Taken for a ride: the preferred vendor or the enterprise ? 2 sides of the coin !

It was a great journey working with you and the team to design the solution … regret, unfortunately we are unable to proceed with the engagement and would like to thank you for offer; we wish you all the best in your future endeavors ! After unsuccessfully attempting to shift the blame from himself, the CFO gave in and agreed to recall the vendor and accept their last provided offer to move ahead. It was a tumultuous ride that had culminated in the imbroglio the enterprise found itself in with the vendor shortlisted by the business and IT. (see earlier post)

The delay had almost cost the business the early mover advantage; they required the solution to be primed within a time window for which they will now have to super stretch. Regulatory deadlines can be unforgiving to business and the Business Head was thus on tenterhooks. He sensed that the wounded ego will not take kindly to the decision; the scorned CFO should have been his ally, after all they had a good working relationship in the past; the CIO was a political outcast with his neutrality now going against him.

With a letter of intent the project was kicked off, the contracting took a while; each and every clause was scrutinized and fortified to put the vendor in a precarious situation should the project suffer any kind of deviation. To safeguard his interest, despite undue pressure the vendor did not commit full resources until the paperwork was completed. The business team watched the drama as it played out waiting to get started; the CIO continued to counsel the vendor with a mix of pragmatism and spirit of the now fragile partnership.

Starting on perceptibly shaky foundation, the project got off to a fair start with all sides putting in the rigor required to make up lost ground and deliver to promise; review meetings were used for course correction as the steps taken were firm and steady thus covering the halfway milestone with time to spare. The first process prototypes were approved for build and the finishing line appeared to be within reach. Everyone was charged and they were progressing in perfect unison, an example out of the textbooks on project management.

Next review meeting had an uninvited yet powerful participant who wanted a personal assessment of the good news that the project reports were portraying. He tested the patience of the team with his questions that attempted to elevate the highly improbable to highly likely even though it did not make any sense to build for probability of events that may occur beyond the six sigma. The system design not addressing the probable though not possible kept recurring as a theme and he declared an emergency by the end of the meeting.

No one had anticipated the CFOs active interest in the project considering that after finalization of the contract they had not heard anything from his offices. So the new found interest made everyone a bit uncomfortable, wondering where it was headed. By the end of the meeting it was evident that it was a blatant attempt to derail the project by challenging the team credibility to have thought through the processes and design a solution that addressed all use cases; the team went into a huddle to find a strategy to overcome the new challenge.

The vendor provided referenceable material on global best practices and how they had addressed similar scenarios in other markets; the CIO reached out to the subject matter experts to list down occurrences of exceptions over the history of the company rather than work on hypothesis of an eventuality hitting them. All the material thus collated clearly vindicated the stand the team had taken and the solution they had architected which appeared to be adequate to counter the new threat to their project.

Such distractions they could do without and they could not have taken on the CFO headlong; so they decided to use the CIOs connections to get an external consultant – an acknowledged authority. As providence would have it, the next meeting was the Steering Committee which had all stakeholders. The Consultant gave an independent critical analysis of the project pointing out a few observations where the team could improve outcomes. The CEO applauded the audit report and endorsed the team to move with full speed.

Contracts protect enterprises from external risks, how do we stay protected from internal mischief ?

What do you do when your preferred vendor walks away from the deal ?

It was a great journey working with you and the team to design the solution; the innovative concept outlined is path-breaking and definitely an industry first. We learned a lot during interactions and refining the architecture; we are thankful for the opportunity. We have discussed the project and debated the immense value it brings both of us with the partnership. Regret, unfortunately we are unable to proceed with the engagement and would like to thank you for offer; we wish you all the best in your future endeavors !

Above is the gist of email received by the CIO from one of the large IT vendors who came up with the best technology solution to the opportunity. It was not a surprise even though collectively they had invested over two man years into the project which had the Board’s blessings as well as eye of the CEO. Just a few months back the leadership team from the vendor had visited them and provided the right messages to the CEO on their commitment to the project; he decided to break the news to the CEO – his manager.

The company had lagged behind in some technology solutions that had given an edge to their competitors; not that it made a significant difference, it did score brownie points with customers. Solutions in question were investment intensive and required lot of rigor to sustain; the big players were always competing on such differences in capability. Global competitive benchmark required a multiplier on the investment that none had made in the industry thus far; the company saw this as an opportunity.

So the net was cast far and wide to evaluate best in class solutions; the laggard reputation preceding the company did not evince excited responses from the providers. The CIO used all his reputation to nudge them into action, the serious face put forward by the cross-functional team made up for the rest of push required. Activity levels rose through the process reaching a crescendo as they arrived at a well-informed conclusion in an open and transparent assessment to select the best option for their global aspirations.

Recommendations were presented to the Management and the Board; everyone acknowledged the thorough nature of the process, metrics and weightage in the calculations. The project was accorded approval with a fair budget and the task shifted to financial negotiations which was not perceived to be a hurdle towards closure. Purchase under the tutelage of the CFO was thus handed over charge of expeditiously moving ahead to keep the momentum going and give the company the much needed impetus towards glory.

The shortlisted solution provider recognized the energy infused into the discussions with necessary approvals sought to strike while the iron was hot. With global leadership team’s presence, they reinforced their commitment to the company vision, the project and committed execution with best of resources. After ensuring comprehensiveness of the Bill of Material, terms and conditions, clauses defining inclusions and exclusions, Finance/Purchase and the vendor finally started looking at the numbers and the total cost of ownership.

They went back and forth from unreasonable to the outrageous, the game of negotiation began with each attempting to maximize their value. As time passed by, the business team began to feel uneasy on outcome of the protracted exercise which threatened to break up the positivity that prevailed prior to going into the financial discussion. The CEO was dutifully informed of the ongoing progress as the weeks flowed into months; the impasse was now also hurting the vendor who had put their best foot forward.

The CIO along with the business head attempted to reconcile to the situation while impressing on the CFO the need to progress; competition had already picked up the ball and started moving in the same direction ! The CFO brushed aside their pleas with the view that he cannot pay more than what he perceived as value for the solution. Business teams withdrew active follow up and left the baby in the lap of IT; the CIO realized that ego had overpowered rationale thought and asked the vendor to decline the business.

In the meeting caught unawares, the CEO sought details which the CIO provided in the presence of the Business Head who was not party to the game. An urgent meeting was summoned with Finance, Purchase, Business and IT heads to analyze and find a way to recover the situation. The CFO who was handpicked by the CEO found himself in a compromised situation; he unsuccessfully attempted to shift the blame, finally sheepishly agreeing to recall the vendor and accept their last provided offer to move ahead.

Happy ending ? For next time …