When Vendors Go Bad

Last week while speaking at the Canadian Society of Association Executives, I had ocassion to meet two women from an association that had recently purchased a new AMS from a vendor in the US. They had invested over $40,000 with the company, and at this moment, the company seems to be insolvent (e.g., they’re not returning calls, no communications, no apparent CEO, all staff have been furloughed).

The women wanted to know what they could have done differently to avoid choosing a company that ultimately went bankrupt and delivered no product. The answer is: not much. If you’ve done your due diligence (e.g., checked references, chose a company that has been in business for more than five years, etc.) and the company still goes bankrupt, I’m not sure what else can be done. Sometimes businesses go out of business (which is even truer in today’s economy).

So the focus here isn’t really preventive but prescriptive. That is, what can you do to prepare yourself for the worst case? As it happens, David Gammel at High Context Consulting has a post addressing some of these issues.

One more thing I would add to David’s list is this: Be sure that all of your business rules and procedures are documented. Even if they are documented using the software that you may lose access to, having the rules and procedures documented will give you a head start if you need to change vendors quickly.

I once had a client that got into a billing dispute with their vendor and was ultimately cut off from their AMS product. But with my help they were able to switch vendors within six weeks, in part because we had documented many of their rules and procedures.

Don’t get caught by something out of your control. If your vendor can no longer provide you with service, you need to have a plan for moving, and moving quickly.

About Wes Trochlil

For over 30 years, Wes has worked in and with dozens of associations and membership organizations throughout the US, ranging in size from zero staff (all-volunteer) to over 700. In that time Wes has provided a range of consulting services, from general consulting on data management issues to full-scale, association-wide selection and implementation of association management systems.

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