gartner Inc. expects IT spending in 2006 to have increased by only 2.5 percent at big companies, but by 6 percent in the small and midsize business market. And according to AMI, that SMB market is pegged at about $228 billion, nearly half of all IT spending.
Ultimately, Jopp did find a way to coerce his vendor into upping its service quality, by adding contract provisions—before the contract was signed—that would force the vendor to replace its team if certain milestones were not met. Because Jopp was keeping a close eye on the project, he collected the data he needed to trigger the provision just weeks into the project. When he presented his data, the vendor was contractually obligated to give him a better team. "They wanted to charge me for putting in a new team, but I stuck to my guns," Jopp says. The project was on time and under budget.
Not all vendor management stories have such happy results. But as technology vendors get serious about courting the mid-market, it's incumbent upon midsize firms to take more control.
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