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Best IT Vendor Management Practices

By June 11, 2021No Comments
IT Vendor Management Practices

According to a report from Gartner, organizations are spending more than 60% of their IT budgets on vendor services, outsourcing, and products. It can be very difficult to manage all these different IT vendors. However, still, most companies are choosing multiple vendors instead of going with a full-service IT management company. This model can be tough for businesses as they need to juggle multiple business relationships. In this article, we are going to share the best IT vendor management practices. These practices will help you in managing multiple IT vendors.

  1. Don’t use niche or single service vendors

Cost containment is the main goal of most businesses. Due to this, many businesses only look for the services that they need. They work with vendors who are experts in that specific niche. If there are multiple vendors, then businesses will go with vendors that are offering services at a lower price.

The main problem with this approach is that you will end up working with various different vendors. If you are finding a separate vendor for each need, then it will become very difficult to manage different vendors.

If you are working with multiple niche vendors, then these vendors will find it difficult to understand your company. They won’t understand the complete picture. It will be difficult to understand the culture, values, IT landscape, and pain points of your company. If you are working with fewer vendors, then you can build a good relationship with your vendors. This will ensure that your vendors will actually act as your business partners.

There are various full-service providers that can deliver multiple services to your company. They might not be the lowest-cost option available in the market. However, you can recover your cost from the efficiencies that you will gain by working with a single vendor. You will save a lot of time and energy as you don’t need to worry about managing multiple vendors. Virtual CIO or vCIO can also help you in managing your IT. They will help you in managing your vendors.

  1. Use standard contracts

If you are working with multiple vendors, then you need to juggle between various contracts. Most contracts will use individually-tailored terms and language.

Standardized contracts will help you in setting uniform SLAs. This will ensure that you will have access to uniform SLAs. If you are not doing this, then you might need to deal with various different service standards. For example, different vendors will offer you different service availability rates. If all these services are working in parallel, then this can impact the SLA that you are offering to your customers.

Your vendor is just one piece of a big puzzle. You should ensure that they will work well with other pieces. Standardized contracts will ensure that you can quickly check the efficiency of contracts.

  1. Work with an IT vendor management team

You need good governance practices for managing complex IT service agreements. These practices will include financial, contract management, performance, and robust relationship activities. Some of these activities are extensive in nature. They are different from the IT skills that are used to manage service delivery.

Most companies are solving this problem by working with vendor management. You need a particular skill set for managing vendors. Employees that are trained for IT management don’t have these skills. These skills will mainly include:

  • Performance analysis: You should understand the impact of vendors on your business.
  • Risk management: You should make sure that the vendor can actually fulfill their contractual obligations. It is also important to ensure that your vendor won’t put your business at risk.
  • Relationship management: You should develop a good relationship with your vendor.
  • Contract management: You should keep track of all the expiring contracts. This will help you in choosing the perfect renegotiation time to maximize terms and leverage.

If you are working with a vendor management team, then they will have all these skill sets. These skill-sets will help you in maximizing your vendor’s performance. It will also ensure that you are saving money. They will help you in streamlining the number of vendors that you are working with. Your team will help you in reducing them to a manageable level.

  1. Vendor performance metrics

You should measure your vendor’s performance. There are various criteria’s that you can consider. You should also ensure that you are getting a good ROI. Measuring performance will help you in mitigating your risk. You can use this data for negotiating your contracts in the future.

Your performance metrics should include these things:

  • Service level.
  • Quality level.
  • Use of EDI.
  • Presence of certification.
  • Quick response time.
  • Communication skills.
  • On-time delivery.
  1. Participate in meetings

You should have regular meetings with your vendors. The structure and frequency of these meetings will depend on your vendor. If some vendor is doing some very important work for you, then you should have more meetings with time. These meetings are the perfect time to hold your vendor accountable for the services that they are providing.

Vendor meetings are a very important part of your vendor management strategy. You should work with your vendors for developing KPIs or key performance indicators. This will help you in improving your relationship with your vendors.

You should maintain regular communication with your different vendors. Some companies think that holding meetings is a very time-consuming process. However, you should consider these meetings as an investment. These investments will help you in developing a better relationship with your clients. It will ensure that you can quickly solve your issues.

Conclusion

You should try to implement an IT vendor management framework. This framework will help you in following the best practices. It will help you in improving your relationships with your vendor. The best way to solve this problem is by working with a good MSP. Experienced MSPs like Bleuwire can provide you all the IT services that you need. This will ensure that you don’t need to worry about working with different vendors. Bleuwire will help you in managing all the IT-related stuff. If you need more information regarding IT services, then you can contact Bleuwire.

Contact us today to learn about Bleuwire™  services and solutions in how we can help your business.

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