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Vendors – hidden risks

At some point, you decide not to spend your dev resources and to proceed with the vendor. It could be a dev framework or a service or a plug and play feature.
A vendor could be a pretty good solution if it is not a part of your core business. You need to take care of your core business and have a control over it, you can outsource other parts.
At the same time, working with a vendor brings additional risks. Your vendor’s mistakes will be your mistakes, your vendor’s failure will be your failure. That’s why you need to be super careful choosing the vendor.
Questions that you need to ask yourself before moving forward with the vendor:
✅ Reputation. Is this vendor is reliable? Is it a 1-month old startup and you are the first big client? Or it is a stable company that has a portfolio? Who are their clients? Find a person in your network and ask about this vendor. This is how I found once that the vendor lied about having a well-known company as their client. Unfortunately, it may happen.
✅ Documentation. Take a look at it carefully. If there are blind spots or major mistakes – it’s a red flag. “Yes, we do support this feature, but just don’t have documentation in place” – this is a red flag. In some cases, it might mean “we don’t have this feature, but it doesn’t look huge. We need this client, we’ll build it right after signing the contract”
✅ SLA. Service Level Agreement. If the vendor doesn’t have it, it’s a red flag.
✅ Scalability – will this company grow as fast as your company’s needs do? Or you will need a new vendor in 12 months?
✅ Test account experience. This is your chance to get the experience working with the vendor. Don’t be focus just on the technical part. Notice all the details: how their support works, how well the onboarding experience is documented. You are usually super busy at this stage, but don’t ignore the red flags.
✅ Legal docs negotiation. At this point, you made a decision and want to move forward fast. But don’t ignore the red flags. The way how the company negotiates the legal docs can show the overall company’s culture.
✅ Plan B? Life is life. It is better to have plan B that you never used than to have an urgent issue. What are the alternatives? How quickly could you switch to another vendor? It is better to have this plan in place. Just in case.


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July 1, 2019