It is important to understand that you won’t know how good a systems integrator is until a few months into the project. By the time you realize there is a serious problem, it already might be too late. What can you do differently?
What follows are some questions you may want to ask your vendors — beyond the testimonials and referral checks.
For the top 10 projects executed in the past 12 months, what has been the delta (percentage) between the original bids and the final cost paid by their previous or current clients?
Unfortunately, there are a lot of systems integrators that can skim off more money on change orders rather than beefing up the initial bid. The idea is to get their foot in the door and then “work” the account. The response to this question will provide you some insight on what you can really expect to happen once the project is underway.
What is the attrition rate in the group that is going to deliver this project for you?
Attrition can’t be avoided. However, there is a red flag if there is an unusually high attrition in the group that is going to deliver your project.
Is the profitability of this project lower than the average project profitability in the past 12 months?
You always should try to negotiate a good deal. However, if you are the only party getting a great deal, it won’t stay that way for long. The systems integrator has to make profits out of this deal. In fact, the profits have to be reasonable so they continue to provide your account with the attention it truly deserves.
Can your vendor talk about three of their failed projects in the past 12 months?
This is an open-ended question. You want to observe how they respond to this question rather than what is in their response. I don’t need to go into the details of the analysis to the response but you will easily be able to figure out how realistic your vendor is about their achievements. If the vendor said that they never had failed projects in their lifetime that could (and should) ring some warning bells.
Can your vendor provide a few real-life examples of how their clients benefited because of the vendor’s project execution methodology?
Believe it or not, many times a project execution methodology is just “slideware.” It just stops there. This still may be fine as long as you know exactly how they will approach your project. The response to this question will throw some light on their standard practices in project execution.
What are your vendor’s strengths and weaknesses compared to their closest competitors?
If your new systems integrator has no respect for their competitors or if they state that they don’t have any competition it’s a red flag right there. There will always be competition and smart people recognize that.
For each of the new deals in the past 12 months, how many follow-on deals did the vendor close?
If the answer is none, you can quickly head to the exit. They can show you great testimonials and case studies but the real win is when their clients give them follow-on business. This is the true indicator of a satisfied client.
In how many of your projects in the past 12 months did the key project team members stay on until the end of the project?
“Bait-and-switch” is another common tactic of many systems integrators: They will bring in key members into the project team at the start and slowly rotate them out. By the end of the project, half of the “star team” may be missing.
Why is undertaking this project meaningful to your vendor?
Revenues and profits are important for your systems integrator. Without that, they won’t be in existence and you won’t have this discussion. However, if this project means something more than revenues and profits, you will get additional attention, which is always a good thing.
Rajesh Setty is the president of Foresight Plus. Rajesh also serves on the boards of multiple private companies in United States and India. Setty’s latest book ‘Beyond Code’ (Foreword by Tom Peters) was published in October 2005.