Keys to successful vendor management

What makes a great vendor-client relationship? If you are in IT management you have probably experienced ones you thought were model relationships and ones you wish you had never gotten into. After 30 years in health IT management I have seen the full range.

HandshakeI’ve been on both sides of the table over the years, I’ve been a buyer of products and services as CIO. I have been a seller of products and services with a software vendor and a consulting firm.

I always tell prospective vendors that I understand their business models. I don’t want to waste their time or mine.

If we don’t need their services or products at this point, I will tell them so. No need for further conversation. But it’s always good to keep the door open for the future: needs may change and their solutions will evolve.

If we need what they are offering and can achieve a win-win agreement, great.

Whether it’s your core electronic health record, a niche departmental system, a new innovative add-on product, or your core infrastructure vendor – how you approach vendor relationships has common elements. Whether it’s a large, proven vendor or a small start-up, here are some key success factors:

  1. A good product roadmap: It should be clear what core solutions are available now and what their path forward is for the next several years.
  2. More service than sales – a strong service culture should be evident in the sales cycle and demonstrated throughout the duration of the relationship. A focus on service should be engrained in every one of their employees.
  3. Total Cost of Ownership (TCO) – you and the vendor should develop this together. It should  include initial one-time fees, ongoing costs for their products and services, all required 3rd party products, and your internal staff. There should be no hidden costs or gotchas later.
  4. Reputation – be sure to do your in-depth reference checks. Colleagues in similar organizations are a great source of honest, candid information and experience – good and bad. If your vendor is going to host or manage the application/service for you, check on the change management and operational maturity with colleagues and references. Resources like KLAS, Gartner and others can be leveraged as needed.
  5. Solid contract –once it is negotiated and signed, you may never have to look at it again. But if you do, ensure you are protected.  There is growing market consolidation among larger vendors; start-ups are often acquired by larger firms. Ensure you are protected under these scenarios. Ideally you have someone in your Legal or IT department who focuses on technology contracts and knows the common issues and standard terms.
  6. Implementation – your vendor should provide onsite resources that are integrated with your internal team. Issues tracking and resolution is a joint effort. Status reporting should be a shared effort with a very objective, accurate view.  It should include an executive dashboard on status, milestones, issues and budget.
  7. Escalation – problems will inevitably occur. Escalation process should be clear from the start with a point person for both the vendor and your organization.

Technology and health care are both in a constant state of change and evolution – that’s one of the reasons our work is so exciting! Do your due diligence in vendor evaluations and make sure to select vendors ready to partner and evolve with you.

3 thoughts on “Keys to successful vendor management

  1. Cindy Danko on said:

    Great points! …the inclusion of Performance Metrics as well as detailed Disaster Recovery Plans, both of which assist in setting expectations and assuring your time to recovery is defined to meet the needs of both parties.

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