Navigating a Difficult Goodbye: Ending a Partnership With a Tech Vendor

View article in HR Tech Outlook.

In ever-increasing ways, ranging from property management systems to online booking engines to payroll software, the hospitality world relies on technology to keep operations running smoothly and customers happy. According to a 2022 engagement study by Hospitality Technology, guests will often make decisions as to where they eat or stay based on technology options: 64% of dining respondents said they would choose one restaurant over another if it offered free W-Fi, for example, and 63% would be willing to pay more for technology features that are important to them. On the lodging side, 73% of guests said that they would select one hotel over another if they could check in/out from a mobile device, and 76% would be willing to pay more for technology features they deemed essential.

As an industry, we have spent the last few years getting matched up with the perfect tech suitors so that we can all live happily ever after…but sadly, that’s not always the end of the story. As businesses evolve and markets shift, there are times when you may have to reconsider your partnerships and potentially part ways with a vendor. The reasons for such a decision can be multifaceted – perhaps the software or equipment no longer aligns with your company's strategic direction, costs have become prohibitive, or there are consistent challenges in service quality. Whatever the cause, it is crucial to navigate this transition with professionalism and foresight because although the romance has ended, you will want to prevent disruptions for both guests and employees, as well as prevent any unnecessary expenses.

If your hotel or restaurant needs to make this type of change, here are ten steps to ensure a graceful execution:

1. Review your agreement – Before initiating any separation process, read through the contract with the vendor to avoid any legal complications. Understand the terms of termination, notice deadlines (which should be clearly marked on your calendar to avoid any last-minute scrambling), and penalties or fees associated with early termination. On a side note, before signing an agreement with a vendor, look for discrepancies in the “out” clauses and insist on parity; if the vendor can terminate the agreement with a 30-day notice, then you should be given the same courtesy. Don’t let them unfairly slip in a requirement that you need to provide 60-, 90-, or 120-days’ notice.

2. Collaborate on a needs analysis – Gather the department heads from IT, Sales, Finance, and Operations (making sure to include the end users in this process) to honestly evaluate where the vendor has fallen short and discuss options for a replacement system that could better serve your growth strategy over the next few years. This assessment helps in understanding the gap that will be left by the departing vendor and guides you in seeking a new partnership. If you are starting again from square one, please see my previous CHART blog posts on where to find suitable tech providers or tech vendor interview questions.

3. Notify the partner – Once you're ready, inform your representative about the decision and provide them with the required notice as per the contract. Even justifiable frustrations are best aired constructively, so if you want to secure their full exit cooperation, acknowledge the positives of your relationship and remain solution-focused.

4. Plan for data migration – If your vendor handles any data, document exactly which data sets (customer profiles, reservation records, inventory, etc.) must be transferred and identify formatting needs to sync info with the replacement solution. And most importantly, whatever the end date is by which you must have the data transferred, make sure it is also clearly marked on your calendar so that you do not lose any critical information.

5. Plan for transition – Create a detailed outline showing which accounts, credentials, and capabilities will be handed off or revoked on which calendar dates, and make sure you set up contingency protocols in case something doesn’t go according to plan.

6. Communicate internally – When your plans are in place, ensure that all relevant departments and staff are informed as soon as possible about the decision and provide them with needed information on the upcoming changes or transition (termination dates, replacement tech, installation times, etc.). Note that this shouldn’t just be one-way communication in the form of emails – area or district managers, regional managers, and directors should regularly be visiting your locations and communicating directly and openly with team members about the change (not just what is happening, but also why it is happening) and available to answer questions or address concerns. Additionally, if the change will affect your guests in any way, make sure to reach out either directly via email or using signage in your businesses to explain what is happening and where they can find more information.

7. Train your team – If you're moving to a new vendor or system, your employees will need to be adequately trained before the launch, so ask the Training Department to prepare budgets for educational sessions, resources, and onboarding support for all the impacted departments.

8. Settle outstanding payments – Work with your Accounting Department to clear any remaining invoices or payments with the vendor, even if the service quality declined, to maintain a professional relationship and avoid any legal disputes. If vendor issues caused major business disruptions, however, you may need to consider negotiating a portion withheld pending the deliverables spelled out in your agreement. If any invoices arrive after the termination date, make sure you are alerted before payment is transmitted so you can determine if they are legitimate.

9. Backup your systems – Before the transition, perform a full backup of all vendor-managed systems a week prior to cutover, so you have restore options available without needing their assistance if migration struggles occur.

10. Conduct a post-transition review – After the dust settles, survey your guests and team members to assess the impact of the change on your hotels or restaurants (and if you’re not sure of what metrics to use, it’s a great question to ask your CHART colleagues). This review will allow you to identify any areas for improvement and ensuring that the new system or vendor is meeting your needs.

While ending a working relationship with an entrenched hospitality technology vendor can feel daunting, these steps can help to professionalize potentially emotional departures. And remember, if you treat this transition as an opportunity to recalibrate your operational systems, you are paving the way for new opportunities and partnerships that can better align with your business objectives and fuel next-level innovations.