Not for Profits rarely think of software vendors creating business continuity risk for them. Unfortunately, it happens too often.
A while ago, I was asked to evaluate a number of software vendors in a Not for Profit social services subsector. The industry was changing due to a sudden change in government requirements.
The IT vendors currently or desiring to support these providers ranged from global software vendors to small Australian companies trying to expand their customer footprint.
The problem was that every vendor I was asked to evaluate showed serious signs of risk.
While it’s unusual to find such high levels of risk in a whole subsector of vendors, it is important to watch for these 3 signs of business continuity risks when evaluating your options.
What are the 3 signs of business continuity risk caused by an IT vendor?
For this subsector of vendors, the 3 signs of business continuity risk I identified largely fell into three categories:
- The software was undergoing significant development work – These were smaller vendors already in the sector. However, due to their significant software development work to meet the industry’s new needs, there was a high risk that the system would become unstable if not managed well.
- The vendor had no/little local experience – These were global companies that wanted to enter the market with a product that could meet most of the providers’ needs out of the box, but not all. For instance, they had never created the required government reports before, and many of the data fields to capture the information needed to be created.
- Vendors had little desire to support the existing software –These companies were already in the market but showed little effort to support their existing software outside of regular patches – trying to sell their new, more expensive flagship products that may not meet the providers’ needs instead.
Each of these signs identified risks that could impact the providers’ future day-to-day operations or business continuity.
So, what happened?
In the end, these Not for Profit providers had little choice. The best decision was to do nothing… i.e. keep their existing vendor at this time, even if it was less than ideal.
The smaller vendors needed time to stabilise their products. And, the new large vendors needed time to understand and develop the additional requirements in their systems.
For the vendors that didn’t want to support their older products, the providers needed time to evaluate their more expensive options properly.
Therefore, most providers added a 12-month extension to their legacy vendor contracts to give all the vendors more time.
Other vendor risks you should know about
Unfortunately, these three signs are not a complete list of vendor risks.
Check out this other article I wrote for some others: Buyer Beware: 12 CRM vendor risk signs you should know BEFORE buying
I regularly help Not for Profits with IT vendor decisions. Let me know if you need some help.
P.S. If you found this article helpful, you might want to read these too:
- When Vendors Sell Overcustomised CRM Solutions
- What to do when you can’t afford to replace a broken system
Tammy Ven Dange is a former charity CEO, Association President, Not for Profit Board Member and IT Executive. Today, she helps NFPs with strategic IT decisions, especially around investments.