Audits are one of the biggest challenges facing SAM professionals and licensing professionals in the current era. Gone are the days when only the likes of Microsoft and IBM conducted ‘reviews’; now all of the Tier 1 vendors regularly audit their customers, and a number of other software vendors have also jumped on the audit bandwagon. This is simply because it is a great way for the software vendor to make extra revenue to help meet sales targets or to help balance the books.
There are a number of ways in which you can delay and audit, or become ‘audit ready’ and one of those ways in which to potentially put off an audit, delay an audit or be given extra breathing room from the software vendor is through the vendor management function and having a strong relationship with the software vendor.
Analyst firm Gartner describe vendor management as “a discipline that enables organizations to control costs, drive service excellence and mitigate risks to gain increased value from their vendors throughout the deal life cycle”. Some organisations leave the vendor management aspect for hardware and software to the ITAM or procurement function as they are likely to have the contacts and have the best relationship with account managers and the vendors.
There are a number of organisations that actually have a Vendor Manager or a Vendor Management department. These professionals or departments focus is on building and maintaining a positive relationship between the organisation and all vendors, not just software vendors. The management of the relationship between vendor and organisation can prove to be a big benefit to the organisation as it could result in a number of perks.
End user organisations should regularly review the vendor’s performance; are they performing to the high standards that you expect? What could they improve upon? For software and hardware vendors (especially LAR’s) you can change vendor at the end of an existing agreement. If things have got that bad and you feel as though the relationship has become untenable then the organisation also needs to understand where they went wrong during the contract/relationship to ensure that it doesn’t happen again.
Regular communication with your vendors is a must. We’ve even been made aware of some organisations that have weekly or monthly calls with their Tier 1 software vendors to ensure that they keep a strong relationship with them and are completely updated with what new software, hardware or licensing changes that may be coming in the future. This is also a good opportunity to build a personal working relationship with account managers and get them on-side so they can help as best they can when you have any issues or are coming to the renewal time.
Strong relationships with account managers/vendors
Strong vendor management focuses on a win-win scenario for both parties. The vendor should feel as though they are in a strong (winning) position, and so should the customer. This means that throughout the contract and negotiation phase everything should be done in ‘good faith’ and that there are no detrimental secrets or facts that either party withholds to try and get the upper hand or a better deal. This relates to the trust factor and sets the relationship up on a good standing.
It is also important to ask questions of the vendor; what are their company goals, what new software/licensing models are coming out during your software agreement period and what does their roadmap look like? Having an understanding of what their goals and objectives are and what the future looks like will help the end user organisation understand what they can expect in the future and how the vendor can bring extra value to the relationship with new products or more favourable licensing terms.
Organisations that have a strong vendor management function or a good working relationship with a software vendor can usually pull a few strings to put off an audit, or at least be given advanced warning that their organisation may be on the hit list.
Speaking to organisations throughout the world, we have found that those who are close to the software vendor (keep your friends close, and your enemies closer!) and have a vendor management function within their organisation, have managed to postpone audits from the software vendors, or have been given a heads up by their account manager that they may be on the hit list for an audit.
This forms part of the ‘increased value’ element of Gartner’s quote, and whilst an unwritten perk, having insider knowledge or communications from the account manager is testament to a strong relationship and the organisation managing the relationship with the vendor in a dynamic and mature manner.
Building and destroying trust
There is a fine line between having complete trust in a software vendor and their advice, and completely ruining that trust and relationship. There are a number of ways in which this can happen from both the vendor and end-user’s point of view.
- Inaccurate licensing or SAM information
- Not getting adequate amounts of support and information
- Not being kept up-to-date with new software and licensing models
- Seeming lack of knowledge from the account manager
- Feeling that the account manager is ‘not on your side’
- Being told wrong or inaccurate information
- Lack of communication lines throughout the agreement/renewal process
- End-user not telling them the full story with regards to compliancy/license risks
- Payment issues
- End-user deciding to change account manager or move the procurement of licenses to another territory
- End-user failing an audit. This means that the vendor is likely to not trust the organisation again in the future, and could result in more audits.
There is an old saying that rings very true in this scenario; building up trust takes an age, but breaking trust can take a matter of seconds.
How do you manage your vendors (both hardware and software) and what have you done to ensure that you have the best working relationship possible? Do you trust your vendors, or have there been cases in which you don’t trust the information that the vendor has provided you? Let us know your experiences and how you manage vendors by leaving a comment.
Come along to our Event!
Become ‘audit ready’ at our 3rd Annual European Tools Day event in London on Friday 20th November 2015. This is the perfect opportunity for you to have a look at the world’s leading SAM tool providers, and ask the experts how they can help your organisation. Places are being snapped up fast, so please register your place now.