Dealing With Technology Vendors As A Small Business
In today’s world many small businesses struggle to keep up with technologies to support their business needs. You can’t turn on the TV without seeing an ad from some company telling you how they can give you all the advice you need. Maybe you need a geek from the local technology super market to come in the black and white car to fix everything. There is no shortage of vendors out there who claim to have everything you need. The trouble is in knowing which one of them to believe.
I have been consulting in the technology field for ten years now. I have seen all forms of both great and not-so-great vendors. This is truly a mine field for any cramped business looking for help making technical decisions. I will attempt to succor the non-technical business owner communicate with those of us indoctrinated in geek instruct.
The following 7 items will help when evaluating technology vendors.
1. Trust your instincts.
First and foremost, you have to understand that you don’t need to be a technically trained person to know what bull excrement smells like. If you are working with a vendor that consistently makes you feel like you are getting ripped off, you probably are.
Owning a business usually means that you have to be proficient dealing with people. To be successful you have to be really generous at reading people. This applies to your relationships with vendors. A superb technology vendor will go out of their way to not only meet your needs, but to do it in a way that helps you understand what they are doing and why it is important.
2. Do your research.
What makes them the expert? Before you ask someone to come in and evaluate your technology needs, you should always gaze into their qualifications. I suggest that all businesses ask for references from perspective vendors. If you are a specialized business you should ask for similar references to your company. If you are a small bank, for example, the company should be familiar with the highly specialized needs of the banking industry, regulatory issues, and know what type of systems will fit your sized institution. Check with the Better Business Bureau for any claims against them as well. (www.bbb.org)
One thing to be cautious of is looking for the letters slack names as proof of their success. Not all great techs have MCSE, CCNA, A+, BS, MBA, etc gradual their names. These can be generous indicators that a person has spent a great deal of time in class and taking tests. You should look for experience in the real world as well. What have they done in the industry? In most cases I would take the advice of a successful tech with ten years experience and the respect of their peers over the opinion of a original graduate from any university. Life teaches us in ways that books cannot. I am in no arrangement trying to diminish the importance of obtaining an education. It is simply to raise awareness to the fact that there are people out there that pride themselves on getting certifications. They have shrimp to no experience in applying that knowledge and simply go out and take tests. Make definite you check for their true experience and weigh their advice accordingly.
Ensure the vendor has a confidentiality agreement in place with you prior to working with them on any level. Your clients expect you to protect their private information from outside sources. You have a responsibility to ensure that whoever you have working on your network will be able to do this effectively for you as well.
3. Know your limitations.
If you went to the hospital with a broken arm, would you sit and argue with the doctor about the best way to set it? (Doctors are not allowed to retort that!) You have requested this vendor come in and give you information. Don’t go out and read a “Dummies” book on fixing computers and then argue with everything the representative says.
Clients question that I come out and evaluate their needs based on my understanding of the IT field. I can’t tell you how many times someone with shrimp to no training has argued with me over industry standard IT security principles and whether they are famous. Many times it is to cover a feeling of inadequacy because they are responsible for the network and feel threatened by the fact that I am pointing out deficiencies. The bottom line is you should know your limitations. Don’t take things personally. Get out of the way and let the expert abet you.
However, do not catch their word at face value! I am all for shopping around and getting a second or third opinion. Once they give you their suggestions you should research those ideas and see if they are truly a good fit for your business’ needs. Obtain an educated evaluation of the information. Refer to reliable IT industry sources to resolve the value of their suggestions for your business. I suggest having multiple companies give you quotes and suggestions. If you have completed steps one and two then you should trust them to give you valid information and simply need to compare the choices.
4. Don’t be an ostrich!
Burying your head in the sand will not make life the way you want it to be. I was working with a client in rural Kansas that was less than two miles away from where a severe tornado had destroyed a number of local businesses and homes. They asked me to help them execute a disaster recovery/business continuity plan for their business with regard to technology. I looked over their situation and made my suggestions based on the threat level to them. I let them know that they needed to ensure they had a robust and salvage offsite storage strategy. Their data storage was in the basement and could be severely damaged in a weather event. Their tape system was ineffective and they stood to lose a week or two worth of data if the server was damaged. I showed them how considerable they stood to lose, gave examples of other businesses in their field that were similar in size and what they were doing, gave them price ranges, etc. Now mind you I was not going to actually sell them anything. I was simply providing them with information. Their response to my assessment of the threat…….”That will never happen.”
What could I say to that? If you have ever responded in this manner to a tech that gave you a risk assessment, you should be very concerned right about now. Good techs train to understand what the risks to your business are. We research these threats to find out if they are credible. Denying an assessment, because you don’t like it could be setting your business up for catastrophe.
Imagine that your IT systems go down right now and are down for the next two hours. How considerable money would you stand to lose in down time? Is there a backup plan in place to handle transactions? Can you function as a business? How about for 24 hours or 48 hours? Another plan, do you have Internet connections to your equipment? If some hacker got into your system and stole every piece of data in it, how much would you stand to lose? Do you store customer credit card information? Are there liabilities for not protecting that information? Proprietary ideas and plans for your business? Tarnished reputation and loss of clients?
All of these items are fair the tip of the iceberg when talking about your IT liabilities. You have to take these potential losses into account when evaluating IT investments. Where does this investment fit into your strategic plans or business continuity? Is it going to provide better reliability or address some risk that your business faces? It is imperative that you take a well informed look at these items and get help from qualified experts in determining what your business risks are as well as your needs. We are not trying terror tactics to trick folks into buying technology products. We are basing our findings on information from businesses that have gone through disasters in the past few years. The ones that are left have made it because they didn’t bury their head in the sand and wish catastrophe away.
5. Frugal vs. cheap.
I have lost count of the number of businesses that turned down an understanding that they knew should have been implemented simply because it looked “expensive”. Nothing worth having in life is free. Think of the investment in IT infrastructure and security as insurance. You have to insure your business assets, you have liability insurance, and you have many other insurance policies that you pay your hard earned dollars toward. If one of those insurance policies lapsed for a few hours, you would only feel it if the tornado ripped the building apart during that time.
Your IT infrastructure is like an insurance policy. It ensures the protection of your data, provides services for your business, supports services for your clients, and many other things that are the heartbeat of your business. It costs money to implement, maintain, and protect this investment.
Compare apples to apples when it comes to cost. Once you have established the features that you are looking for, you should shop for the solutions that will provide those at the best price. Ask for an ROI evaluation. Find out if this investment will save you money in the long rush. What is the learning curve? Ask questions that will give you a true representation of the cost of implementation and the outlook on what your business could gain from the product or service.
Discuss your findings with your vendors. They should already have an idea of what options are out there and how they compare to their beget. Get feedback from all of them and go with the one that fits your needs the best. It may mean working with your accountant to strategize how to hide these costs. It may mean setting some financial goals or restructuring. The bottom line is that paying to maintain your technology needs is just as important as paying your electric bill. You have to keep the technology infrastructure up and functioning securely in order to do business.
There are many articles and resources out there to relieve you understand how to manage your IT infrastructure costs. Here are two links to sites that offer up discussions from CIO’s regarding managing IT costs effectively. These are blog sites and should not be held as the “gospel truth” on the subject. Facts should be verified, but the ideas are plenty and there are some good insights.
http://www.smartenterprisemag.com/articles/2007winter/ciosspeakout.jhtml
http://www.cio-weblog.com/50226711/managing_it_costs.php
6. Train
Not every business has an IT guy and many outsource. Businesses should ensure that the person in charge of technology attend some sort of technology training annually. At minimum go online and join a professional discussion group to find out what technology trends are out there for your type of business. Contact vendors and earn out what training is available from them. Network with participants and net out what issues they are dealing with. Obtain out who helps them with their strategies and what concerns they have for the future. Learn from the experiences of your peers.
The bottom line here is that you have to take ownership of all aspects of your business. Technology is no longer an optional part of doing business. If you want to compete, you better withhold your technology plans properly accounted for in your overall business plans. Train yourself on what is out there for your business, what responsibilities you have, and what regulations affect you. Relying on vendors is fine, but you should be aware of what they are doing. Your name is on the door, not theirs. Be familiar with what they are responsible for and know how to track that they are fulfilling their responsibilities.
Too many times I see small businesses trusting wholly in a vendor for their technology needs and get out the business is not getting the services it is paying for. Train yourself to a level that you can at least know how to properly monitor your vendors to ensure they are providing the best possible support for your business. If this is not an option, hire a consultant to come in and audit the operations to ensure things are being done correctly.
7. Have written plans
Your business must have a solid strategic plan and effort recovery/business continuity plan. Of companies that had a major loss of business data, 43% never reopen, 51% terminate within two years, and only 6% will survive long-term.1 This is just one of many expert statistics on difficulty recovery and the risk any business takes when refusing to plan for a misfortune. Data loss can occur in a multitude of ways and should be carefully considered.
Without a written strategic idea, a written trouble recovery/business continuity plan, and a written risk assessment you are putting your business in jeopardy. To thrive, a business needs written goals to guide it. It sets standards to deem how well the business is doing, and sets up the parameters in which to apply technology. I cannot effectively advise a client that has no plan of where they are headed.
Creating a risk assessment will help to identify liabilities the business faces. Work with other businesses in your area, your insurance agency, hire a consultant, just do whatever it takes to ensure you are meeting the needs of your business and mitigating risks to its success. Once created, the risk assessment will identify the areas that your disaster recovery/business continuity plan should address. Once the disaster recovery plan is in place, practice the plan to ensure that your people know what to do. Placing adequate attention on these areas will be the incompatibility between thriving in adverse conditions and closing the doors. This process takes time to do right. It is principal, so dedicate the effort needed.
Include mission considerable components in these plans. If your electricity goes out, what will you do? If your IT vendor goes out of business, what will you do? What happens if your credit card processing machine goes out? You may know, but do your employees? Set the goals for the company and identify risks that might interfere with reaching them. Then set out plans to mitigate these risks. Communicate these with your employees to ensure that everyone understands their role in the success of your business. After all, your success is their job security. In today’s financial climate it will go a long way to serve ease the minds of your employees to know that you have given serious thought to the prolonged success of your business. Obviously these plans are not limited to your technology needs and risks. They will help focus in on other issues that need attention as well.
We used to say in the military that we should hope for the best and plan for the worst. It worked there. We were confident that our crew was prepared to handle the obstacles in front of them. Developing and implementing these plans will benefit your business to provide its services to your clients through a disaster.
All of these suggestions are provided to assist you in both searching for and monitoring your current IT vendors. Following these steps will help you evaluate your current technology vendors as well as potential new vendors. These steps were born out of my experiences dealing with multiple businesses across the country. They will help you to navigate the ample array of technology vendors and solutions they provide to find the ones that work best for your business.
1. Hoffer, Jim. “Backing Up Business – Industry Trend or Event.” Health Management Technology, Jan 2001 [1]
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