IT Innovation versus Extortion

Michael Vizard

One of the things that far too many IT executives don't like to talk about is the strong-arm sales tactics that some of the major vendors will resort to when they don't get their way. When the sales team of a major vendor discovers that a particular deal isn't going to go their way, there is a natural tendency to want to appeal the decision to a higher authority. In most cases, that means going over the head of the technology decision-makers to get to the business decision maker. And on more than one occasion, it also means trying to get the technology decision makers replaced.

IT vendors are forever telling technology decision-makers that they can help them sell a technology to the business. That usually means courting the business leaders of the company during golf outings and setting up expensive dinners when the CEO of the vendor just happens to be in town. But as vendors establish these relationships to get the business, don't be surprised when they try to use them to keep the business.

This creates a conundrum for the technology decision-makers trying to do the right thing for their company. Not only do they have to convince the business to fund the decision, they also have to prepare for the wave of criticism from the incumbent vendor that is about to be replaced. Unfortunately, the noise level associated with replacing an incumbent vendor is so high, many IT executives find that the path of least resistance is to not rock the boat. Most of the time, the business side doesn't understand the potential value of an innovation, so waiting for the incumbent vendors to finally get around to adding those new innovations frequently seems like the safer political bet.

Of course, this is tantamount to a form of technology extortion. So the question that technology decision-makers need to ask themselves is what is the real value of letting IT vendors establish relationships with the business management team when they know full well there will come a day when a price needs to be paid.

Not every IT organization is subject to this level of extortion. But the bigger the customer, the more this kind of strong-arm sales tactics factor into the equation. Of course, nobody wants to name the vendors involved. But if they have a billion dollars or more in revenue, chances are they have sales people that have over-stepped their bounds on more than one occasion, usually at the expense of smaller startup companies bringing some new innovation to market.

What's really needed, of course, is more focus on ethical sales practices in the IT space. But in the meantime, the next time you see a technology-decision maker with the intestinal fortitude to stand up for what they believe in, shake their hand whether you agree with them or not. More often than not, you have no idea how much courage went into making that stand.



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Apr 16, 2010 3:04 PM Anonymous Anonymous  says:
When I first came onto my job two years ago, I saw that the vendor hosting our primary line of business application was seriously underperforming. I tried to politely address it with the vendor's technical team and account manager within the first few weeks of my job, but the account manager was so used blowing smoke up or CEO's backside whenever there was a service issue that he felt it would be easier for him to convince the CEO to fire rather than fix the problem. I was able to keep my job and my title, but the underperforming vendor was still providing an underperforming service, and the little "political capital" I had gained in my few weeks on the job was destroyed over the course of a phone call and a game of golf. Of course, the vendor continued to underperform, the users continued to get more and more angry, and I continued to document the problems in great detail, including cost overruns, downtime, and service desk calls. Over the next year and a half, I completed several important projects, drastically improved the company's operations, managed to rebuild my reputation. The CEO finally started seeing me as the valued member of his management team that he had hired me to be, and not just "the IT Guy". When I laid eighteen months of well-document problems with the vendor in front of my CEO and showed him how we could save substantial sums by switching to an alternative service provider, he authorized me to cancel the contract. In retaliation, the vendor tried to hold our data hostage. Fortunately, a few days before notifying the account manager that we were cancelling our account, I had convinced the vendor's technical staff to give me a backup of our data for "internal development purposes". When the account manager called the CEO again to get me fired, my boss laid out the "evidence" I had prepared and told the vender to take a hike. So, the lesson I learned was this: make sure you have the "political capital" and a well documented business case that makes it clear to your boss that a few games of golf and dinner aren't worth getting in bed (or staying in bed) with an underperforming vendor. Reply
Apr 16, 2010 3:04 PM Anonymous Anonymous  says:
Great read Mike. You would be surprised to know how deep this funnel runs. Enjoy your weekend. Reply
Apr 16, 2010 5:04 PM The IT unemployment line. The IT unemployment line.  says:
Spot on! Hello from the IT Manager unemployment line. I�m sitting here with others of equal character, intestinal fortitude and an equal number of dependents. I lost my job after taking exactly such a carefully and well-documented stand. The well-financed vendor�s outrageous non-performance was at issue here. Yes, after many good years, one phone call can undo years of political capital you build. Do spend lots of time prepping for this event - your career shall be targeted for destruction. Yes Virginia, this is the price for playing with the big boys and big contracts. Unlike smaller contracts, this behavior is a given with the big contracts. This is why IT Managers must have but do not enjoy effective legal employment protections against these tactics. It's just not in the cards. Advice: Prep your resume, look at your kids and decide if it is worth it. This is the battle of your life. If you're at this point, your organization knows the vendor�s product is a dog with fleas. Plan ahead the salvos. Draw up the talking points and the roles your management and users alike as they must play roles in each of scripted salvos that will ensue. Rehearse the talking pain points with your top management and your high-visibility end users as they must be convincing at a gut level in their arguments. Yes, they, not you, will be having that conversation. Be patient, hold your opening salvo until 1. you have a good performance evaluation on file with personnel, 2. a couple of letters of reference from the management team and 3. that you are certain the end-users are emotionally committed to this course of action. Once the trigger is pulled, sorry pal, you will not control events anymore, everything goes on autopilot with others will be deciding your and others fates. Listen to your friends in accounting about updates around planned personnel funding levels. You can fully expect your preparations to be leaked to the vendor�s sales team as your users and management fumble the delivery. Strong arm extortion tactics and trashing of the IT point of contact is definitely a well-worn chapter in the sales playbook. As a consolation before surprise exit interview, we managed to initiate a wholesale restructuring of the vendor�s management team - the vendor's account rep, the regional manager, the entire helpdesk staff and their management, three inept PMP-certified project managers assigned to us and, yes, the CEO were all replaced. We got a face-to-face with the new CEO, his personal cell phone, landed solid project manager and drove the upgrade project to successful closure. Reply
Apr 17, 2010 3:04 AM Anonymous Anonymous  says:
n\a Reply

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