Software vendor relationship - can you make it better?

Your company bought a corporate software solution. Your teams tweaked, modified and tested to get it up to your requirements. Now, you just continue to use it for the next 20-30 years without problems. Right?

Well, not quite. The marriage between a corporation and a software vendor has a tendency of turning ugly as time passes and here is why:

  • Software Vendor Greed - You are tied up into maintenance and upgrade contract, with a yearly fee. And lately, the largest software vendors are increasing these fees as new sales are dropping. The latest example are SAP and Oracle, and they are actually blaming it on Inflation - Here is a great article on this tendency
  • Customer treatment - After a corporation has migrated it's core data into the new software, and sufficient delta time has passed to make the reverse migration into the old system impossible (usually 3-6 months), the software vendor relaxes. He know that the customer is his for the foreseeable future, since migration back or to another system is way too costly, in time, money and human effort. So the software vendors becomes less responsive, focuses on new deals, and in extreme cases even becomes outright arrogant
  • Software Quality Failures - What initially seemed like a minor issue, can grow into a big ugly monster of a bug as the dataset grows, or as errors creep into the system. And the software vendor may choose not to address the core problem, simply because it is too costly or not really possible to be fixed without a full overhaul. So what usually happens is that your company ends up throwing ever more powerful hardware at the problem in the hope that raw speed will help alleviate the issues.

So, is there a way to kick the software vendor where it hurts and make them work as good as the first time they sold a solution?

There is no silver bullet solution, but the following suggestions can help a lot:

  • Put a big stick in the purchase contract - Include software issues resolution time and change request reply times bound with severe penalties in the original purchase contract. This way, all you need is to enforce this SLA every time the software vendor slips. Pretty soon the software vendor will have to bite the bullet and start dedicating it's resources to you - simply because it will cost them way too much to treat you bad.
  • Put a carrot in front of the software vendor - Place a condition of payment for any new expansion or module purchase with clearance of all outstanding issues in the original software.
  • Always plan a contingency - Have a planned alternative solution. This is the most difficult solution - and the most costly to complete. But when in dire straits look at alternative solutions - especially fully managed (outsourced) alternatives. With these alternatives your organization is the user of a software, and most of the effort of migration in terms of hardware and resources is offloaded to the outsourcing company. Oh, and by the way, once the software vendor understands you have an alternative, quality will definitely improve.

Talkback and comments are most welcome

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Experiments in Cyberspace said...

Although it will not be possible for each and software, if there is a choice, choosing the one with a portable data format can give some edge. When the data is portable, it will always be cheaper to switch.

Short said...

Yeah, this is by all means a great solution, but unfortunately not really applicable to corporate solutions - these have custom databases.

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