Software Vendor Red Flags: 7 Warning Signs

If a software vendor says this, run.

Choosing a software vendor is a high-impact decision. The wrong partner can waste money, time, and internal trust. These seven warning signs show up early, often before any code is written.

7 Vendor Warning Signs

1. “No need for discovery, we already know what you need.”
   Every business has unique workflows. Skipping discovery increases the chance of building the wrong solution.

2. “We’ve done this exact thing for a big company.”
   Name-dropping is not proof. Real proof is clear examples, references, and outcomes.

3. “It will be done in a month, guaranteed.”
   Fixed dates without analysis are unreliable. Complex work needs planning before promises.

4. “Any change is fine. No extra cost.”
   Changes always cost something. If a vendor hides this, conflict is likely later.

5. “You won’t need to be involved. We’ll handle everything.”
   Good vendors want client involvement. Low involvement usually means misalignment.

6. “This offer is only good if you sign today.”
   Pressure tactics reduce trust. Strong vendors give time for a careful decision.

7. “Our price beats everyone else’s.”
   A low price often means missing scope, weak testing, or junior staffing.

Mini Case Study. Finance Portal Failure

Problem: A finance company we know wanted a customer portal to reduce investor call volume and improve self-serve account access.

Mistake: The company chose the cheapest vendor. The vendor skipped discovery, promised a fast timeline, and claimed changes would be easy. Halfway through, the vendor demanded change fees for basic requirements that were not “in scope.”

Fix: The company stopped the project, re-ran vendor interviews, and used a clear discovery phase with real stakeholders and a written change process.

Result: The second attempt delivered a simpler portal first, then improved it in phases. Internal trust recovered, and adoption increased.

Quick Takeaways

• Discovery is not optional. It is risk control.
• Unrealistic promises usually become expensive conflict later.
• Low client involvement leads to misaligned software.
• The cheapest bid often costs the most.

Use the 7 warning signs above as a vendor screen before signing any proposal.