IT vendors help stretch the budget, offering valuable services, products, and support. These vendors allow IT departments to get more work done with fewer employees, keep essential equipment running, and provide useful software that would be extraordinarily expensive to develop in house. But many organizations waste untold amounts of time, money, and resources by failing to properly manage vendor relationships. Does your organization suffer from one of these signs of vendor management problems?
Failing to Collect Solid Data on Vendor Performance
Sometimes, organizations stay in poor vendor relationships simply because they lack the data to determine how well the vendor is performing over time. It’s critical to keep accurate logs of how well the vendor is living up to the promises they made to your organization. Often, it’s helpful to establish a single worker or a team of workers with the goal of tracking vendor performance over time. When a vendor fails to perform, it’s time to renegotiate or shop for another vendor.
Lack the Understanding of How the Vendor Performs Across the Organization
Vendor relationships are often established with the IT department, but then go unmonitored as the vendor provides products or services to other departments. The party responsible for vendor relationships needs the ability to track vendor performance across departments to identify gaps in service, failures in performance, or poor customer service.
Paying for Services on Retired Equipment or Software
Without help desk software that has asset management capabilities, it’s easy to keep paying vendors for maintenance or service on hardware or software that is no longer in use. With asset management, you can identify hardware and software that’s underused or unused and allow those vendor contracts to expire for significant cost savings.
Failing to Realize When Vendor Contracts are Up for Renewal
When a contract expires, this is your opportunity to negotiate for additional services, lower costs, or extra features. It’s also the time to identify vendors you no longer need or those that aren’t performing and find a new one. Asset management can also help you track contract renewal dates to aid in negotiations.
Neglecting to Monitor the Solvency of Vendors
Are your vendors strong financially? If not, you face the possibility that their company will fold and leave your organization without necessary support. Keep track of how your vendors are doing and only sign contracts with solid companies that are sure to be around for the long haul.
Failing to Utilize All of the Benefits You are Paying for
Are you getting all of the services and features you’re paying for under your existing contracts? Sometimes, IT vendor contracts come with annual maintenance packages or special features, and if you’re not tracking these things your company may not get everything you are entitled to under your contract. If the vendor owes you, make sure you cash in.
The trend is to depend more heavily on fewer vendors instead of contracting with lots of vendors for a limited number of services each. This does help vendor management, because it’s easier to monitor the performance of a vendor relationship when there are fewer of them. This setup also allows you to bundle packages and services for greater savings.
Just be aware that vendors depend on up-selling for revenue — which means selling as many services and features as possible to each client, so they can make more money with the clients they have. Always pay close attention to the contracts so that you aren’t paying for more than you need and aren’t buying goods, services, or optional features you have no use for.