Is a Single-Source (Managed Service Provider) or Multi-Source (Internal) Vendors Management Process right for your Business?
Deciding on a Vendor Management process is not easy. Cybersecurity threats are on the rise, and IT management has become more and more complex. Small businesses face increasingly complex and costly challenges. These challenges include trying to manage IT responsibilities with a single staff member or at best a small team. As small business owners investigate their options, many find that IT service providers understand their technology needs better than they do. Furthermore, any decent IT services provider can offer timely and insightful technology solutions for their real world business needs.
Stay in your zone of expertise with relationships that will help you increase performance
More small business leaders are realizing their time and energy is best spent in their zone of expertise. And that IT management of their business is best left to outside vendors who are well-trained in the varied technologies available today. Furthermore, their understanding of technology including cybersecurity makes them better equipped to find the right solution for any business need. An IT services firm is often the most strategic choice to ensure the best protection of your business, your data, and the services that you are providing your customers.
But even if the reason to outsource becomes clear, what’s not always quite as obvious is the best path to take when seeking the right vendor management structure.
Key considerations for a business leader when considering a vendor management process
Can a small business leader feel confident that an outside vendor will genuinely be committed to the business’ success? Arguably yes, if they choose a vendor who aligns with some crucial considerations. According to the SBA there are functions that small business can easily outsource including IT Management. According to the small business Administration there are 10 small business functions that can be easily outsourced.
The key is to ask the right questions, some of these include the following.
Can the vendor drive business process benefits while minimizing risks?
Your chosen vendor should bring more value than all the others. This is where understanding everything about your business and the available technologies comes into play. With a clear understanding of both of these you can better select the vendor that will add the greatest value to your organization.
Does the vendor’s operation and plan align with your business outcomes and goals?
First, based on the proposals, select the vendor that brings the most value. Secondly, we must further dig into their suggested plan. Finally, answer the important questions as to whether or not the plan and ultimate solution, brings the goals and outcomes you imagine for your specific business need.
Are these vendors a good fit for your business culture?
Ok, so you found the right vendor with the right plan to fit your business goals. Now we look at whether that vendor can align with your company culture. Like any new employee the vendors will be interacting with many people within the organization. We must ensure a good culture fit in order to be successful.
Can the vendor be flexible enough for your changing business requirements?
Projects especially technology projects require flexibility in order to ensure success. Many times the project will evolve as we progress. You must have a vendor that is willing to change. Furthermore, the vendor must have a good change management system to track and manage issues. This will all be important in completing and subsequently supporting the new implementation.
Multi-source or single source vendor relationship management process
Is it best to pursue single-source IT vendor management process? or is multi-vendor outsourced process the better approach? Let’s examine some of the pros and cons of each.
Multi-vendor outsourcing: pros and cons
Some of the top advantages of multi-vendor outsourcing include:
- You always have a fall-back option. If one vendor drops the ball and fails to perform, you’ve got a simple backup plan in place.
- When a few different vendors know they’re vying for any new business, they’ll always be positioning themselves for greater leverage. And a little competition can be good for ensuring that attention is being paid to your needs.
- Casting the net wide for multiple vendors can make some businesses feel more comfortable that they are getting the best-suited services. The “strength in numbers” approach can be reassuring to business owners who prefer that additional coverage.
The sense of security you gain with multiple vendors must be balanced with this question, though: where is the real boundary of services provided by each one? A nice overlap is great – but what if the sum of their coverage doesn’t cover everything you need? If you’re not confident of that answer, you may actually be operating with gaps in IT coverage and not even know it.
It is becoming clear that a myth still exists in the business world – “if you want to be truly secure, always go with a multi-vendor solution.” In other words, if you want to make sure all your bases are covered, have plenty of companies lined up to have ‘players’ everywhere you might need. But that myth is becoming easily disproved as single vendors are often managing multiple vendors for you, but you have the convenience of just one call to make when the need arises.
That brings us to a quick assessment of the single-source vendor approach.
Single-sourced IT vendor management service: pros and cons
The beauty of single-sourced vendor management to a small business owner is its simplicity. One number to call if there’s a problem. One place to seek an answer, especially when time is of the essence. One vendor manager who understands the big picture of your business needs. This allows the single source to chart an informed course for the business.
Of course, there are questions you’ll need to have answered as you consider if a single-source vendor manager is truly best for your needs.
Are you using vendor management best practices?
Believe it or not there are best practices for vendor management. Many Single-source solutions are at best an as needed solution with little to no structure. Some of these best practices as described by Vendor Centric in 10 Best Practices for Emerging Vendor Management Programs include:
- Right-size your vendor management program.
- Set the right tone at the top.
- Establish governance and engage your stakeholders.
- Get Visibility into your vendors and contracts.
- Know which risks apply to which vendors.
- Don’t skimp on due diligence.
- Be disciplined in contracting.
- Establish expectations during onboarding.
- Monitor and grow the relationship like you would any other.
- Have a formal process for breaking up.
Are the scope and services of the management firm broad and diverse enough for your business needs?
When going down the route of a single-source vendor manager you must ensure that the skill set and experience of that source is vast enough to deal with all the aspects of your needs. These must include all the vendors you are currently dealing with as well as those you may deal with in the future. The biggest mistake most make is basing their decision purely on price point. This will most often lead you to vendor managers that do not have the experience needed to deal with all your vendors. Learning on your dime is never pretty!
Is the vendor manager beholden to certain brands, or are they vendor agnostic?
Now you get to a difficult question to answer since most all vendor manager will say they are vendor agnostic when the truth is quite the opposite. Many, especially MSPs, claim to be vendor agnostics but will always push one vendor over the other. They even go as far as to force you to buy things through them. Be weary of such companies as their loyalty is with their margin and not your company’s best interest.
As your business grows, will this vendor manager be able to keep pace?
Growing and scaling your business is challenging enough when you don’t have to worry about your vendor managers ability to do the same. Make sure you are confident that your partners can scale with you or replace them when they start showing signs of falling behind.
Conclusion – Vendor Management Strategy
With a single-source vendor manager handling your IT vendor management, there’s no need for blame games or finger-pointing should issues arise. Instead, your IT services provider will collaborate with each vendor to resolve any problems so that you can keep your focus on your business.
A trusted relationship with a single-source vendor manager can help you make confident choices with your IT needs as your business grows and you need new levels of service, security, and support.
With deskside’s centralized vendor management on your side, you can realize the better benefits of varied IT solutions matched perfectly to you with a single source for all vendor support.