Although telephone communication may have been established with vendor resources and management interaction may have taken place periodically throughout the life of the contract, aggressively encourage and promote alternate forms of communication.

Traditional communication takes place on several different levels (executive decision-makers, relationship managers, frontline support personnel, customers and users) and in many different forums (contract negotiations, telephone conversations and e-mail). Understand the powerful forum that is real-time "person-to-person" communication. Collaborative tools that enable such real-time communication are maturing rapidly, thanks to updated networking infrastructures and faster pipes. Look to leverage technology that promotes real-time communication between internal support teams and those resources representing the vendor. Technology as simple and basic as a PC Web camera can deliver a profoundly positive customer support experience. Tier 1 support personnel connected via Web cams to tier 3 resources across a campus are provided a richer, more personal and immediate form of collaboration.

Investigate emerging technology in the form of e-service collaborative tools (for example, WebEx or Microsoft Corp.'s NetMeeting) that provide your support staff a forum to interact with vendors. A practical example of leveraging this technology occurred recently when a customer who was unable to communicate an application error clearly enough for the vendor to diagnose the problem used a WebEx session. Within a matter of minutes, a collaborative Internet channel was established, the problem was demonstrated in real time on the user's PC and the error was effectively triaged. The result: A positive experience for both the customer and the external vendor resource.

There is still no substitute for a site visit. Formally spell out and define in the support agreement a schedule of customer visits from your vendor. Likewise, a casual visit to a vendor's headquarters to meet technical support teams goes a long way toward enhancing communications. Have your internal support resources or response center prepare a quarterly vendor performance report, and communicate this to end-user communities.

Constant and steady communication through reports, meetings, site visits and invitations to vendors to present at internally sponsored Technical Meetings attended by business unit liaisons are all potent weapons in maintaining a constant and effective communication channel with external vendors. Recognize, too, that accepting the occasional golf event from a vendor has its place in building a strong relationship. View it not as a necessary evil but as an opportunity to exchange ideas, focus on important business issues and foster a business relationship steeped in high-touch communications.

Demand SLAs, Penalties and Metrics

You should demand a lot from your vendors. Hold them accountable for poor service. Challenge them to be more efficient and to pass along those savings to you. Challenge them to be innovative and to help you deliver better service to your organization. An SLA (Service Level Agreement) allows you to meet all of these demands. This performance contract identifies a vendor's commitment to provide a quantitative level of service.

An effective SLA must include the names of key service employees, documented acceptable service delivery levels and negotiated commitments on key service metrics. Identify and clearly communicate unique business requirements and set service level expectations. Popular measurements include mean time to repair, response times, network availability, monthly call volume, abandon rate, queue lengths (open calls) and uptime or availability.

Penalties take the form of an agreed upon monetary remedy that is imposed if the vendor fails to meet the SLA. Such penalties are largely ceremonial; most consider them a debt that no one ever collects on. Penalties provide a "bathroom lock" sense of comfort and are primarily introduced into a contract to remind the vendor of its obligations. Although penalties may help remediate an impasse, it is far better not to rely on them.

Here's an example of a penalty clause in an RFP: Vendor will negotiate a penalty clause with Children's Hospital Boston for nonperformance. It is expected that 95 percent of all SLAs will be met throughout the duration of this contract. Vendor finalists will be required to present suggested penalty clauses for inclusion into the contract during contract negotiations.

An appropriate vendor response would resemble the following: CBE meets SLAs of 95 percent -- on average over a rolling three-month period. If CBE fails to meet 95 percent over any three-month period, CBE forfeits a half (.5 percent) of one percent of revenue for each percent it dips below the SLA. Reports not arriving on time count as a one-percent dip in performance for any given month. At any and all times, extreme cases -- if documented with valid reasons (not excuses) and agreed to by both Children's and CBE -- can be removed from the statistics.

Remember to value the opinion of your rank and file. Communication both internally and externally is important. The view you see at 20,000 feet as a manager or responsible vendor liaison may differ greatly from the reality felt by support personnel in the trenches.

Have a Strategic Plan

Communicate the mission, specific business drivers and efficiencies that you hope to achieve with the vendor relationship. Most important, articulate your strategic direction by focusing on how the vendor can assist you in the future. Yes, this is the proverbial carrot dangling on a stick in front of the horse, but there's nothing shameful in presenting a roadmap for future business opportunities.

Demonstrating that your business has a strategic plan will assist you in the negotiation phase and with any incremental purchases in the subsequent contract period. Vendors will respond with favorable service to assure your future patronage. For example, relationships with client/server vendors can be strengthened when your business demonstrates an ongoing need to procure goods and services in support of the strategic plan. Salespeople need not smell repeat business; they will immediately recognize an opportunity to leverage the account. This tactic positions you exactly where you want to be: in control and on the radar screen.

It is not advisable to disclose your capital budget in any vendor communication. You can damage your company's competitive position in the future and end up with a severely flawed and expensive technological decision-making process. In short, blindly following your incumbent vendor into new initiatives will result in sagging service levels and more expensive technology deployments.

Which vendors you select and how you manage them directly contributes to your business' success and well being. Remain vigilant and remember that this is a business relationship, not a friendship. The primary goal of any vendor is to advance its key business metrics (profitability, revenue, shareholder value or market share); it is not an idealistic, customer-focused vision.

Be on guard for the comfort that comes with familiarity, as it can lead to a false sense of security, the inevitability of bad business practices and stifled innovation. Failure to act expeditiously will result in the risk of paying additional support fees, receiving support from inexperienced resources and having the wrong combination of allocated resources earmarked for your business. Your business units will recognize this as lost productivity and diminishing margins brought on by inefficient workflow and ineffective vendor management.