In the IT business world, software development vendors have garnered a bad name for themselves. Client’s frequently feel that vendors are only out to take money and time from them. Sadly, this feeling is often accurate. There is a considerable percentage of software vendors out there who knowingly aim to take advantage of their customers. In a recent article, Computerworld claims that in the realm of vendors/consultants, “IT consultants are among the most slippery of the bunch.” The article goes on to outline some of the common practices that have contributed to this bad reputation. “Among their favorite tricks: Using “scope change” to line their pockets, claiming expertise they do not actually possess, promising you their superstars and then sending in the rookies, purposely delaying decisions and sowing confusion as they rack up billable hours, and collecting kickbacks from other service providers. The worst ones may even hold your company’s intellectual property or systems hostage until you pay up.”
Over time, these practices have damaged the vendor-client relationship. But vendors can’t take all the blame. Clients have also contributed to the demise of this partnership. When each party is exclusively concerned with their own interests, everyone suffers. Yousef Awad, CEO of custom software development firm Integrant, explains that, “Businesses will often make the mistake of thinking a vendor should be able to provide comprehensive solutions to their operational challenges without participating in the design and requirement gathering phase. If the client doesn’t take the time to provide enough information about their needs and challenges, the vendor won’t be able to offer an adequate solution. At the same time, however, vendors must guide the clients by asking the appropriate questions.”
Many factors have contributed to the deterioration of the vendor-client relationship over the years, but the one I want to focus on is collaboration. Time has proven that vendors and clients don’t always put enough mutual effort into collaborating on software projects. Unfortunately for everyone, poor collaboration will almost always end in dissatisfaction for one party or the other, despite the quality and integrity of a vendor. So, what can be done to mend this partnership?
A successful software project will require both the vendor and the client to operate on a basis of mutual trust. From the beginning, vendors must build a foundation of trust by proving to the client that they have their best interest in mind. Clients should feel confident that their vendor fully intends to help them achieve their business goals. There are many ways this can be accomplished. One way is to share relevant information that will help inform and advise clients. I’m not talking about marketing the service or pushing how great their company is. I’m referring to things like white papers, case studies, and blogs that offer valuable insight that will benefit businesses. Sharing this type of information with potential clients also gives the vendor a chance to reveal their methodology and approach to building software.
Another way for vendors to build trust is to allow the client an opportunity to test drive their services. Clients shouldn’t be obligated to sign a contract right away without having a fair chance to determine whether a vendor is a good fit for them or not. The test period doesn’t necessarily have to be free, but it should be structured in a way that doesn’t obligate the client to continue if they’re unhappy. One thing we do at Integrant is give customers the option not to pay for the high-level analysis phase if they don’t receive the value they were looking for. We don’t feel it’s fair to ask them to pay for something that doesn’t bring them value. In any case, we find that most customers do get the value they need and they choose to continue with us. What’s important, though, is that we are able to meet them on safe ground and allow them the freedom to continue the partnership or not.
Likewise, the client also has to participate in the collaborative effort. If you are a client entering a vendor relationship, you must foster an honest partnership by being open with them. Share your budgets and your agenda. Make yourself available when necessary, and provide adequate information about your operation. If you hold back with budgets and objectives, or if you don’t offer enough feedback on the work that’s being done, the vendor can’t respond appropriately. This has great potential to compromise the end result, and it increases the chance of getting a system that doesn’t meet your expectations. However, if you can communicate effectively with your vendor and provide them the information necessary, they will have a much easier time giving you what you need.
Another very critical element to the vendor-client relationship is sharing risk. Again, this will require effort from both parties. For the vendor, it means being just as invested in the budget and timeline of a project as the client. We often see software vendors who utilize a Time and Material billing model. This puts most of the risk on the client, because the vendor has no incentive to finish on-time and on-budget. The longer the project lasts, the more money the vendor makes. So there’s not enough motivation for them. We suggest doing each phase on a fixed bid . This way the client has the security of knowing exactly what the project will cost them (barring a change order), and the vendor has the incentive to keep the project on-time and within the agreed budget. If the vendor takes longer than their proposed schedule, it costs them money, not the client. Likewise, if they finish early, everyone reaps a benefit.
For the client, sharing risk means approaching the project as a win-win scenario for themselves and the vendor. That is, rather than trying to squeeze the vendor for as much cost reduction as possible, they should be willing to pay a fair price for what they expect in return. If a client constantly pushes for lower rates, the vendor will be limited with the resources they can afford to use on the project. Ultimately this can affect the quality of the final product. So clients should pay fairly and allow the vendor to benefit from the partnership as well. This promotes healthy collaboration and ensures that the vendor has adequate means to deliver quality software.
So regardless of which side you’re on, consider the impact that good collaboration can have on your project. If you’re a potential client, be sure to spend adequate time seeking out a vendor that believes in sharing risk and earning your trust. As a vendor, explain to your clients the importance of communication and partnership.