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Don't let vendor lock-in limit IT agility. Due diligence will keep your vendor options open.
5 ways to avoid vendor lock-in
Within the last ten years, many companies have migrated to cloud-based technology to avoid the budgetary constraints of funding large capital projects for data centers and agile software development. While cloud solutions offer companies many benefits, it still introduces some risks. For example, vendor lock-in is as great in the cloud as it was in the data center.
Vendor lock-in is commonly defined as "Proprietary lock-in or customer lock-in, [which] makes a customer dependent on a vendor for products and services, unable to use another vendor without substantial switching costs."
In short, if you are tied to a certain vendor, even a cloud vendor--and you want to change direction--it's going to cost you time and money.
How do you avoid getting locked in in the first place? Below are five steps to avoid vendor lock-in.
1. Negotiate both an entry and exit strategy upfront with your vendor Many companies are eager to sign on a contract's dotted line without reading the fine print. If you read the fine print, you will usually find clauses that address termination. Often, termination can entail giving a 30-day written notice.
In addition, there are other elements concerning termination that you should discuss with prospective vendors and write into your contract. For example, you need to ensure that your vendor will assist you with a deconversion if you want to migrate to another vendor.
This is important because vendors are notoriously uncooperative once they know you want to leave them for a competitor. The best way to avoid a potentially unpleasant and hostile situation is to document SLAs for deconversion assistance with your vendor upfront in your contract. This way everyone is clear about their respective responsibilities when it comes time to switch vendors.
2. Watch your contracts for auto-renewal Many IT vendors auto-renew contracts for a new term unless you notify them that you don't want to continue a contract. This common IT oversight occurs when no one keeps an eye on vendor contracts. To avoid this problem, monitor contractual commitments and when terms come to an end.
3. Have a backup vendor Let's say that you're using a cloud vendor for data storage. It's always a good idea to have a backup cloud storage vendor at the ready in the event that you wish to leave the first vendor. This way you already have a secondary business relationship, and you aren't exclusively tied to the first vendor.
4. Design portable applications If you're using infrastructure or platform as a service cloud vendor for your applications, design your applications so that they can easily be decoupled from the underlying infrastructure or platform of your hosting vendor. This simplifies the task of transporting applications and data to an alternate vendor.
Service level agreement (SLA) policy
An effective SLA establishes standards for critical operational concepts like uptime, service quality, problem response/resolution times, and performance metrics. This policy provides a foundation for building an SLA that protects both service providers and their customers.
From the policy:
Service level agreements streamline operations and allow both parties to identify a proper framework for ensuring business efficiency and customer satisfaction. On the flip side, businesses can identify where problems lie if service level agreements are not adhered to, then make the necessary decisions to find additional budget funding, impose penalties, or seek alternate providers and staff.
These agreements can exist between businesses (such as between a company and an external cloud provider) or entirely within an organization (such as between an IT department or help desk and its user base). They can be unidirectional (one party assuming responsibility for all details) or bidirectional (both parties share responsibility for certain elements or actions).
Customer responsibilities Customer are expected to work with providers to establish acceptable and reasonable service level agreement requirements—such as performance metrics or response times—based upon operational need. For instance, seeking 99.999% uptime is a common and feasible trend, but 100% uptime may be impossible.
Customers are expected to follow all technical or legal requirements, such as security policies, acceptable usage governances, regulatory compliance mandates, internet access policies, and all other applicable guidelines.
Customers must contact the provider via appropriate and established methods A service level agreement can’t be applied to alternate or unapproved methods of contact, such as leaving a voicemail directly on a technician’s phone line. The technician might be on vacation, and therefore the service level agreement would be breached. Only an approved, shared contact number should be used.
Customers must acknowledge planned outage notifications (such as for maintenance) and work with providers as needed to address potential problems that may arise from these scenarios.
Customers must notify providers to request additions or changes in established service levels. If providers are represented by internal individuals or groups (such as the IT department) changes to service level agreements should be discussed and mutually agreed upon by authorized personnel (such as the IT director).
Vendor relationship management checklist
From the checklist:
Love ‘em or hate ‘em, vendors are key to the success of most every information technology consultant. Strong vendor relationships help good consultants excel, but a dysfunctional vendor alliance can sink even the most astute of consulting firms. Thus, vendor relationships are critical, yet their importance is often (and easily) overlooked.
Why? Simple.
The time, energy, and resources invested cultivating vendor partnerships, reseller relationships, and distribution agreements don’t constitute billable hours. As a result, consultants often have trouble justifying the required time to establish and solidify vendor relationships.
Unfortunately, without strong vendors, few consultants can meet client needs. And without proven sources for delivering competitively priced software, equipment, renewals, services, and related components in a timely manner, consultants end up frustrating customers—and customers walk.
Worse, disgruntled customers share their stories with other businesses. “Consultant X couldn’t obtain Windows systems quickly.” “Consultant X couldn’t reduce my enterprise security software licensing costs!” “Consultant X took three weeks longer than planned to complete a new platform rollout because the hardware was late, supposedly.”
Consultants can blame vendors all they want—even if delays, snags, and other issues that arise ARE the vendor’s fault—but the burden to deliver remains with the consultant, not the vendor. Whenever a consultant proposes a project or initiative with a client, it’s the consultant’s responsibility to source the required software, hardware, and other elements, recommend vendors, and establish pricing.
So what’s a time-pressed consultant to do? This checklist can help. It’s a simple guide based on lessons I’ve learned owning and operating my own IT consulting firm for 12 years. Use this checklist to select the best vendors, track your satisfaction levels, and maintain strong partnerships.