In a large company it can be very challenging to manage the IT needs across all the business functions. Companies are increasingly outsourcing more and more of their IT functionality to dedicated service providers who can provide the necessary skills, products and services. This brings in new challenges in the form of implementing and managing agreements with multiple vendors. It is therefore important for companies to have a well-defined multi-vendor management policy in place, in order to optimise the return gained from the various vendors.
Some suggestions for optimising a multi-vendor strategy include:
Build in sufficient governance – it is important to create a central function which will manage all vendor relationships in a multi-vendor environment. This will allow for better quality management and a clear oversight of all contracts. This ensures that issues don’t fall through the cracks and enables better relationships with vendors.
Consolidate smaller work volumes with preferred vendors – it is not necessary to have a different vendor for every single functionality. By selecting one vendor for several different functions, it is possible to create economies of scale, attract better bids, and reduce contracting costs.
Use a common contracting model across all vendors – it is very difficult to manage a wide variety of different contracts. This can be avoided by taking a master agreement approach and using common service descriptions and service level methodology across all vendors. This creates a level playing field for better contacts and easier contract management.
Maximise flexibility – a multi-vendor environment should not create separate and inflexible solutions which do not work with one another. It is important to blend the various contracts and ensure that the various vendors are capable of working together and supporting each other.
Create an integrated service management approach – a lack of accountability can lead to finger pointing. It is therefore important to identify key dependencies with various vendors and ensure that there are proper KPIs and SLAs in place so that problems are solved by the vendor and not by the customer.
While multi-vendor management may seem complex, if a company correctly leverages its potential, it can be a great business tool. By correctly managing service providers, companies can improve their performance and get the most out of their outsourced skills, products and services.