I\u2019ve been thinking a lot lately about \u201cthe vendor problem\u201d in IT and how every time I want to elicit a grimace from a room full of CIOs, I just have to say the word, \u201cConsultant.\u201d\n\tIn fact, I was talking recently with Margot Sharapova, CIO of the Americas at AECOM, the $8B professional technical and management services company, and she brought up \u201cthe vendor paradox.\u201d She wondered why I haven\u2019t spent more time on it.\n\t\u201cBut what is the vendor paradox?\u201d I asked her. Her response was so rich, that I had to write it as a blog.\n\tThe IT Vendor Paradox\n\tAccording to Sharapova, we can break down the IT vendor paradox into a few parts.1. Vendor capability as sold is not the same as vendor capability as delivered.\n\t\u201cVendors will tell us, \u2018No problem. We can have resources with a depth of capability in SAP on the ground in the UK on this date,\u2019\u201d says Sharapova.\u00a0 \u201cBut then the vendor has no idea how to get the visas necessary to send resources to the UK.\u00a0 So they ask us if we would consider sub-optimal resources that they can get approved. \u00a0So, you have to make a tradeoff: less capability, but at least they\u2019re approved and can be on the ground sooner.\u201d\n\tSharapova recounted a story about a vendor who told her they would supply her with a program manager to lead a major implementation for them.\u00a0 But in the first week, her IT team realized that the person did not even know how to create a project plan. They had to replace the program manager twice, which set the project back by quite a bit. \u201cThis situation is not unique,\u201d says Sharapova. \u201cIt is embedded into the fabric of vendor relationships; you have to build these scenarios into your time line.\u201d Sharapova likens vendor relationships to a marriage that is doomed from the start. \u201cIt\u2019s like you are planning to get divorced before you\u2019ve even exchanged rings,\u201d she says.2. Fear of transition costs outweighs your ability to address major issues. \n\tIn some situations, says Sharapova, you find that the replacement project manager is as unqualified as the one he replaced, so you wind up making the most out of sub-par talent. \u201cI\u2019m paying for the vendor to PM, but I\u2019m paying my PM to PM their PM, who can\u2019t PM,\u201d she says.\n\tOnce you\u2019ve invested significant time in the vendor project manager, you\u2019ve diminished the advantage of switching him out. The cost of knowledge transfer is too high. \u201cOnce you\u2019re married, you have to stay together for the sake of the children,\u201d says Sharapova. \u00a03. Our expectations of vendor capability does not align to our approved budget.\n\tAs CIO, you work hard to create a project budget that will get approved. \u201cBut then you are in a position of trying to strong arm your vendor to that they can retrofit the project to your budget,\u201d says Sharapova.\u00a0 But the vendor is trying to make a margin, too. So, how do they make up the delta?\u00a0 \u201cThey erode the caliber of resources so that their costs go down and they can maintain their margins,\u201d Sharapova says. \u00a0\u201cThat\u2019s why they bring in the big senior consultants to bait us, and then they switch those people out with junior people who actually do the work.\u201d\n\tWhat do to? \n\tThis vendor paradox is a tough one, and it\u2019s expensive.\u00a0 Sharapova has some suggestions for how to mitigate its impact.\n\t1. Have one of your own employees be the program manager. \u201cIn many ways, project management is an art,\u201d says Sharapova.\u00a0 \u201cIt\u2019s too tough to manage in an outsourced relationship. The minute you have \u2018contractor\u2019 on your email signature, you have limited ability to lead. \u2018Contract program manager\u2019 is an oxymoron.\u201d\n\tTo Sharapova, \u2018turnkey engagements\u2019 are a miss whether they are on or offshore; you cannot outsource accountability for that critical role.\u00a0 \u201cYou end up doing the project management yourself anyway,\u201d she says. \u201cSo you are paying twice.\u201d\n\t2.\u00a0Don\u2019t hesitate to make a change. When you see that the resources a vendor assigns to your project are not qualified, you need to intervene at the highest level, and you need to do it quickly. \u00a0\u201cThe key is in your ability to navigate the talent base of your partners,\u201d says Sharapova. \u201cIf you can find an \u2018A\u2019 player in the vendor organization, your probability for success goes up.\u201d\n\t3.\u00a0Understand your vendor\u2019s employee incentives. \u00a0What are the metrics that motivate the vendor\u2019s staff?\u00a0 What is driving their behavior?\u00a0 \u201cIt is very important that you understand how are your vendor\u2019s bonuses are set up,\u201d says Sharapova.\u00a0 \u201cYou understand the metrics-based drivers of your own team; just because you outsource a role doesn\u2019t mean you don\u2019t have to have the same level of understanding of what drives the person doing it.\u201d\n\tAccording to Sharapova, the fact that customers and vendors don\u2019t work better together reflects poorly on us on a profession. \u201cI don\u2019t have the\u00a0 perfect remedy,\u201d she says. \u201cBut we should aspire for something better.\u201d\n\tAbout Margot Sharapova and AECOM\n\tMargot Sharapova is the VP & CIO for AECOM Americas. In this role, Margot is responsible for driving information management strategy and execution to support fundamental business processes and growth. Margot started her career at GE Plastics in their information management training program and rapidly rose to CIO roles at GE Energy and GE Healthcare. Prior to GE, Margot worked in retail banking and education. Margot holds a BA in Russian Area Studies from Dartmouth College\n\tAECOM is a global provider of professional technical and management support services to a broad range of markets, including transportation, facilities, environmental, energy, water and government. With approximately 45,000 employees around the world, AECOM is a leader in all of the key markets that it serves. AECOM provides a blend of global reach, local knowledge, innovation and technical excellence in delivering solutions that create, enhance and sustain the world's built, natural, and social environments. A Fortune 500 company, AECOM serves clients in more than 140 countries and had revenue of $8.2 billion during the 12 months ended Sept. 30, 2013. More information on AECOM and its services can be found at www.aecom.com.