6 Questions Effective CIOs Ask to Maximize an IT Vendor Relationship

Do the demands of daily operations consume your IT resources, forcing you to keep moving out deadlines for new projects?

Is your company losing revenue while waiting for critical system enhancements?

Are you missing deadlines for your stakeholders’ highest priority IT projects?

Do you dream about cloning your best IT talent so you can get everything done?

If your demand for IT services is exceeding your capacity, you have choices.

You can invest time in finding, interviewing, and hiring more full time employees. But do you hire a project manager? A system architect? Developers? Testers?   And when the backlog is under control, will there be enough ongoing work to keep them busy?

Instead of hiring permanent staff, you can partner with a proven software company with expertise in all the skill sets required to meet your demand.

Maybe you’re hesitant to try outsourcing IT because you’ve had or heard of projects that were months or years late and thousands of dollars over budget? 

Based on 20 years of experience in IT outsourcing, we’ve designed six questions you can use to quickly determine whether a prospective IT service provider will deliver on time and within budget.

1.  How will you personalize your service for my project? 

You deserve customized service. If the vendor looks surprised at the idea of personalizing service specifically for you, end the interview.

One of the things a vendor should offer to personalize for you is communication, because a successful partnership depends on sharing information in a way that works for you.

If your vendor asks questions like the following, you’ll know they are willing to customize their approach to meet your personal preferences.

• How often do you want status reports?   This may vary depending on the size of the project. For a small project with tight deadlines, you may want a daily update, especially for the first project. For longer projects, you may want a weekly or bi-weekly update. 
• In what format would you like to receive status reports? There are many ways you can get an update on the status of your project. For a critical project with a short deadline, you may want a daily phone call to identify progress and discuss challenges. For longer projects, you may want a weekly written report showing progress against objectives. Perhaps you want only a high level report, or you may want the vendor to provide you with a detailed description of work completed by each person on the team, including dates and hours per task.
• How do you want us to communicate with each of the team members in the project? The method of communication may vary depending on the purpose. The vendor’s project manager may provide your internal project manager with a written weekly status report showing detailed progress for each task, or they may decide to schedule a daily or weekly phone call. Your technical team may ask the vendor’s software developers to send an instant message to request immediate, quick answers, or they may want questions emailed or entered into a shared task and issue tracking system using tools such as SharePoint or Microsoft Team Foundation Server. 

Communication is vital to a healthy and productive relationship with your vendor, and it’s not a “one size fits all.” Be sure your vendor wants to customize communication to fit you and your team.

2.  What are your standard processes? 

Ask your vendor to explain their standard processes to you, and if they have documentation of the processes, that’s even better.

The vendor should be able to explain why they have chosen the standards. Look for answers that prove the vendor has invested time in evaluating past projects to determine what works and what doesn’t, and has defined standards geared towards ensuring future project success.

Your vendor should have standard methodologies for all aspects of a software project including:

• Project management
• Requirements definition and documentation
• System design and architecture
• Documentation
• Coding
• Unit and end-to-end testing
• Installation, beta testing, and user acceptance
• Final installation
• Ongoing support

Look for the vendor’s willingness to be flexible. If your organization has a preferred standard methodology, make sure your vendor adapts to your processes and follows your standards.  An experienced vendor should be comfortable adapting their standards to fit within your processes.

There is no single methodology that guarantees a successful software project; what’s important is that you and your vendor agree to follow a methodology. For example, some companies define requirements at the beginning of a project, and approved additions or changes to the scope are covered by an increased budget and extended timeline. Other companies have hard and fast delivery dates, so the requirements are prioritized, and approved changes or additions cause some requirements to be delayed until after the delivery date. If your vendor is operating under the first methodology – with a delivery date that may be extended – and you are working under the second methodology – with a firm delivery date – it’s going to be very difficult for the project to succeed. 

For a successful project, you and your vendor need to ensure shared understanding of the process to be followed for each step in the project.

3.  How have other companies used your service to improve the way their business works?   

Look for an IT partner who understands that software is a business tool. It’s tempting for people who work with technology to focus on the latest and greatest and fastest and slickest tricks software can perform. If your prospective vendor talks more about technology than about business, tell them goodbye.

A good IT partner can explain how their clients use software to increase revenue, decrease cost, or meet legislative or financial requirements. 

Your vendor’s goal should be to understand and meet your unique business needs. The vendor should ask questions about how the software will fit into your business processes and will address shortcomings in the process. A good vendor won’t start with preconceived ideas for a solution but will use experience and your needs to tailor a solution to your specific requirements. The vendor’s first job should be listening to you to gain an understanding of how your business process works and how software can improve it. Your business needs should determine whether the vendor recommends buying a package, writing a new custom application, enhancing existing software, or integrating packages you’re already using. 

Look for an IT partner that can do more than just write code. If your vendor brings a focus on business processes to your software development projects, they’ll help ensure your systems are efficient and support your business objectives. 

4.  How long have you been in business, and how long have your employees been with your company?

You’re making a substantial investment in finding the right IT partner and familiarizing them with your business processes and objectives. To reap the biggest payoff for your investment, you want a long term relationship with your IT partner and its employees. Ask the vendor questions such as:

• How long have you been in business? A technology company that has been in business for 12 years or longer must be doing something right. It has survived the lean post-Y2K years and previous economic challenges, and it should have long-term relationships with clients willing to give you references.
• Is work completed by your employees, or do you sub-contract projects? To maximize your investment, the project managers, designers, developers, testers, and documentation writers assigned to your application today should be the ones you work with next year when you need a modification or enhancement to your system. 

To get the best long term support from your vendor, verify that all work will be completed by their permanent employees, not by sub-contractors or temporary coders. 

Once you confirm that work will be completed by the vendor’s employees, ask about employee retention.  

If your vendor has a good retention program and long-term employees, your project is more likely to be high quality, on time, and within budget. Why?  A development team that has worked together for two years or more has identified the strengths of each team member and figured out how to maximize the team’s productivity. An established development team is likely to deliver clean code faster than a team of comparably talented individuals who have no experience working together.

When you speak with reference accounts, ask about the employees who performed their work. How would the reference rate the employees’ skills? If the employees were talented, were the same people assigned to multiple projects for the client?

Maximize your investment in finding and building a relationship with the right IT partner by choosing a vendor with a proven track record and long term employees.

5.  What skills do you offer?  

Many skill sets are required to successfully complete a software project, and a person with expertise and skills in one area is probably not the one best suited for another role. 

The project manager needs to be organized, good with follow-up, and skilled in communicating with both business and technical teams. The person who gathers requirements and writes the system specification needs good interviewing, listening, and writing skills. This person also needs the ability to generate ideas for accomplishing the business objectives, translate requirements into system functions, and facilitate a team through the process of identifying and agreeing on requirements and making decisions about priorities.

The system architect creates the technical infrastructure for the system, the system designer translates business requirements into screens, reports, and functions, and the database designer creates a structure to make the screens, functions, and reports work effectively. 

Software developers write code that makes the screens, reports, and functions work as designed in the requirements document. Report writers understand how the data is structured and know how to get it into a format that makes business sense. If your company has specific standard tools, such as Microsoft .NET or Microsoft SQL Server, the people in each of these roles will need experience with your tool set.

The technical writer or documentation specialist needs the ability to clearly explain in writing how to make a system work. The best testers understand how the system should work based on the requirements document, and they take a structured approach to pressing every key and entering good and bad data into every field to ensure the system performs correctly after both expected and unexpected input. 

What skills does your project require? If you need a complete new system, you may need a full project team. If you want someone to create a new report, you may only need a report writer. 

Bringing in experienced team members for each specific project role allows you to avoid the time and expense involved in hiring a permanent employee, and when the project is complete, you’re not left with an ongoing overhead staff cost. 

Finding a company with employees experienced in each skill set assures you that you’ll have the right people to meet your company’s IT needs for all of your projects.

6.  What went well in previous projects, and what went wrong?    

This is similar to conducting an interview with an individual and asking about the person’s greatest strengths and greatest weakness. If someone tells you they have no weaknesses, you should wonder about their self-awareness or their honesty! Similarly, if a company tells you that every project completed was a success, be skeptical.

You want a vendor who can talk about previous successes in detail. They should be able to tell you about the business purpose of the project, why they recommended their solution, and how it solved the business problem. They should also be able to describe the technical aspects of the solution in as much detail as you would like. 

Ask about the types of challenges they faced on a successful project and how they overcome obstacles, because every project has at least one and generally more.  You want a vendor with a track record of getting around the inevitable technical or human project roadblocks you’ll face.

However, you also want the vendor to describe a project that did not go well and the lessons learned. Does the vendor accept responsibility for some of the problems or try to place all the blame elsewhere? After an unsuccessful project, did the vendor analyze the issues and make changes to prevent similar problems in the future?

Your vendor’s answers to this question will give you some interesting information. You’ll learn how the vendor builds on past experiences and how the vendor accepts responsibility for problems. You may even get an idea of how much honesty you can expect.

         Final Tip: Communication is critical. 

Someone call tell you, “I am an excellent communicator,” but you can’t be sure of it until you have a conversation with him or read something he has written. 

Listening to the answers a vendor provides to the six questions gives you the opportunity to find out how well your vendor really communicates. Does the vendor speak clearly, or do they mumble or talk too fast or too softly? Does the vendor use standard, understandable business language, or do they use confusing technical jargon? 

Does the vendor ask applicable questions and listen to your answers? Do they take notes and ask for clarification? Do they demonstrate understanding by restating information you have provided?

Ask for samples, such as a requirements document, status report, or description of a standard business process, that demonstrate writing skills. Is the information presented clearly and communicated effectively?

When you interview a vendor, they are trying to impress you and win your business. They’re showing you their best, so if you feel the communication is not clear during the interview process, be careful: it’s not likely to improve.

You can outsource IT successfully and develop an effective, long term relationship with an IT vendor. Use our six questions and the final tip to choose the right technology partner to help you reduce project backlog, meet stakeholder deadlines, and deliver IT solutions that allow your company to focus on the important things – like increasing revenue and reducing cost.