How To Pick a Technology Vendor: Top 6 Questions to Ask

This article by Mike Pierce was originally published on the blog for Future Point of View, Scott Klososky’s consulting firm.

Choosing the right technology vendor partner has become a critical skill for business leaders to master. When companies decide to digitally transform their company and find that they lack the skill and staff to do it, they seek technology vendors to help round out their teams. But how do you pick the right vendor? And how can you be sure that what you hear in the sales presentation is what you will get after you sign the contract and the sales team disappears?

There is no simple answer. Selecting the right technology partner is much like choosing a spouse and should be approached with (almost) as much thought and deliberation. The right choice can set you up to gain strategic competitive advantage while the wrong one can lead to frustrating, budget-busting, and poor quality results. More importantly, the wrong choice can severely slow the momentum of your digital transformation. Following a rigorous and systematic process is important. At a minimum, you may create scorecards, look for online reviews, and depend heavily on personal intuition.

But how can you be sure you’re picking the right vendor? Well, you can’t, but there is one step in the due diligence process that can give you a glimpse into what life will be like after you sign that contract: references. Vendors will (almost) invariably provide glowing references they are confident will tell stories of their unending glory. Expect it. But don’t accept that it is the full story. With the right questions, you can probe deeper and encourage those references to shed light on the problems they wish they had avoided, or how the vendor helped move tough issues to resolution. Even amidst glowing reviews, these nuggets of insight can be extremely valuable to your vendor selection and contract negotiations.

Here are 6 questions you can ask those references to evoke the most meaningful insight:

1. Did you get all of the functionality you expected from the initial project, or were unplanned follow-on projects proposed to complete work you thought was already included?
   Follow-on projects are expected in most large initiatives. But you want to understand exactly what results will be achieved in the first project and what will be in follow-on projects before you commit. Too often, vendor sales teams have a tendency to promise it all in order to get your signature before their implementation team comes in and drops the “reality” bomb in your lap.
2. Did they complete the project within the original cost and timeline estimate provided prior to contract execution? If not, why not?
   It’s a simple question with big implications. There are a lot of reasons why a project doesn’t come in on budget. What you want to know is whether they felt they had control of the budget as the project progressed. When you bring on a vendor who promises to deliver on the cost and schedule estimate they provide, you expect them to hold to that budget. So it’s important to understand what control you have as project scope and expectations change.
3. If there was an increase in the budget due to a “scope change”, what prevented you from anticipating that change before contract execution?
   This question is important because more often than not, the scope you agree on with the vendor will not be exactly the same as what ultimately gets delivered. Throughout the project, you will be faced with decisions about whether to drop something from the scope in order to meet the original estimate or add something that you discover along the way. By asking this question, you can get some insight into how good a job the vendor does understanding what you want and need before agreeing to the scope you contract them to do.
4. Were you happy with their performance during the project (design quality, communications, etc.)? Why or why not?
   It’s pretty obvious why you should ask this question. Some vendors invest a lot in their marketing and sales pitch. Too often, after the deal is done, you may find yourself working with a completely different team of people. So this question can uncover whether the referring client was happy with the vendor once the sales team had an executed contract in hand. Don’t settle for a simple yes or no response to this question. Be sure to ask follow-up questions to understand how they handled conflict, miscommunications, and alignment. These problems happen in every project, so you should seek to uncover how the vendor may respond to them in your project.
5. Do you still work with the vendor today? Do you have alternative vendors that could do what they do for you?
   With the first question, you want to understand whether the former (or current) vendor client was so satisfied with their work that they continue to go back to them for help. This will tell you two things. First, were they happy with the results of the initial project? And second, do they require the vendor on an ongoing basis to innovate? This is important because you want to understand whether you will be “locked in” to this vendor once you start down the road of innovation with them. This is why we ask the second question. Does the client continue to work with the vendor because what was built is so customized that no other vendor could support it, or do they continue the relationship because it’s a good fit and a productive working relationship?
6. If you could do it all again, what would you do differently prior to executing the initial contract/SOW?
   Now you are looking for advice. Since they have been where you are and made the decision you are trying to make, ask them to help you avoid the pitfalls they fell victim to. There are some problems you simply cannot anticipate and would only discover through experience how to avoid them. Vendor references (even glowing ones) provide a real opportunity to learn from the mistakes of others.

Interviewing references is just one step in a long due diligence process to pick the right vendor. But when it’s done well, you will discover valuable insights that the vendor won’t tell you directly and the reference may not offer unless you probe specifically. One more thing…, don’t be afraid to ask a vendor for additional references if the ones provided fail to give you the insight you need to make a well-informed decision. Just as it is with a marriage, you’re going to have to live with the choice you make and all the challenges that come with it. So choose wisely!

A former CEO of three successful tech startup companies and principal at consulting firm Future Point of View, Scott Klososky specializes in seeing beyond the horizon of how technology is changing the world. His unique perspectives on technology, business culture, and the future allow him to travel the globe as an international speaker, consultant, and author, working with senior execs in organizations ranging from the Fortune 500 to universities, nonprofits, and countless professional associations and coalitions.