Techniques for Managing Vendor Relationships in Tech Projects

Your vendors are bleeding you dry—not money, time. After managing 100+ vendor relationships across Microsoft, Instacart, and our portfolio companies, I built a system that cuts project timelines by 70%. The problem: You think hiring experts means abdicating responsibility. Wrong. Your vendors manage 50 other clients. You're not their priority unless you make yourself one. Four Frameworks That Actually Work: 1. Deconstruct Your Blockers Don't ask "what's the update?" Ask "what specific approval are we waiting for?" Financial? Technical? Legal? You can't fix what you can't name. I've seen 6-week delays resolved in one call once we identified the actual blocker. 2. Own the Project Management Your vendors are specialists, not coordinators. Schedule the calls. Create the docs. Connect the dots. Yes, you're doing their job. It's also the highest-leverage work you can do. 3. Demand Time Boxes "We're working on it" = infinite timeline "Engineering review takes 5-7 days" = accountability Even vague deadlines beat no deadlines. One portfolio company cut deployment cycles 60% just by requiring time estimates. 4. Confidence ≠ Commitment "We're confident about approval" isn't "It's approved." Push for binary answers. This distinction alone prevents countless surprises. The Process: Monday: Status email to all parties Wednesday: 15-min sync if blocked Friday: Document decisions + next actions Rule: Never let a week pass without documented progress Real Results: Applied this to 6 portfolio companies last quarter: Project completion: 12 weeks → 4 weeks Cost overruns: Down 40% Vendor performance: Up 70% Best part? Our vendors started using our process with other clients. Advanced Play: Create quarterly vendor scorecards. Measure response time, timeline accuracy, and technical competence. Share transparently. Performance improves within one quarter. Why This Matters: Every week of delay costs runway. Every vendor inefficiency is a competitor's opportunity. The companies that scale aren't the ones with the best vendors—they're the ones who best manage them. Your Move: Pick your worst vendor relationship. Apply one framework this week. Document what changes. Vendor management isn't sexy, but neither is running out of runway because every project takes 3x longer than it should. What vendor challenges are you facing? Share what's worked (or hasn't) below. — Enjoy this? ♻️ Repost it to your network and follow Kevin Henrikson for more. Weekly frameworks on AI, startups, leadership, and scaling. Join 2000+ subscribers today: https://lnkd.in/gstGkhJF

𝐈𝐧 𝐯𝐞𝐧𝐝𝐨𝐫 𝐧𝐞𝐠𝐨𝐭𝐢𝐚𝐭𝐢𝐨𝐧𝐬, 𝐟𝐚𝐢𝐥𝐢𝐧𝐠 𝐭𝐨 𝐤𝐧𝐨𝐰 𝐲𝐨𝐮𝐫 𝐧𝐮𝐦𝐛𝐞𝐫𝐬 𝐢𝐬 𝐚 𝐝𝐢𝐫𝐞𝐜𝐭 𝐭𝐡𝐫𝐞𝐚𝐭 𝐭𝐨 𝐲𝐨𝐮𝐫 𝐩𝐫𝐨𝐣𝐞𝐜𝐭’𝐬 𝐬𝐮𝐜𝐜𝐞𝐬𝐬. Preparation is the backbone of every successful vendor negotiation. When you understand your costs, set clear terms, and align on value, you’re building not just a contract but a reliable partnership. Here are some of the best practices we have learned for effective vendor negotiations at Venwiz: 1. 𝐃𝐚𝐭𝐚-𝐃𝐫𝐢𝐯𝐞𝐧 𝐄𝐬𝐭𝐢𝐦𝐚𝐭𝐞𝐬: Arriving at project cost estimation through detailed cost analysis sets a solid foundation. Use methods like Zero-Based Costing for detailed estimations, apply inflation adjustments to the last purchase cost, or use weighted averages from multiple quotes. When vendors see that you know your numbers, it builds credibility and respect, setting the stage for more productive discussions.     2. 𝐒𝐞𝐭 𝐂𝐥𝐞𝐚𝐫, 𝐀𝐜𝐡𝐢𝐞𝐯𝐚𝐛𝐥𝐞 𝐓𝐞𝐫𝐦𝐬: Define concrete targets for service levels, timelines, and ceiling costs. A well-defined service agreement—including specifics like payment schedules, quality & safety standards, and warranty terms—establishes a strong foundation. This clarity avoids misunderstandings and creates a structure that supports efficient, respectful negotiations.     3. 𝐋𝐨𝐨𝐤 𝐁𝐞𝐲𝐨𝐧𝐝 𝐁𝐮𝐝𝐠𝐞𝐭 𝐭𝐨 𝐅𝐨𝐜𝐮𝐬 𝐨𝐧 𝐕𝐚𝐥𝐮𝐞: Budget matters, but so does value alignment. Quality vendors look for clients who understand this. Show commitment by offering flexibility in terms, such as adjusting payment timelines or considering future projects. If a vendor can provide an extended warranty or additional service terms, it may justify a slightly higher costs if it aligns with your project’s goals.     4. 𝐇𝐚𝐯𝐞 𝐚 𝐁𝐀𝐓𝐍𝐀 (𝐁𝐞𝐬𝐭 𝐀𝐥𝐭𝐞𝐫𝐧𝐚𝐭𝐢𝐯𝐞 𝐭𝐨 𝐚 𝐍𝐞𝐠𝐨𝐭𝐢𝐚𝐭𝐞𝐝 𝐀𝐠𝐫𝐞𝐞𝐦𝐞𝐧𝐭): Always have a clear fallback plan. A strong BATNA isn’t just a backup; it’s a powerful leverage tool that ensures you’re negotiating from a position of confidence rather than necessity. In vendor relationships, the best negotiations are built on value, transparency, and mutual respect. When both sides understand the stakes and goals, you pave the way for enduring partnerships that drive long-term results. 𝐖𝐡𝐚𝐭 𝐧𝐞𝐠𝐨𝐭𝐢𝐚𝐭𝐢𝐨𝐧 𝐬𝐭𝐫𝐚𝐭𝐞𝐠𝐢𝐞𝐬 𝐡𝐚𝐯𝐞 𝐲𝐨𝐮 𝐟𝐨𝐮𝐧𝐝 𝐦𝐨𝐬𝐭 𝐞𝐟𝐟𝐞𝐜𝐭𝐢𝐯𝐞 𝐢𝐧 𝐛𝐮𝐢𝐥𝐝𝐢𝐧𝐠 𝐬𝐭𝐫𝐨𝐧𝐠 𝐯𝐞𝐧𝐝𝐨𝐫 𝐫𝐞𝐥𝐚𝐭𝐢𝐨𝐧𝐬𝐡𝐢𝐩𝐬? 𝐋𝐞𝐭’𝐬 𝐥𝐞𝐚𝐫𝐧 𝐟𝐫𝐨𝐦 𝐞𝐚𝐜𝐡 𝐨𝐭𝐡𝐞𝐫—𝐬𝐡𝐚𝐫𝐞 𝐲𝐨𝐮𝐫 𝐭𝐢𝐩𝐬 𝐛𝐞𝐥𝐨𝐰! #Venwiz #CapEx #Procurement

Stop asking vendors to show you their product. Ask them to use it with you. Most demos look impressive because they’re designed to. But they rarely show how the system behaves when your team touches it for real. I learnt a smarter method in New Zealand: a 90-minute working session starting from nothing. No polished demo scripts, just your team, their team, and the reality of how fast you can get to value. This exercise has saved me months of configuration pain and vendor regret. It’s fast. It’s honest. And it reveals truths that would normally cost you months (and a small fortune) to learn the hard way: - How intuitive the platform really is - How the vendor collaborates under pressure - What becomes configuration debt - How fast you can get to actual value This is just one of the practical, real-world methods that helped me oversee more than $750M in IT procurement and navigate major shifts in the enterprise software market. Let’s connect if you want more practical GRC and AI techniques to help your team make better decisions. I’ll be sharing plenty more as the #AIGRCGuy!

Every so often, this needs to come back up to the top. Kindness, empathy, fairness, respect, that's how things get done............... "That guy probably lost his job over the deal I made him take to get any of my business." "They lost money on me with that one!" Sounds familiar, doesn't it? If you're an IT or procurement professional, vendor calls, special deals, and other promotional activities are part of your everyday routine. You need these vendors for products and services to do your job correctly. These quotes are real-life comments from networking events, where people take pride in how they pushed (or bullied?) a salesperson into a deal that might not be favorable for them. They see this approach as their strategy for all vendor interactions. But is this really the way to manage vendor relations, or any interpersonal relationship? I get it. As a leader with budgets and projects, your job is to achieve goals as cost-effectively as possible. However, remember that the person on the other end also has a job to do - secure business and maximize profit for their company. At first glance, these two objectives may seem mutually exclusive, but there's one factor that can unite them: Respect. Those earlier quotes reflect a glaring lack of respect for individuals. For success, you need to build business relationships, no matter your department or role. Being a successful leader means establishing trusted business relationships with your vendors and vice versa. This two-way street is only navigable when both parties respect each other, their financial needs, and their jobs. As a tech leader, when negotiating for non-standard, non-commodity products or professional services, it's crucial to know your budget, have a rough idea of costs and know was “success” is. If you're not familiar with these details, you're not ready to negotiate with vendors. From the vendor's side, they must be aware of their delivery capabilities, products and services, and required profit margins. Although you can get the lowest price by berating a vendor, consider the long-term cost. Will they help your project succeed? Will they go an extra mile for you? I've been successful in my projects because I take time to also understand my vendor's needs. If they cannot meet my requirements within my budget, I respect them enough to say so upfront, saving everyone's time. The outcome? I've had vendors pick up the phone on a major holiday, send items overnight via private couriers at no extra cost to me, provide same-day part deliveries during a critical outage, and without my ask, cut prices on one-off items when I'm in a budget crunch. All because I've respected their needs and their business. Sure, I might have spent a small bit more, but the results affirm it was worth it. My challenge to you is simple: Treat your vendors with respect, and see how your projects streamline and your partnerships flourish.

Before you kick off that outsourcing project, systems integration, or digital transformation -- pause and think. Two critical principles will make or break your initiative: - First: Your vendors will sell into the environment you establish during procurement. They'll adapt to whatever culture, processes, and expectations you set, for better or worse. - Second: The best vendors are sitting on millions of dollars worth of expertise and battle-tested insights. When they're genuinely invested in your success, they'll bring that intellectual capital to the table. Most organizations miss the connection: You only unlock that second principle by getting the first one right. And it starts before the RFx goes out. If you don't create an environment of trust and candor from day one, that expertise never shows up. If you treat procurement as a test, your vendors learn to play defense. They'll craft the perfect proposal, say the right things, and then deliver whatever you happen to ask for. But if you approach procurement as a learning vehicle, a chance to drive true alignment, and a genuine two-way discovery process, you signal that you value candor and that partnership matters. That dynamic carries forward and can make or break execution. During execution, this discovery and alignment will result in your new partner bringing its A-game, sharing insights proactively, challenging your assumptions, and investing their best thinking into your shared success. This requires them to be deeply vested in the outcomes, and that takes active, thoughtful engagement. Ask the hard questions. Challenge assumptions. But do it in a way that creates space for candid dialogue. Difficult conversations handled with transparency are worth their weight in gold. This isn't overhead. It's an investment in outcomes for you AND your new partner. Are you maximizing the ROI on your vendor relationships, or sacrificing long-term value for short-term "transaction efficiency"? #TransformationEnablement #NegotiatingForHumans #LobsterSox

**Choosing the Right Software Vendor: A Strategic Perspective** Leading business technology division my role involves not only identifying the right software solutions for business processes and internal customers but also serving as a technical advisor to other organizations, such as Engineering and Operations. I assist these teams in selecting the most suitable software vendors to address their business challenges. Over the years, I’ve developed a technique, along with a vendor selection process, that ensures we implement vendors that are objective and aligned with the diverse needs of multiple stakeholders across the organization. 1. Define Success Early Before diving into vendor demos or feature lists, align internally on your goals. What does success look like for your business? Whether it’s scalability, cost efficiency, or seamless integration, a clear vision helps narrow down choices. 2. Prioritize Flexibility and Scalability The perfect solution today might not meet your needs tomorrow. Look for vendors who can evolve with your business, offering customization and scalability as your requirements grow. 3. Evaluate Total Cost of Ownership (TCO) It’s easy to focus on upfront costs, but hidden expenses can quickly add up. Consider licensing, implementation, training, and ongoing support to calculate the true cost of ownership. 4. Check for Strategic Alignment Beyond technical capabilities, does the vendor’s vision align with your organization’s? Strong cultural and strategic alignment can lead to a long-term partnership rather than just a transaction. 5. Involve Stakeholders Involve end-users, IT, and business leaders early in the process. Their buy-in ensures smoother adoption and better alignment of the solution to day-to-day needs. 6. Don’t Skip the References Talk to other customers using the software. Their real-world experiences often reveal insights that demos and sales pitches might not. Choosing a software vendor is as much about trust and partnership as it is about technology. Take the time to evaluate thoroughly, and remember, the right choice can set your business up for success for years to come. What strategies or lessons have you found helpful in selecting software vendors? Let’s share insights and build on each other’s experiences! #SoftwareVendorSelection #TechnologyLeadership #StrategicPartnerships #BusinessSystems #BusinessTransformation

I've spoken to 300+ SMB leaders who've spent millions on IT partners and end up with broken promises. Ask 3 questions to find one that creates real impact: 1) Do they manage outcomes in addition to supplying talent? Most tech partners follow a basic 'talent outsourcing' model: - Ask a few questions about your needs - Source talent that matches - Hand them over to you to manage There are a couple problems with this approach: → Worst Case: You're left with a developer-only team → Best Case: You get a diverse team but lack the technical background to manage them (This applies unless you're a management savvy CTO.) Talented developers and designers need strategic leadership to build successful software projects. Make sure your tech partner provides said leadership and holds themselves accountable for the final solution. 2) Do they have UX expertise or a design studio? Design is often the most overlooked aspect of software development. An intuitive, user-friendly design - Simplifies complex features - Guides users to solutions quickly It's just as important as making sure the software gets the job done. So, look for an IT partner with proven UX capabilities or a dedicated design team. They should follow a structured process, like: - Conducting user research & interviews - Detailed discovery workshops - Defining user personas - Creating user flows - Wireframing, prototyping, and testing (This is our method at @Incepteo.) Writing code should NOT start before finalizing design to avoid re-coding or re-designing. Last but not least: 3) Do they provide CTO advisory? The Project Manager is usually responsible for the software's timeline, budget and scope – but having a CTO prevents you from facing many potential roadblocks. They: - Spearhead strategy and implementation - Review the software's design and structure - Share on the dos and don'ts based on past experience The best part is: they don't need to be present full-time. 1 hour of CTO advisory per month is enough to help most businesses move in the right direction. — If your company's investing time and money into a solution, make sure your partner provides the talent, design, and advisory for you to succeed. Ask these questions on the vendor selection call to see if they could be a fit. And, if you're tired of failed projects and ineffective solutions, send me a message on LinkedIn so we can chat about your requirements and needs. (We answer YES to all 3 questions 😄)

Most companies pick AI vendors the wrong way.  They get dazzled by demos and impressive feature lists.  Then wonder why implementation fails. The decision tree that prevents vendor disasters: Decision Point 1: Does this solve a specific business problem? → YES: Continue to next decision  → NO: Stop. Find your problem first, then find vendors. Decision Point 2: Can you measure success in 90 days?  → YES: Continue to next decision → NO: Break project into smaller, measurable pieces. Decision Point 3: Do they have customers like you? → YES: Continue to next decision  → NO: You'll be their expensive experiment. → Choose different vendor. Decision Point 4: Can you integrate without IT overhaul? → YES: Continue to next decision  → NO: Factor 6-12 months additional timeline and budget. Decision Point 5: Do they offer pilot/trial period? → YES: Continue to next decision → NO: Red flag.  → No trial means they're not confident in fit. Decision Point 6: Is pricing transparent and predictable? → YES: Continue to next decision  → NO: Budget will explode.  → Get fixed-price commitment first. Decision Point 7: Can they explain how their AI actually works?  → YES: Continue to vendor selection  → NO: Black box AI creates compliance and trust issues. Final Decision: Does this vendor pass all 7 checkpoints? → YES: Move to contract negotiation  → NO: Keep looking.  → Partial fits become expensive failures. The companies getting vendor selection right: Use this decision tree before demos, not after.  Eliminate 80% of vendors without wasting time on sales calls.  Focus energy on the 2-3 vendors that actually fit. The companies getting it wrong: Start with features, end with problems.  Pick vendors that sound impressive in meetings.  Realize after signing contracts that integration is impossible. Your vendor decision determines your AI success.  Choose based on fit, not features. Which decision point eliminates most vendors for you? Found this helpful? Follow Arturo Ferreira and repost.

Strategic supplier relationships are the foundation of any procurement team. Here are the top 5 rules to get it right: #1 - Define your objectives before you enter a supplier relationship. Define your desired outcome - be it cost reduction, innovation, quality improvement etc. This is critical to guide your Supplier Relationship Management (SRM) SRM strategy. #2 - Segment your suppliers. Not all suppliers contribute the same. Categorize your suppliers based on criticality, complexity and value so you can allocate your resources more effectively and tailor your approach to different supplier types. #3 - Don't neglect performance measurement assessment. Regularly measure agreed-upon metrics so you can identify areas for improvement and proactively address issues. Schedule regular meetings, performance reviews and feedback sessions to guide this along. #4 - Implement supplier risk assessment. Identify potential risks such as quality issues, external disruptions, regulatory compliance. Work WITH your suppliers to mitigate these issues. #5 - Many overlook this, but treat suppliers as a vital component of the business plan and as team members. You are partners in the supply chain. Share the vision, sell the relationship’s value, and gain buy-in. Cost efficiency is critical but avoid treating your suppliers purely like transactional entities and acknowledge the total value offered. Hammering your suppliers until they break = no bueno. What have I missed?! 🤔