Managing Multi-Vendor Relationship: How many do you really need?

Raise your metaphorical hand, if you have to store all your passwords and vendor contact information in a spreadsheet on your computer just to keep them straight. If you said yes, you are NOT alone.

Welcome to the era of easy outsourced fixes. Today, anything and everything can be outsourced. Majority, if not all departments of the organization you belong to, outsource one component or more likely, many, to an outside vendor. Vendors bring specialization, efficiency, maintenance and ultimately, cost savings. The idea of specialized suppliers is attractive for a multitude of reasons, opting to outsource in most instances just makes sound business sense. Bringing in the first vendor, yes – this is without question helpful and time-saving. Bringing in the tenth vendor – this is still arguably manageable while likely still cost and time valuable for the company. But what happens when your company has 100 vendors? While this question may seem a little absurd, it’s actually not. In fact, the average company in 2016 has an average of 89 vendors that just access a company network weekly according to Bomgar. Outsourcing services from an exorbitant amount of suppliers has become the norm rather than the exception.

This begs the question, at what point do you reach diminishing returns on all this “time-saving” outsourcing? The answer to this question is multi-faceted and unique to each particular business. Yeah, not what you wanted to hear, but unfortunately there is no one size fits all magic number. However, we can let you in on some classic, telltale signs that your business may be spreading business functions a little or a lot too thin.

The Bad…

Vendor Communication or Lack Thereof
Communication is key. You can have the most well-designed and planned Gantt chart to layout your project timeline every step of the way, but this isn’t going to help when the company who setup the wireless didn’t account for building materials obstructing the signal. Now you have a completed office where half the employees don’t have access to internet. Oops! Miscommunication by even a single vendor can delay an entire project and cost your business a ton of money.

Lack of Integration
Not all technology talks to each other and neither do most vendors. Never, never, never – assume that your vendors will work together to make sure that one product integrates with another. This is the burden of the company to micro-manage every step of the process to ensure every vendor and every piece of hardware plays nice. The reason you outsourced in the first place was because this is not a specialty that made sense to be completed internally. When you look at that way, it does seem a little bit counterintuitive to manage a process you have little knowledge in. Beginning to see the breakdown?

Security Threats
How do you even know you are working with trustworthy vendor? Statistically, odds are, even if you do due diligence in vetting each one, a percentage of bad eggs will sadly slip through the cracks. In addition, this next notion is just a simple fact of life. The more people that have access to proprietary business data or information, the greater the risk.

Vendor Management

Now let’s take a look at the actual management portion. This is arguably the worst part of the entire multi-vendor process. To get the full effect of the pain that accompanies this process, bear with us as we run through the following scenario:

First day, call your point of contact at vendor A to leave a voicemail about a minor adjustment to the design. The next day, you find out your account manager is on vacation. Realizing with your project timeline you can’t realistically wait a week for him to return, so you attempt to call back and get redirected to someone else who will handle this in his absence. The next day, day three, they return your call and schedule your appointment for two days later. Now you need to call vendor B, because you had originally scheduled them for that day following vendor A. They will now need to be pushed back two additional days for the first vendor to complete the work. Vendor A completes on-time two days later and vendor B arrives only to find that the setup in design actually won’t suit their specifications at all. You will now need to call Vendor A back and reschedule for two days later to come fix the error, which will now take three days since they are undoing work from the first visit and will cost you for additional parts to meet the specifications of vendor B…

Does this scenario sound familiar? Managing all the point of contacts for each vendor and the never ending back and forth is tedious to say, at the very least, not to mention ridiculously time-consuming.

The Good…

Yeah, yeah. That’s all good and well, or bad in this case. So what can be done about it?

Speaking candidly, you will never find that perfect unicorn of a vendor that does every possible service under the sun (nor would you want that, because that probably means they lack in some crucial areas). Luckily for you and for us, the interconnectedness of today’s digital society has afforded most businesses, even relatively small ones, the luxury of easily training and adopting multiple adjacent product lines / services. It isn’t uncommon in the slightest for vendors to offer all different categories of a larger industry under one proverbial roof. In fact, some of the best vendors you work with right now likely offer a host of other services you could be bundling together, but don’t even know about. This intuitively increases efficiency due to the simple reduction in moving parts, but is also often times more financially sound as well.

Need an example? Take Cisco – they don’t just offer phones and IT hardware, they have messaging, video conferencing, security, wireless and the list goes on. However, we understand if you don’t want to go with the sterile, impersonal customer service that comes with large corporate infrastructures. We should all take a moment of silence for all the time lost by the poor souls who have ever had to call their cell phone carrier with an issue that needed addressing. Never fear though, there are always local vendors who can really attend to the specific needs of each individual customer. Not to embellish on our part, but it would be an oversight for us to neglect to mention that we are an all-inclusive technology solutions provider who can do just that.

In conclusion, our solution to the “over-vendorization” epidemic of 2016 is opting for vendors that can bundle. To reiterate, this saves time, money and hopefully your sanity. Small or large, it’s about choosing a trustworthy vendor that has the right combination of services that meet the unique needs of your business.

Leave a Reply

Your email address will not be published.