Vendor Management is Crucial in Managed Services

Posted on Jul 18, 2013

There are many ways to measure the performance of your IT service provider. For example, are Service Tickets being completed in a timely manner? Are regularly scheduled backups occurring like they should? Is your network secure? Is your IT infrastructure maintained in a proactive and systematic fashion? All of these concerns and more are reasonable to inquire about and expect satisfactory answers to. However, there is one important area that is commonly overlooked in evaluating your IT service provider’s performance How well does your provider handle the important task of vendor management?

For many organizations, vendor management is not even considered to be an area of IT concern. In fact, many IT providers don’t even offer this service as a part of their IT managed service offerings. They don’t recognize that vendor management to be a great barometer for judging the effectiveness of an IT service provider, as well as an area that can help you make a rationale decision if you are in the process of selecting a new IT service provider. Choosing an IT service provider based in part on their past performance of the vendor management function can result in incredible cost savings for your company in the future.

Many companies today have situations where different business segments have created relationships with various vendors. Some of these vendors actually overlap and could result in your company paying twice as much for a service that could be handled by one vendor instead of multiple vendors. Bridging the requirements between these different “silos” is of the utmost importance, and unfortunately, there aren’t many people who are formally trained in managing vendor relationships. Inexperience can lead to a variety of bad scenarios. Negotiations can result in less than favorable contractual terms. Contracts are auto-renewed without notice or updating. Hardware or software might be purchased at higher prices than necessary. Unfortunately, these are just a few of the all-too-common occurrences in today’s business cycle.

An IT provider that values expert vendor management as a corporate asset can prove to be a great benefit to your company. Providing corporate management with consistent and transparent reporting on current vendors can help steer spending decisions down the line. Creating templates and Best Practices can also help manage the demand coming from the different offices in your business. Understanding the terms of contracts and the risks involved with each vendor will help your business make informed choices.

Having a knowledgeable IT provider manage the work of various vendors will also promote higher quality products and services and lower costs from suppliers, while simultaneously improving key vendor relationships. Valuable time can be spent with each vendor, and in many cases the vendors enjoy dealing with liaisons that are more technical and experienced. There is also the likelihood that these vendors have worked previously with your IT provider and have a vested interest in making sure all contracts are equitably executed.

In previous years, the corporation’s finance office would handle vendor relationships, but with the increased time required to deal with each vendor today, there just aren’t enough hours in the day. Instead of this leading to potential overspending and a variety of other issues, make sure your IT support provider can remove this unnecessary burden from your shoulders. With a quality IT service provider keeping track of bids, vendor performance, previous contract terms, alternative providers, and technology differences, you’ll have a valuable resource that will give you the confidence that your money is being well spent and that vendor management is being accomplished in a cost-effective, highly efficient manner.