Failure of Vendor Relationships


    It is not uncommon to find companies unsatisfied with their relationship with IT and BPO vendors. Most companies end with a trial and error method, losing significant money and time in the process. What is important for them is to analyze the problems in detail and to figure out the key reasons for those problems, in order to avoid repeating those mistakes in the future.

    Some of the key problems companies usually are confronted with include:

    • High attrition

    • Issues with quality of talent

    • Lack of flexibility on the part of the vendor to accommodate changes in requirements and priorities

    • Higher cost than envisaged

    • Delays in project completion

    It is important to address the key reasons of the failure of the relationship, such as:

    • Lack of strategic and functional alignment with the vendor

    • Low client focus

    • Lack of enough due diligence on the vendor and detailed operations review

    • Higher than competitive rates from the vendor, due to lack of market understanding and right negotiation

    • Lack of robust SLAs

    • Lack of win-win terms and conditions in place to address business requirements in the contract with the vendor

    • Lack of a governance framework