Lies my vendor told me: Tech relationships gone wrong

IT-vendor relations often start out sweet and turn sour. Learn how to avoid a similar fate from these tales of woe.

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The president "would tell a small business of maybe five users that didn't have particularly critical data that they needed a firewall. Then he would take an old computer that had been discarded and was ready for recycling, load it up with firewall software and sell it to the small business for $500," recalls Peacock.

"This firewall would require tending to once a month or so, which would generate an hour or two in service calls; even if the call was 15 minutes, he charged $100 for the hour." Since most of the people the company sold to didn't have technical expertise, it was hard for them to argue with the president, because they needed his company's support to keep the product running, says Peacock, who is currently looking for work.

Bypassing the IT department

One way vendors avoid having to wrangle with IT is to go around the group entirely, says Mike Paradis, former CIO of Deutsche Bank Alex. Brown.

Technology companies have long seen the value in selling directly to the line-of-business managers, says Paradis, now an executive coach at CPI/New Options Group in Sparks, Md.

In heading up remediation programs for Y2K compliance in the late '90s at Deutsche Bank Alex. Brown, Paradis discovered that different business units had purchased and installed software without the IT department's knowledge or approval -- and now it wasn't Y2K-compliant, he recalls.

In another job, as database administrator for a large financial services company, Paradis at one point found himself having to support six different database packages to suit the needs of various systems purchased by line-of-business managers.

"Salespeople are very good at convincing business line people," he says. "They sing and dance, and the next thing you know, the business line has a product it can't support."

To combat that disconnect, Paradis suggests that both line-of-business managers and IT be involved in the evaluation and purchase of new systems, with IT taking the lead to ensure that the product will live up to its claims technically and integrate with existing technology.

Canceled contract, personal attacks

Sometimes buyer-seller relationships are so strained that it becomes personal.

Eric Prosser had been CIO of Tulare County, Calif., for two years when it came time to renegotiate a 15-year-old contract with the service provider that was managing roughly half the county's IT resources. The outsourcer was angling to take over management of the entire county's IT resources, which would up the contract's value from $8 million to as high as $15 million, Prosser says.

While it would have made his life significantly easier to expand the contract so he could manage only this one outsourcer, he was not convinced that such a deal was the best thing for the county.

What's more, the outsourcer's proposed new contract -- which included technology such as VoIP to lower costs for the county -- ended up including fewer actual services for nearly double the money.

Prosser recalls, "They weren't coming to the table with innovative things; they weren't excited about the technology. They were jaded and cocky; they thought they had the contract in the bag."

Faced with all this, Prosser made his decision. And instead of getting a contract twice as big as the original one, the outsourcer lost the contract completely.

To gain those cost savings he had been looking for, Prosser took management of the county's IT resources in-house and hired away from the outsourcer several IT people whose work he was happy with.

The outsourcer "told us we wouldn't be able to [manage IT resources in-house] and save money, but we did," Prosser says.

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