In my post yesterday about maintaining vendor relationships, many of the points below were discussed or implied. I thought today I’d take the time to just list them out fully and and explain the thinking behind each one. As I’ve said before, in a Senior IT Management role, vendor management is a critical component in many cases, so it pays to have a solid strategy and game plan for dealing with vendors.

1. Engage with your Account Manager

With each of your vendors, the relationship between yourself and your account manager is the most important one you’re going to have. If Vendor Management is important to you, then you need to build and maintain this relationship. Think of it like gardening, a little bit of work here and there on a regular basis will ensure the best results. That means catching up on the phone occasionally, having coffee once in awhile. Just treat them like a person as opposed to some Terminator-class selling machine sent from SkyNet.

2. Learn the Organisational Hierarchy

Think strategically – knowing the inside organisational structure of your vendors is a really great piece of information to have. You need to keep abreast of this obviously as things change, but I can tell you, every now and again something gets stuck in the machine and knowing how to climb the tree and get to the right people in the vendor organisation is usually a great way to get things moving. One caveat, never use this AGAINST your account manager, nobody likes someone going over their head, this should be used to help you and the account manager when their organisation is not working properly for your relationship.

3. Work out their Financial Periods

There are some extraordinary deals on the go at the end of quarters and end of financial year periods with most vendors. If you are looking to buy something and you know that if you wait a week or two you’ll hit that end of quarter sweet spot, you can save a bunch of money. A couple things to bear in mind: first, the end of the quarter usually means a week or two from the end of a particular month because under accounting rules, to recognise the revenue, the vendor has to “ship” the goods; and secondly, keep abreast of how your account manager is doing for the quarter against their targets, if they are doing poorly, you might get an amazing deal, if they have met target early, you might see them trying to push the deal into next quarter so you should respond accordingly.

4. Go to Events & Participate

Social Networking only gets you so far, it pays dividends to go to your key vendors various events and do some networking. If you’re invited to speak or somehow participate in the event, you should try to do it if possible. It is good for your career, but it is also good for your company’s profile within the vendor organisation and your account manager gets kudos for having built such a great relationship. This activity is, to use the gardening analogy again, like spreading super fertiliser on your garden, it just adds enormous value.

5. Have Expertise in the Product Area

With your major vendors, it is critical that you or someone on your staff knows their product range back to front. As someone who is reasonably technical, I’ve always found it helpful to learn as much about the vendor products technically as I can. The main advantage is that your account manager will know that they can’t blind you with awesomeness of their newest whiz-bang flux capacitor, but also when something goes wrong, you often find the vendor just puts you directly in touch with the people who can help you as opposed to trying to filter things.

6. Occasionally Leave a Bit on the Table

Business is tough and budgets are tight, but as a Senior IT Executive you need to be playing the game for the long term. The best poker players will often tell you that they occasionally play out a bad hand for low stakes and let an opponent take a few extra chips off them to set them up for a bigger pay off down the line. You need to think like this. If you’re buying a dozen laptops, leave 1% or 2% margin on the table for your vendor because somewhere down the line when you’re buying a new SAN, you may want to shave them as close to the bone as possible and they’ll accept that because they believe the relationship is profitable overall.

7. Do Press!

If a vendor asks you to do media with them on a particular deal and your company allows it, go for it. Again it is good for you personally, but in terms of the deal and relationship it is worth money. If I’m buying something or signing a multi-year contract and there are a few outstanding difficult points to negotiate I almost always offer to do press.  I put that offer forward because it is an unexpected win for the vendor and once they take it, they need to trade something back. I always get a few more nuggets out of a big deal this way.

8. Show Your Teeth

I always want to be considered “tough, but fair” by vendors I have a relationship with. You don’t get that reputation by being the all-singing, all-dancing happy customer at events and weeping when you account manager has a baby. Every now and then, when something goes wrong (and it always does in every relationship) I show my teeth. I will rip into the vendor and give them a serious beating. Most of the time its even pre-meditated, I know something is going wrong so I bring them in to shake them up. I always give them a way to make it right and in 99% of the cases they do. If you can combine this with knowing their hierarchy (point #2) and/or showing some product expertise (point #5) this really drives the message home. Afterward, you should make an effort to demonstrate there are no hard feelings and that’s how you get the “tough, but fair” reputation you covet.

9. Know the Enemy!

In my post about vendor management I talked about understanding your key vendors’ competitors. I rarely if ever throw out the suggestion of going to a competitor of a key vendor, but equally, you have a responsibility to understand the alternatives. The other thing is, you can’t always control what your vendor will do – I recently had a case where despite being their largest customer in Australia for a particular product, I had a vendor tell us that they weren’t going to meet us halfway on a deal and we could pay list price. These situations happen and when they do, having a cordial and working relationship with an alternative vendor is good risk management.

10. Be Transparent

This is a strange one for sure. When I’m looking for a deal and for some reason, maybe the budget isn’t there or it is something I’d like to do but don’t need to do, I usually lay my cards flat on the table and tell the vendor the whole truth. I take it that I have nothing to lose, and if they can’t come to my position, I have no room to move, so let’s not waste time. More often than not you get what you want, but every now and again, it doesn’t happen. I have always found this approach builds mutual respect. You don’t use it all the time, sometimes its important to have an ace up your sleeve for leverage, but I never try to blindside a vendor either. Try and build an open and honest relationship with your key vendors.

And that’s it really, those are my top 10 tips for dealing with vendors. I’m sure a number of you out there have your own ideas and strategies. Please post your thoughts in the comments, I’d like to read them and hopefully learn something.