The importance of effective IT vendor management to your business’s success
Aligning technology with business goals is one of the biggest challenges today’s business leaders face. Although it seems simple enough in practice, there is a dizzying array of IT solutions, vendors, and best practices.
When you’re tasked with implementing technology that adds real value to your company, it’s almost impossible to find a single vendor that will be able to tackle every IT issue your business has. That’s why organizations typically work with a large network of vendors and partners, which can be confusing, frustrating, and dangerous.
A vendor management process allows businesses to reduce costs, enhance efficiency, and — most importantly — reduce risk. The process involves four key areas:
- Analyzing performance
- Mitigating risks
- Assessing and building valuable relationships
- Managing contracts
Small-business technology is fast moving towards an environment where everything follows the ”as-a-service” model. This means technology solutions are delivered as monthly subscriptions rather than hefty upfront purchases. It also means a cohesive management process is essential for success. Here are some ways a managed IT services provider (MSP) can help with that process.
Building a dedicated vendor management team
Like any complex, multifaceted business process, vendor management is best tackled by a team of experts who can use their collective knowledge to achieve technology alignment. An MSP can handle that for your entirely, from choosing the right vendors and service providers to maintaining close and value-adding relationships with them.
Whoever is handling vendor management should have a thorough understanding of your business objectives and priorities so they can oversee every transaction and agreement between your organization and third parties. By serving as a single point of contact between you and your technology providers, an MSP assumes responsibility for fulfilling your goals and reducing risk to a healthy minimum.
Organizing your suppliers and vendors
Every business should maintain a database of its current suppliers and vendors and classify them based on the nature of the services they offer and the business data in their care. For example, a cloud storage provider might handle confidential data on your behalf, in which case you’ll need to verify that is has an excellent digital security track record.
Most IT vendors are critical for the continued operation of your business, so they’ll usually be considered long-term business partners. Keeping a database of your current vendors provides quick and easy access to emergency contact details, while also making budgeting more efficient.
Managing cybersecurity risks
Mitigating risks is the most important component of a vendor management process. Now that it’s commonplace for businesses to store their confidential data across a wide range of online services, it’s crucial to know where your data lies.
In fact, conducting regular IT assessments are a fundamental legal duty of any organization that places its data in the care of third parties, since compliance regulations place the ultimate responsibility on the organization rather than on their partners. As such, confidentiality is a core part of establishing lucrative relationships with your vendors and technology partners. These obligations will also be stipulated in their contracts, and it will be a core responsibility of your vendor management team to oversee them.
Prioritizing value over commodity
Many business leaders see technology as little more than a commodity, and sometimes they even regard it as a necessary evil that they must adopt to remain competitive. In such cases, simply getting the lowest price tends to be the top priority. However, this mindset is practically guaranteed to lead to failure.
In fact, it’s perhaps a better idea to stop thinking about vendors altogether, and start thinking of them as long-term business partners who can deliver real and tangible value to your business. After all, short-term cost savings mean nothing if they lead to you missing out on crucial opportunities, falling victim to a disastrous data breach, or sacrificing employee productivity or morale.
Having lots of options can be overwhelming, which is why ITS offers IT vendor-management services to businesses that want to turn technology into a valuable asset, rather than an ongoing headache. Call us today to start profiting from our expertise.