Have you ever considered how much of your IT Service Delivery time is spent managing vendors?
It’s OK if you haven’t, most don’t give it a great deal of thought. Actually, it often gets lost under other headings. For example, there may be a due diligence issue (that’s caused by your vendor selection!) and it creates a delay for your Project, chances are when you come to look back upon and learn from your Project it’s more likely you’ll remember that your issue was with ‘due diligence’ rather than ‘vendor selection’.
The point is, a lot of what you do is probably vendor management but because you’ve given it an alias or a pseudonym – it escapes your attention. It’s time to start calling a spade a spade. If you have five minutes of calm this week just ponder how much of what you do would fall under a heading of vendor management – you may be surprised.
I’ve had similar conversations with CIOs and IT professionals over the years and often the realisation of just how much time (and money) is spent (and lost) with difficult multi-vendor contract negotiations, vendors who under-deliver, weak SLAs, missed KPIs … i.e., how much time is spent managing vendors is enough to make them wonder if there is a smarter way. They usually find that smarter way not only makes things easier but also reduces costs and provides better value.
To give you an idea of what I mean, here’s a top five list based on my own experience. See if anything chimes with you here.
The Top Five Vendor Issues That Masquerade As Other Stuff In Your To Do List
1 – SLAs That Don’t Work
It’s rarely the SLA per se that isn’t working. A Service Level Agreement is just that .. an agreement about acceptable service level. If the service level is not as agreed – it’s a vendor management issue. Usually, it’s a combination of your vendor not pulling their weight and your vendor governance strategy not cracking the whip effectively enough. One solution may be to outsource Service Delivery Management! The right provider can give you back quality control, vendor transparency and reporting via a single fully structured managed service, guaranteed by effective KPIs and SLAs using ITIL best practice service frameworks.
Sometimes it’s not that the vendor is lazy or ineffective – it’s just that you’re not talking the same language – the marketing jargon used by your vendor can sound the same as the internal jargon that your firm uses, but if they’re not the same you’ll both head off in different directions with different expectations of what’s required. Having your vendor reiterate back the terms of the SLA in your language can eliminate confusion later.
2 – Contract Spaghetti And Silent Renewals
Contract negotiation can be difficult and time-consuming and in a multi-vendor environment, you can quickly find yourself tied up in knots … AND IT REALLY MATTERS.
The importance of a clear, complete and well-defined contract to the successful completion of an IT project cannot be overemphasised. It is the basis of the relationship between your vendor(s) and your organisation.
Successful outcomes in IT Service Delivery are closely aligned to successful relationships and win/win contract negotiations are the foundation of such relationships. The right IT service delivery provider can take on contract negotiation for you reducing the risk of ‘vendor lock-in’ and remove the burden of ‘supplier-side’ service contract management and reporting.
It can also be really useful to have a specialist in IT contract law in your corner – but who can afford to have one of them sitting on the bench waiting to be called upon? Outsourcing service delivery can allow you to access legal expertise.
Finally, contract negotiation can be a headache so it is probably not surprising that so many renew without renegotiation. This can be a really costly mistake to make. Yet, on a daily basis, it happens and there’s only one winner and it isn’t you or your Project.
3 – Weak Vendor Governance & Management
Do you even have a vendor governance strategy?
It goes back to that contract – governing vendors is like herding cats if you haven’t included specific terms and requirements into your vendor selection process and contract negotiation.
During the project’s lifecycle, much of that contract is not worth the paper it’s written on if you don’t manage your vendor relationships and implement best practice governance frameworks.
The internet is full of resources and suggestions and as with most things, in the ever-expanding IT universe, governance can be bought in “as a Service”.
4 – Putting Too Much Trust In Your Vendor
I just Googled the word vendor – the first result returned made me smile, merriam-webster.com defines a vendor as “a person who sells things especially on the street.”
If someone were to try to sell you something in the street you would raise an eyebrow and readily acknowledge that a deal that seems too good to be true – probably is. The man with a briefcase full of watches is probably not to be trusted so what about your IT services vendor?
Fortunately, many are utterly trustworthy.
Unfortunately, some are not.
And there’s usually only three ways to find out. Bitter experience, word of mouth or getting an IT service delivery partner who will come with their own scoundrel filter, someone who knows the market can save you time and pain.
Often, though, it’s not even a matter or whether a vendor is trustworthy or not. It can be just that familiarity breeds contempt. For instance, some vendors alert long term clients to cheaper solutions, some don’t. The right independent Service Delivery Management partner always will.
5 – Runaway Costs
I’m amazed how many firms are effectively handing IT suppliers a blank cheque. Without efficient vendor management, you could be too. Allowing contracts to renew without renegotiation, failure to keep an eye on costs as a matter of routine, bad payment terms, heavy markups, discounts that you’re entitled to not being activated and insufficient vendor analysis in the first place can all add to a much bigger bill than you budgeted for.
There are lots of vendor cost analysis templates available on the internet. They work for some, but in my experience, they only really work when you have the time and the disciplines in place to get the best out of them.
It’s a catch 22. The people who benefit the most are the people who need them the least, i.e. buyers who were already pretty disciplined in the first place.
Again, getting the right IT services partner on your side can help, often not only controlling costs but reducing them too.
Throughout all of these vendor management issues, meeting regularly, writing everything down and having your vendor restate your goals in your terms can really help. If it still feels like herding cats then look into an IT Service Delivery partner but choose one who will REALLY get to know you, your business and your culture.
The peace of mind that comes from working with a trusted partner is invaluable. Managed service agreement providers can deliver the transparency, accountability and reporting you need to ensure that you receive the best service possible.
Above all, you’ll spend less time managing vendors and more time doing what you actually do best!
Contact us to learn more about how Stoneseed’s Service Delivery Management can help you to improve the quality and reduce the cost of your IT Service Delivery.