The Standish Group, noted for its “Chaos Study” of software project failure rates, lists ten factors that done right, drive project success and done wrong, create failure.

None of the ten is labeled “bad vendor,” yet that’s the most frequently cited cause of IT problems. IS Survivalist Andrew Bramlett recently suggested that I could make serious money by packaging this into a “Delivery Accountability Service.” IT Catalysts could charge $10,000 per substandard deliverable, $20,000 per absent deliverable, $100,000 per failed ERP implementation, and an even $1 million for a missed earnings estimate (actual involvement in a project is optional, and charged separately). When you think of the career alternatives this is dirt cheap.

I’ve been around vendor-associated successes, vendor-associated failures, and results called both by different participants. I’ve been there on both sides of the table, too. Here are a few tips I’ve gathered along the way:

• Manage vendors the same way you lead employees. When it’s time to get the job done, it’s people who are doing the work. Praise in public, criticize in private. Be direct but not belligerent. Respect reporting relationships. For that matter, show respect, plain and simple. And understand that compensation is at best a minor motivator for consultants (as opposed to consulting companies) just as it is for employees. The sense of having accomplished something significant is far more important.
• Don’t over-negotiate. Also, don’t under-negotiate. Starve your vendor and you’ll get the junk you’re paying for. Overfeed and you’ll get flabby results. There’s no formula you can use to arrive at the right price, either. That’s what experience and good judgment are for.
• The relationship outlives the transaction. If you find yourself pulling out the contract every time you meet with the vendor’s account manager, something is seriously wrong with the relationship. If you go shopping every time you launch a new project, something is seriously wrong with the relationship, too. Create an atmosphere in which the account manager wins bigger by always doing what’s best for your company and the account manager will make sure you get enough value for your money.

Blaming a vendor is about as credible as blaming employees. In either case, you’re there to make sure your company has the right people in the right places, working on the right tasks in the right way.

That’s why they pay you the big bucks, isn’t it?