The Three Stooges Vendor Accountability Program

Written by Todd L. Michaud
April 14th, 2010

Franchisee Columnist Todd Michaud has spent the last 16 years trying to fight IT issues, with the last six years focused on franchisee IT issues. He is currently responsible for IT at Focus Brands (Cinnabon, Carvel, Schlotzsky’s and Moe’s Southwestern Grill).

I am sick and tired of my vendors using the “other guys” excuse as the reason they miss their deliverables. I currently have a project involving three different vendors that is going to miss its second deadline extension. Each of the vendors is basically crossing its arms and pointing at the other two. The next person to tell me, “Hey, we did everything right; you need to talk to those other guys” is not going to like the conversation that follows.

Like many franchise IT shops, we rely heavily on a stable of vendors that provide services for different components of our retail technology landscape. Franchisees contract directly with these providers for services (for example: POS, broadband, credit card processing, etc.). In some cases, we also outsource core IT functions as part of a right-sizing strategy, basically expanding our staff through third-party consultants to meet specific project demands. This approach allows us to maintain a small internal IT staff that manages a large number of third-party resources.

One of the toughest things for an IT person to adjust to when moving into this type of environment is the lack of direct control over IT outcomes. The IT team is not directly supporting the store systems. Its primary responsibility is to manage vendors that are accountable for delivering services to the franchisees. While this arrangement allows us to be highly scalable, it creates significant opportunity for finger-pointing and blame-shifting.

Here’s how frustrated franchisees’ conversations typically sound:

“Hello, this is your POS company. How can I help you today?”
“My credit cards aren’t processing.”
“The POS is fine; contact your credit card company.”

“Hello, this is your credit card company. How can I help you today?”
“My credit cards aren’t processing.”
“Everything is fine on our side; contact your network company.”

“Hello, this is your network company. How can I help you today?”
“My credit cards aren’t processing.”
“Your network is fine; contact your POS company.”

“Hello, this is your franchisor IT team. How can I help you today?”
“My credit cards aren’t processing and after spending the entire day on the phone, I’ve learned that apparently it’s no one’s fault. Your vendors suck! YOU SUCK!”

The same thing can easily happen with projects. Deadlines are missed, and the “Accomplishments” section of the status report starts to show things like, “Held a meeting with all parties to discuss a format for the interface.” Wait a minute, “discuss?” How about “decide on?”

And operational scorecards start having items like, “Waiting for this other company to do something. Once that is complete, we can do our thing.” Really? How about something like, “We are proactively reaching out to our primary contact at the other company to get a status of when we can expect this other thing to be done so we are ready to do our thing ASAP. Per the last update on Thursday, we expect a resolution by Tuesday.”


One Comment | Read The Three Stooges Vendor Accountability Program

  1. Dr.P. Says:

    This is not a new problem and it is not limited to franchising organizations. It appears to have at least 5 parts: 1) A lack of specific performance requirements from IT that have been agreed on with the company end-users, 2) Failure to put these specific requirements into the contracts with the vendors, 3) Lack of precise metrics to measure contractor performance and a clear statement of what constitutes a failure (serious or minor), 4) Omitting a description of the measurement process (who will do, how often, how results get communicated), and 5) Agreeing on dollar ‘penalties’ for failures. Adding to this real world problem is the fact that it is difficult to find someone to manage this problem. It takes a rare combination of technical IT understanding, contract know-how, business and management experience and communications skills plus continuing effort to quickly recognize and solve these problems.


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