10 Must Ask Questions For Your Technology Suppliers
How do you navigate within an environment of exploding technology and yet stay within a budget that has little or no increase from last year? How can you limit your liabilities and yet maximize your benefits? Whether you are on the executive team, managing IT, operations or overseeing marketing, your suppliers are leveraging technology more and more to provide a great value proposition. When you are comparing different companies for a specific digital project or service, here is a valuable framework with 10 questions to help guide your decision making process.
Security & Access of Your Data
From March 2014 to March 2015, there was an estimated 891 million breaches of data globally* (includes hacks, security flaws, data breaches, and others). When it comes to your suppliers, they need to help you understand how they host, manage and secure your data. Is their security managed by a new technology graduate, a 20 year IT veteran or an outsourced web developer? Get your supplier to clearly articulate their redundancy and disaster recovery plan. They need to provide you with the confidence that their technology service stays online with very limited or no interruption at all to your business. Have them share with you how security updates are applied and what areas of their services are being outsourced. Here are 3 must ask questions to your suppliers and their partners about security and access:
- How are the servers hosted and who manages them?
- What redundancy is in place and what is the disaster recovery plan if the servers fail?
- What levels of security do they have and what expertise do they have?
Privacy with Suppliers
Privacy has been an important topic with the focus on PIPEDA (Personal Information Protection and Electronic Documents Act). When we think of privacy, we often think of how your information and data is handled with external customers (i.e. sign-up forms that say “we do not share or sell your email with anyone outside of our organization”). However, very rarely will you hear how data is protected internally within an organization by how your information is managed, shared with outsourced companies, or leveraged in ways that can be a conflict of interest. Knowing which staff has access to your data and knowing what restrictions are in place to ensure privacy within their organization is important to be aware of. If and when there are changes in business practices, is this communicated back to you? Ensuring a proper non-disclosure for all parties is important as it defines how information can be used, stored and shared. It is also critical for suppliers to disclose any conflict of interests. Look to deal with companies who are integral and unbiased in the services they provide. Here are two important questions to consider:
- Who has access to your data? How do staff, owners, silent investors or business partners have access or privileges with your data? Do the suppliers share this data with any additional third-party companies?
- Conflict of interest: Are there any real, perceived, foreseeable or potential conflict of interest where your supplier can be influenced by undisclosed interests, other suppliers or (private) investors?
If you would like some further information about a non-disclosure agreement and eliminating conflict of interests, we would be happy to share our best practices with you.
Defining the Cost/Benefit
Understanding the cost and benefit of the supplier may or may not seem obvious depending on the type of service provided. However, when you begin calculating staff time and effort on a project, the “free” services or hours of work may not be “free” as you originally had expected. Anytime you look at technology, you need to be aware of whether there is a full service component or if your organization must assist with the additional effort. Do you need to manage the service yourself? Are there additional training and support fees? The National Apartment Association (NAA) provides an excellent course for suppliers called the Certified Apartment Supplier (CAS) which helps ensure that there is a true benefit to the net operating income. In this course, we learned how this topic of conversation brings clarity, integrity and transparency about the true costs associated with the service provided, and deepens the trust between client and supplier. When sitting with your supplier, ask them:
- What is the impact to my net operating income (NOI) with this service?
- Outside of the price that is shown on the agreement, where might I bear costs in time, support or other fees?
To calculate the costs associated with advertising and leasing, please contact us for a free assessment.
Imagine that you have begun working with a supplier and there as a breach of your agreement. It is essential that you have an honest and upfront conversation with your supplier to ensure they know your concerns with a reasonable time frame to remedy the situation. If there is no corrective action completed, you now have a decision to make. You can check your agreement to review the termination clause. What happens if there was still another 1 year minimum commitment with that supplier? Beware of being too dependent on one supplier. Always look for alternative suppliers who can integrate with your current services so that you are not locked in with only one supplier if there is any breach of service. For the rare but unfortunate situation where some liabilities have occurred, does your supplier have ways to mitigate your liabilities? Often suppliers may have a general liability insurance for them, but do they have insurance if you come into a disastrous technological failure? Here are some questions to ask:
- Do you currently have limited or no options to integrate with other suppliers?
- Are you locked in with a long-term agreement? What is your back-up plan if there is a breach of service?
- What types of insurance does your supplier have (i.e. Errors and Omissions Insurance)?
The bottom line: Technology is expanding incredibly in size and scope, BUT generally speaking, IT budgets are not. In fact, IT projects are expected to do more with the same number of people! So whether you are an executive, IT, operations or marketing professional, ask questions that enable you to achieve great success with your business partners.