Vendor Risk & the Ecosystem

  • Tom Stergios
  • Viewpoint
  • April 19, 2015

Twenty-seven years in CRM, CPQ, and Billing have taught me a few things. First, don’t talk about your job at a cocktail party. Trust me, they are not interested in the latest bundling strategies in the mid-market, Software-As-A-Service space.

Seriously, though, some of my most painful lessons have come from recommendations to clients that have gone south due to Vendor Risk. What is vendor risk you ask? It can be many things, but in Enterprise IT vendor risk includes at least the following areas:


    Does the vendor keep its promises? Do the executives and employees follow proper business ethics?


    Does the vendor look for win/win agreements, or is every point in the relationship a hard fought negotiation nightmare?


    Does the vendor stick to an area of expertise, or do they wander around the IT landscape looking for the next hot area to expand their solution set?


    Does the vendor stick to an area of expertise, or do they wander around the IT landscape looking for the next hot area to expand their solution set?


    What is the motivation of the vendor, and the executive/ownership group? Are they looking to drive the company forward with founder’s passion, or for a quick flip to a competitor?

These risks have always existed, but never more so than in the past several years. In ATG’s area of focus – managing customers and revenue — many vendor segments have been a hotbed of new company start-up, failures, consolidations, and mergers. Configure Price Quote (CPQ), Contract Lifecycle Management (CLM), and Billing and Revenue Management have experienced tremendous tumult in the past several years.

For our clients, often these consolidations have massive ramifications and upset carefully orchestrated architectures that may have been counting on vendor roadmap functionality that is now in jeopardy. When we make vendor recommendations to clients we evaluate Functional, Technical, Commercial, and Intangible fit of vendors. Vendor risk exists under the Intangible category, but it is becoming a larger factor in the overall decision.

Occasionally, however, the consolidations go the other way, and actually ‘de-risk’ the environment for our clients. This is how we feel about the Salesforce SteelBrick acquisition. Salesforce has a strong track record for the vendor risks that I mentioned above, and SteelBrick had an exemplary record of customer success in the CPQ space before the acquisition.

Many of our clients are consolidating on Salesforce to handle all of their major customer touchpoints. The introduction of SteelBrick CPQ and Billing will provide additional capabilities to manage the critical sales and revenue funnels that are the lifeblood of our clients. While there are a number of quality CPQ solutions in the marketplace, we are excited about the value and risk proposition that is offered by Salesforce and SteelBrick.

Heck, I might even bring it up my next poker night. On second thought…

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Tom Stergios is the Vice President of Quote to Cash for Advanced Technology Group (ATG) and the General Manager of the Missoula Solution Center. Tom has more than 25 years of experience with service providers in billing and the Quote to Cash space.