Telecom & Technology Consulting
Leaders always focus on the success and growth of their organizations. Vendors are there to help with those endeavors. But what happens if a partner, like your IT provider, all of a sudden shuts its doors? Perhaps there’s been a bankruptcy or dissolution process.
Just like that, you’re scrambling to find a replacement that’s essential to daily operations.
Dealing with this unfortunate scenario requires the same thinking you apply to internal what-ifs, such as security breaches and service interruptions. That is, not only do you need to respond immediately, you must already have a proactive strategy in place so everyone knows their role in the process.
In short, you need to be prepared for the possibilities. Carta, a capital management solutions firm, showed that in the first quarter of 2024, startup bankruptcies increased by 58% compared to Q1 2023. But it’s not just financial issues that can cause an IT provider to disappear. The vendor may decide, seemingly overnight, to get rid of, or stop, supporting a specific technology or service.
As part of your preparedness plan, consider how you could activate business continuity clauses with suppliers. Evaluate the impact of, say, a discontinued service and seek alternatives based on that assessment. For example, ask the current vendor if they can maintain support until you migrate to another platform. If an external data center is being shut down after being acquired by another vendor, look for a current provider who also offers data center services and transfer the infrastructure.
Overall, when facing a disruption of your IT resources, seek a solution right away, and perhaps more importantly, look at a range of vendors, not just one company. The goal is to avoid losses of both revenue and reputation, of course. But to achieve that, you have to ensure a minimal interruption of services.
As we can see, smart planning is fundamental for having the best possible outcome when replacing an IT services vendor. Be sure to have contracts that include business continuity clauses and contingency plans. While you can’t develop proactive plans for all services, you can conduct a risk analysis to identify critical services and evaluate how their potential discontinuation could affect operations and the business. From that, create a specific plan that could include diversifying IT vendors and partners, which will allow you to easily identify the right replacement (when needed).
Another wise and proactive strategy is the use of standard platforms that are compatible across multiple vendors, which streamlines migration when you need to shift from one vendor to another. Also implement data backup strategies, develop a vendor monitoring system, and maintain clear documentation of processes and configurations. Also be sure to conduct consistent vendor audits and contract reviews.
Related to the aforementioned is having a thorough contingency plan, with specific procedures for data recovery, continuity of services, and the management of internal and external communication. These preventive measures are fundamental, especially during the service contracting process. Make sure your contracts include protection clauses, including service level agreements that can mitigate the risks related to a bankruptcy or disappearance of a supplier.
After you’ve developed a collaborative relationship with an IT services vendor, be disciplined and maintain constant and open communication with your key contacts. Doing so fosters your ability to detect the early warning signs of both technical and financial problems on the part of the vendor. While no IT leader wants to experience moments of panic in a vendor relationship, having the right mechanisms, processes, and preparedness plan in place allows for a much softer (and successful) landing.
