IT Manager's Handbook: Getting Your New Job Done (43 page)

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The repairs could be costly and it's likely that the cost of a single site visit for a repair will be more than the cost of an annual contract.

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Vendors usually give greater priority to calls placed by customers with service contracts than to calls for T&M service.

If you go with T&M, make sure you set up the account with the vendors you'll use. By establishing a relationship in advance (knowing your customer number and site number and having the right phone number to call), you will expedite the process when you need to make a call.

Vendors' T&M Policies

To make sure you fully understand what you're entering into with a T&M policy, be certain to ask about the vendor's policies regarding:

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Hourly rates, overtime

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Minimum time charges

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Charges for travel

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Credit for defective parts that are swapped out

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Availability of parts

Warranties

The last choice for hardware support is the warranty that comes with new equipment. Warranties of up to three years are common. However, sometimes the warranty requires that you send the unit back to the manufacturer or bring it to an authorized repair center (although some equipment does come with an on-site warranty). But it's important to realize that most on-site warranties generally provide for a “best effort” for a next business-day response. Generally, vendors and/or their resellers offer upgrades for new equipment warranties to provide for higher levels of coverage.

When you're thinking about skipping a maintenance contract on a piece of hardware because the price seems too high, be sure to think about the cost to your environment and its impact on customers, users, clients, and business partners if that unit should go down. Consider a situation where a piece of equipment fails after business hours on a Friday. Your call may not even be handled until the following Monday, and a next business-day response would get you a technician on Tuesday. She may diagnose a faulty part, and its replacement has to be sent overnight from the warehouse for delivery on Wednesday. In this case, you've been down for five days. Throw a few wrinkles into the situation—a technician who doesn't show, a misdiagnosis, out-of-stock parts, a holiday, delayed deliveries—and your downtime could easily be a week.

6.5 Managing Vendors

Purchasing IT equipment has become more complicated as time has passed. The reasons for this complexity are because the players have changed, the metrics have changed, the information changes quickly (new versions no longer come out only once a year), and the sources for purchasing items have changed (nobody sends you catalogs in the mail anymore).

As an IT Manager, you will be buying a lot of hardware and software. You have a complex matrix of responsibilities that includes saving money for your company, getting the right resources to make the projects work, giving your employees the right tools, and meeting a series of overlapping deadlines that occasionally seem hopeless.

Establish a Relationship

Relationships between IT buyers and their vendors have now reached the level of maturity that buyers from other well-established industries—clothing, merchandise, food, and so on—have enjoyed and suffered from for a long time. Gone are the days of get-me-the-latest-as-fast-as-you can. Very few companies automatically upgrade to every new version of every product they use. Companies now make a determination whether an upgrade is worth the expense and effort and may choose to skip a version and wait for the next.

As a consequence, IT buyers get to enjoy, and suffer from, all the aspects of a more well-defined experience with their vendors. Companies don't buy as quickly or as blindly, nor do vendors come out with major upgrades quite as frequently. New versions are released, but the real functionality change often isn't as great as it once was (security and antivirus patches are notable exceptions).

Add to the mix the fact that the amount of money involved is exponentially higher than it ever was (and budgets on both sides of the table are tighter than they ever were), and you have the elements of a combustible experience. Your job is to make sure that if anyone gets burned, it isn't you.

Another complicating factor is the move to “computing in the cloud.” Well-accepted definitions of this term are still evolving, but it essentially means that your applications and data exist on the Web with a service provider. You buy (or rent) and run software over the Web. When new software is released, you do not get CDs, you get a link. The service provider takes care of everything related to the servers and also deals with the backups, application upgrades, redundancies, etc. Managing the costs and vendor relationships in such a virtual world is a new challenge. For a fuller discussion, see the section
“Cloud Computing”
on
page 148
in
Chapter 5, Software, Operating Systems, and Enterprise Applications.

Help Your Vendors

There is a second principle at work here: Put yourself in the vendor's shoes. In any conversation, trying to imagine what the other person is thinking can help your thinking. In buying situations, try to imagine what the vendor is thinking. Sometimes it can be obvious; he is trying to nickel-and-dime you and that's all there is to it. But sometimes you can guess his next move; if he drops his initial asking price, for example, he may have chopped a year or two off the length of the service contract.

Along those lines, make sure your vendors get paid. Track big invoices through your Accounting department so that you know your vendors are happy. Someday you'll need to ask them a favor, such as needing immediate delivery on an item that usually has a long lead time.

Remember that a vendor/client relationship is a two-way street. It may appear to be one-way, but it is in fact two-way. There will be times when you will be able to make or break a vendor's monthly quota, but there will also be times when you will need a server delivered over the weekend or a trial of the latest hard-to-find tablet device. In both situations, it helps both parties to view the relationship as one that can help each other rather than an adversarial one where only one wins at the expense of the other. Think of your primary vendors as strategic partners.

Request for Proposals

In many cases you know exactly what you want and you just want to order it, which is more often the case with purchasing specific hardware and software. In other cases, there may be special requirements. These can include things like installation, setup, configuring, and custom coding, etc. Or, you may have special needs, such as the work can be performed only after hours.

In these cases you would prepare a
Request for Proposal (RFP)
or
Request for Quotation (RFQ)
. An RFP is essentially a document detailing your requirements and asking specific questions. RFPs can be a single page in length or run up to 50 pages or more. They vary depending on the scope of the project and the number of concerns you have. They are an excellent way of ensuring that both you and your vendor(s) are on the exact same page as to what is expected, what's provided, what the costs are, and so on.

Similar to an RFP is a
Request for Information (RFI)
. An RFI is generally used to gather preliminary information about a vendor in order to see if they meet some basic requirements. The RFI helps narrow down the list of vendors that would get the RFP. For example, you may want to use an RFI to ensure that the vendor has a minimum amount of experience in a certain area, has a global presence, or has the sort of products and services you are looking for. Of course, you can ask RFI-type questions in an RFP, but there's no point in making a vendor fill out a lengthy RFP only to find out that they don't meet your minimal requirements.

Get Multiple Bids

If the product you're evaluating has competitors, you should always get multiple bids. Even if you know the exact make and model of the product you want, you should still get multiple bids from different resellers. Some organizations—government agencies, for example—are
required
to get multiple bids. In most cases there may not be a legal requirement, but it certainly makes sense in many cases to get more than one bid, especially for larger purchases. When you get multiple bids you're keeping everyone on their toes and showing others that you're conscious of costs.

Be warned if a vendor reacts negatively when you talk about getting multiple bids. It's a common sales technique to try and get the customer not to look at other options; any vendor worth their salt is going to understand you're shopping around. They will tailor their sales approach to your actions and not overreact when you bring it up.

When evaluating multiple bids, make sure you're comparing apples to apples. Are the part numbers the same? Are the maintenance contracts for the same duration and include the same level of support? Do the professional services cover the same items? (Note: This is very hard to do, but very important. One common technique for vendors is to blur categories to make their bids appear more competitive; don't take offense at this tactic, just take it into consideration—be very aware of it—when making your buying decisions.)

As mentioned in the previous section, RFPs are used frequently for getting multiple bids (especially on larger purchases) because they help ensure that each vendor is being told exactly the same information and being asked to provide the same information.

Set Up a Trial

In some cases, you may not want to make the purchasing decision until you've had hands-on experience with the product so that you can do a thorough evaluation. Many software vendors allow you to download 30-day evaluation versions of their product right off their website. Hardware vendors are also eager to deliver a device for you to try for yourself. In some cases, the vendor will work with you to set up the product or service. This works to your benefit as well as his—it reduces the learning curve and setup time and the vendor is sure that the product is performing optimally for you.

Reviewing Contracts with Vendors

Depending on the size of your organization and the size of the contracts (in monetary terms), getting formal legal help can be of great assistance in this situation. If your company isn't big enough to have an in-house lawyer, have the contracts reviewed by a legal consultant. Regardless, you should read the contract and be able to understand the following:

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What exactly am I agreeing to?

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How much am I actually paying?

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What are my liability and rights?

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What are the vendor's liability and rights?

In many contracts, the up-front portion contains some standard legalese that may go on for pages: issues of confidentiality, warranty, liability, applicable laws, and so on. This is the part you really want the legal experts to look at. They know if anything here is putting the company at risk. They will alert you to:

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Any wording that they're virtually forbidding you (i.e., the company) to agree to

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Terms that they're uncomfortable with (for these they should suggest alternatives)

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Terms that they're uncomfortable with, but recognize you're unlikely to get changed (although they will suggest you at least ask)

You need to turn your attention to the section called
Terms and Conditions (also called “Ts and Cs”
). As an IT Manager, this section of the contract deals with items that you're concerned about. This section might cover areas like:

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Service level guarantees or agreements (SLAs)

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Specifications of hardware and software

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Support, maintenance, upgrade terms

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Automatic renewals

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Ability to return/cancel if not satisfied

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Specific deliverables

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Associated costs, time frames, and so on

Everything is negotiable. Don't feel that just because it is on a form that you have to accept it. You may end up accepting it, but at least know that you can ask for changes. Remember that whatever promises your representative gave you are of no value unless they're in writing. If it is important to you, ask to have it included in the Terms and Conditions. Also, remember that by the time you get to the negotiating, your representative can virtually taste the commission he's making from this sale. At this point he almost becomes an advocate for you to his own Legal department. Take advantage of this ally.

Evaluating Alternatives

Today's technology environment is so complex and so charged with money that the number one rule of buying any technology product has to be: “Be prepared.” Products have gotten so complex—and systems they are designed for have gotten so complex—that a simple “Yeah, this server can handle 1000 e-mail users at the same time” kind of statement no longer flies. You need benchmarks, you want other clients' stories, and you have to have objective data; in other words, when it comes to functionality, you have to do your homework.

For important purchase decisions, set up a simple matrix that allows you to compare all of your requirements and options. An evaluation matrix, as discussed in the next section, doesn't make the decision for you, but it clearly outlines your options and locates them conveniently next to each other. A formal matrix is not required for every buying decision, and the cost and the importance of the purchase will naturally dictate how much effort you want to put into analyzing things before actually buying.