Technology is so critical to business success that when supplier relationships fail, it can have a huge impact. Most large enterprises these days have a complex supplier eco system, and if one of those relationships is failing, how can you ensure that your business is protected, and your IT supplier is held fully accountable?
Luckily, at ImprovIT we’ve navigated these waters many times, and can give you some tried and tested advice for you to action immediately:
1. Understand the Contract
The first step in managing a dispute with your IT supplier is to understand the terms of your contract.
We’re always amazed at how often a contract is negotiated by one person, put in a drawer, and then the implementation is managed by somebody else. This nearly always leads to misunderstandings around wording and intentions. When things go wrong you need to get back to basics:
(i) What are you paying for?
(ii) What are you getting?
If a relationship goes sour, the contract should always be your first port of call. It will likely include specific clauses that outline the responsibilities of each party, service levels and performance metrics, dispute resolution procedures, and termination rights. By reviewing the contract, you can establish a framework for addressing the issues, ensuring that both parties are held accountable for their obligations.
2. Gather your evidence
When things go wrong, you need evidence, i.e. “you promised something and you didn’t deliver”.
Again, effective management is key here. Ensure that minutes are taken of every meeting, follow up on actions; and ensure you have email trails rather than spoken agreements. It may seem unnecessary when things are going well, but documenting conversations makes gathering evidence a lot easier if things go south.
3. Communicate clearly
This may seem obvious, but when things get heated, it can be forgotten amid the accusations. Just be specific about the problem and what you expect the supplier to do to resolve it. Back this up with the evidence you’ve gathered to support your case and to demonstrate that you’re taking the issue seriously.
4. Review governance and know your points of escalation
A failing relationship is often a consequence of the wrong governance. This might be because the conversations are happening at the wrong level; or the person that negotiated the contract failed to get buy-in from key stakeholders; or they may have even left without explaining the context to the team that would be managing it.
What can sometimes happen is that in longer term relationships, the CTO has risen through the ranks and from purely good intentions, is still having regular contact with the supplier. This means that their conversations continue to be about implementation or operational issues, rather than strategy. This becomes a problem when the CTO becomes both the first and last point of escalation. There’s nowhere left for it to go. If you’ve found yourself in this position, then it’s definitely time to review your governance.
If you’re considering involving your legal team as the next point of escalation, then make sure that you’ve done your due diligence with the contract and evidence gathering first.
5. Consider alternative solutions
In these situations it’s easy to focus on the problem rather than the solution. However, it’s essential to consider alternative solutions that could help you to resolve the issue quickly and effectively.
This might include bringing in a third-party consultant to provide an independent assessment of the problem, renegotiating the terms of your contract, or terminating the contract and finding a new supplier.
As a senior IT leader, you’ll be dealing with pressure from the business to resolve the situation, and managing the messages up, all with a (very!) full diary. There could also be political and strategic drivers for you to maintain a difficult relationship.
This is where a trusted advisor like ImprovIT can step in to give you the headspace you need to make the best objective decisions for the business. Using our wealth of experience gained across a diverse set of industries, we can advise you on the best options to take, which could also include benchmarking; a market test; mediation; or workshops to improve the governance.
6. Review and Learn
After the issue has been resolved, take the time to review what happened and identify any lessons learned. This can help you to identify any systemic issues within your IT supplier management processes and to develop strategies to prevent similar issues from arising in the future.
For an informal and confidential chat about how ImprovIT could help you get your supplier relationships back on track, contact us today at information@improvit.com. Or take a look at our approach and case studies of recent projects we’ve worked on.
We had so much we wanted to say in this article, that we’ve had to create a part 2! This focuses on how you can evolve your strategy and structure your team to deliver maximum value from your supplier relationships. You can read it here.
