November 2021: Vendor Management

Vendor Management: Leverage your Technology Support Providers

By: David Nelms

In today’s rapidly changing business environment, having solid relationships with your technology vendors is crucial to the successful use of your technology. As organizations evolve, so does technology’s role and how the organization provides support for their technology. They often rely heavily on the support provided by external vendors, also known as  Managed Service Providers (MSPs). The lack of oversight and active management of the relationship frequently plays a significant role in why organizations struggle with vendor and system issues.

To start, during the selection process, the right questions are not asked. Then once the selection is made, not enough time is dedicated to managing the relationship. To maximize the investment in your technology, the thought process needs to shift. Businesses need to reevaluate how they perceive vendors and start to consider them as part of the team. For your vendors, use the same basic process you do to hire, onboard, and manage employees. Based on that, here are three ways to help you better select, manage, and engage with your technology partner:

1. SELECTING YOUR VENDOR

Due diligence is critical when adding a new system(s) to support your business. As with hiring new employees, the vendor selection process needs to be clearly defined and outlined. The process should always cover:

  1. Identifying at least three potential vendors
  2. Understanding their capabilities & cultural fit
  3. Getting references
  4. Determining the short & long-term cost

Issues often happen when a vendor’s complete role within the organization is not fully explored. Select a partner you feel confident will address the immediate problem(s) and proactively address potential ones.

Do not just focus on understanding specific up-front costs. Determine the expected Total Cost of Ownership (TCO) over several years; consider growth and potential needs for additional projects or services. You want to avoid any unpleasant financial surprises.

Lastly, do not get overwhelmed by all the information presented by the vendor during the “selling stage.” Part of the vendor’s sales pitch is to tell you everything they can do for you, which may be confusing and likely not apply to you. A well-structured RFP will provide good insight to determine fit.

To help you feel confident about your decision, here are questions to consider asking during the selection interview process:

  1. How many years of experience does the company have in offering the specific service?
  2. How do they communicate and share information? Do they consistently use terms you understand? Are conversations typically focused on the technology versus the needs of the business?
  3. What processes do they have in place to measure and communicate the status of key indicators and continually make improvements?
  4. How do they help you balance costs and risks when recommending new technologies?

2. MANAGING YOUR VENDOR

Once a vendor is selected, proactively manage them by setting SMART goals (Specific, Measurable, Attainable, Relevant, Time-based). This means regularly tracking progress, reviewing accomplishments, and addressing new and/or potential issues. Avoid putting the relationship on “auto-pilot” and only being in contact when there are issues. Remember, the objective is to manage the vendor as you would an employee.

As you do with your employees, meet regularly to discuss your business goals, actions the vendor is taking to remain proactive, and potential concerns. Service levels for key areas should be clearly identified and included as part of the regular discussions. If your vendor brings up potential new risks and needs, it is your responsibility to determine if any of them apply to you. Making this determination requires a focused evaluation followed by clearly identifying which technologies (if any) may help solve the problem. In general, the vendor’s added value should be in providing a deep knowledge of technologies that are available to address a wide variety of risks and other needs. Before following through with recommendations and adding any new technologies, you should clearly understand how they align with the needs of the business.

If any issues come up with your system(s) or the level of support provided by your MSP, be firm but fair with your partner when addressing them. Focus on identifying the cause and resolving it; not on finding who is at fault. If the partner can not identify the cause of the issue(s) or is unwilling to correct it, this may be a red flag.

3. ACTIVELY LISTEN & MANAGE

Our experience is most vendor partners make recommendations in the best interest of their clients. However, they often do not communicate their reasons well. Sometimes, the data to support their recommendations is incomplete, or they may not understand your needs. If new services/products are suggested, work together to understand how their proposal will improve efficiencies and address your needs. Keep in mind, there may be business challenges that technology singularly can not resolve. As we often tell our clients, technology alone is rarely the problem or the solution.

As previously mentioned, it is up to the organization to determine if recommendations and investments in technology are appropriate. It is also up to you to understand what’s involved in leveraging these investments. Make sure you consider the time required to change any internal policies, processes, or training. As with your employees, take a “trust, but verify” approach when working with your vendor(s). Ask questions. Even if you do understand, still ask questions to make sure your assumptions are aligned. If you are uncomfortable asking a specific question, get someone who is. The emphasis here is on nurturing the dialogue.

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In summary, we all know that robust, well-managed technology is critical. Actively managing and communicating with your partners is essential to making sure that the technology continues to be leveraged. Managing these relationships takes both time and skill. If you have any questions or seek further clarification, please call David Nelms at 804-513-6581 or email him at dnelms@warrenwhitney.com. We’re happy to address any challenges you may be experiencing.

MAKING POTENTIAL HAPPEN