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20 Cost-Conscious Tips for Global Businesses Working with Multiple Vendors

by David Spark

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The chances you’ll be able to find one vendor to answer to all your IT issues is pretty slim. That’s why many companies, especially those expanding globally, try to amass a collection of “best of breed” tech vendors or an IT “A-Team.”

WARNING: This article includes some conflicting advice.

When we reached out to industry experts to get their thoughts on best techniques for working with multiple vendors, we go a lot of tips, and a few were conflicting. Instead of passing judgment as to which advice was best, we decided to offer our favorite and most popular recommendations, even when they flew in the face of some of the other recommendations.

1: Diversify vendors

The single vendor strategy of “one throat to choke” has never been viable, argued Dwight Koop (@dwightkoop), Cofounder and COO of CohesiveFT.

“Pay the cost in terms of price and staff expertise to achieve vendor diversification in every aspect of your production technology topology,” said Koop.

“Clearly understand what each vendor is providing,” chimed David Morgan, VP of Sales Engineering at Windstream. “Enterprises must ensure that all aspects of the project are covered without any overlapping services. This is key to avoiding additional vendor fees and mitigating hidden project costs.”

2: Make sure vendors play nice with each other

“Have one vendor who is responsible to project manage across all vendors, and ensure all of the vendors play well with each other, that the responsibilities are clearly defined, and no vendors can ‘knock out’ any of the others and assume their responsibility,” said Morris Tabush (@morristabush), Principal for the Tabush Group.

“It is easy for vendors to get into the blame game and finger point at each other,” warned David Boone (@paranet), CEO of Paranet

“When you get the different (OEM) parties who would normally be bitter rivals in practice, to work collaboratively, it brings both challenge and risk,” said Assad Noori (@DiDataInsights), Group Head of Delivery Operations, International Business Unit for Dimension Data. “Ensure that the benefits, incentives and rewards are aligned correctly to help avoid unnecessary disputes and service impacting conflict and disharmony."

“It’s a small world,” pined Joe Silverman (@NYComputerHelp), Owner of New York Computer Help. “I’ve seen past grudges between phone cabling companies and internet service provider companies not carrying over well on the next job.”

3: Dual vendor strategy keeps them on their toes

“The real procurement advantage of dual vendor strategies comes not from having sales reps competing but from having a real option to go with either vendor,” said Mike Bushong (@mbushong) blogger and VP of Marketing of Plexxi. “It’s the threat of replacement, not the mere presence of a branded mug, shirt, or device that matters. Even if you make a token purchase from their competitor, they know what it really takes to kick them out. And they will price accordingly.”

“Always utilize multiple vendors, and make sure those vendors know about the others, to ensure they are putting their best foot forward on both price and performance,” concurred Isaac Conway (@Latisys), Director, Network Engineering for Latisys.

“Set them up to compete with each other,” advised Pat Harper, CIO for OpenText. “Competition drives both quality and pricing in a positive direction.”

4: Work with a single or small group of vendors

“Typical multi-vendor pain points are the ability to service hard-to-reach locations, managing the ‘last mile,’ and determining which vendors will service which regions,” argued Bob O’Brien (@bobobrien), VP of Network and Oil, Gas and Mining Solutions for the Americas for Orange Business Services. “The more vendors that are in the kitchen, the harder it is to cook a meal.”

“My preference is to work with companies that have both a ‘broad reach,’ and a consistent service delivery model in all locations where they do business,” said Tom Hart (@ThartCMO), CIO for the Eliassen Group. “When vendors employ a consistent service delivery model, it ensures that the same predictable quality of service can be relied upon.”

“While some may see multiple vendors as decreasing risk, it can actually increase risk and complicate the management of SLAs and responsibilities when an issue needs to be managed,” argued Ben Trowbridge (@Ben_Trowbridge), Chairman for the Outsourcing Center.

“It's preferable to use the same vendor or product throughout your operations, for obvious reasons: everything is uniform, which makes support, knowledge, and training very manageable,” said Gregory Fleming (@AFriendlyNerd), Senior Systems Engineer for Phoenix 2.0. “But one mustn't hesitate to use whatever vendor or product works best for any specific scenario, especially where locale is concerned.”

5: Share contact information

“Make sure other vendors have each other’s contact info if they need to reach someone,” said Nestor Rincon, (@RinconDynamic), owner of Rincon Dynamic IT Support, “Vendors often have to work together and it is best for them to cut out the middle man.”

“Too many people come and go, and when you are dealing with numerous suppliers and vendors, it is inevitable that a key person will leave the project or the company,” said Steve Prentice, (@steveprentice), Senior Writer for CloudTweaks, of the reality of working with multiple vendors.

“Documentation and getting team members familiar with the process is crucial to centralizing vendor information,” advised (@Adam_Haines), Director, Systems Engineering at Federated Sample.

6: Understand legal issues in new countries before you sign

“Operating in different geographies isn’t just a matter of the challenge of managing multiple vendors, but also managing those vendors under different legal and commercial practices associated with different countries,” said Bernard Golden (@BernardGolden), VP, Strategy for ActiveState.

For example, Golden points out that Germany has more stringent requirements for software licensing. In the U.S. software licenses essentially say that the vendor does not warrant the software will perform as promised. That’s not possible in Germany.

7: Choose partners who adhere to standards

“Choose partners (vendors) with global presence who sit on standards bodies,” said Michael Krieger (@M_Krieger) Principal for MRK Marketing Services. “You don’t want to end up with a variety of geography-specific technologies. It’s difficult enough to ensure compatibility between infrastructure and cloud providers when there’s only one or two in each area.”

“Two similar technology solutions from different vendors, such as a WLAN, in a single building or campus will lead to extra design consideration; RF interaction, client roaming, quality of service, and more,” said Cal Calamari, Global Solutions Lead for Enterprise Networks and Communications for Motorola Solutions. “Don’t set yourself up to manage, troubleshoot and support dissimilar systems and potentially end up with vendor finger pointing when issues arise.”

“Establish and enforce equipment, functional and procedural standards. Different vendors do things their own way and without a set of standards for them to conform to, an expanding global company will end up with ten different ways of doing the same thing,” warned Abdul Jaludi, CEO of TAG-MC.

Jaludi suggested you require each location to only purchase specific equipment from a pre-defined standards list. It’ll benefit you greatly as “vendors will do almost anything to make it to the standards list, including very aggressive pricing on equipment and support,” said Jaludi.

8: Don’t fall for pseudo-open solutions

“When vendors learned that most global enterprises were no longer going to fall for vendor lock-in, they started creating their own pseudo-standards – most of them coming with the word 'open' as the prefix,” said Karthi Subramaniam (@ADARAnetworks), Chief Software Architect at ADARA Networks. “Vendors tend to use this word to lure the enterprises, show them their published open source code and then eventually force them to migrate to their enhanced/extended open source (a.k.a. proprietary) products that can work only with their products.”

9: Test interoperability before you sign a contract

“Too many times in my past, I’ve worked with organizations which have purchased software, hardware, or even a SaaS solution to discover that integration isn’t what it was purported to be in the sales process,” warned Evan McCutchen (@Technology_Adv), CIO for TechnologyAdvice.

McCutchen admits he’s fallen victim to such untested sales claims. “Pre-evaluation of vendors’ sales claims can save many headaches in the integration process,” said McCutchen.

“In the best situation your vendors will have not only APIs, but pre-built integration modules that allow their equipment to easily interoperate with other key equipment, right out of the box,” said Jay Botelho, (@jaybotelho), Director of Product Management for WildPackets.

10: Measure vendors’ performance against business outcomes

“Create one set of metrics to intended business outcomes, and measure all vendors against these metrics so you can produce a ‘Vendor Performance Matrix’ showing who is helping you succeed; and who is not,” suggested Tim Montgomery (@TIMITSolutions​), President of TIMIT Solutions, LLC.

Don’t measure on technology performance, but rather isolate a metric that truly measures how a vendor’s work is driving business results. It might be best, advises Montgomery, to partner with a vendor so their business goals are aligned with yours.

11: Collect performance data early and often. Don’t rely on Service Level Agreements alone.

“We advise network managers to take a, ‘trust… but verify’ perspective,” said Bruce Kosbab (@BruceKosbab), CTO of Fluke Networks Visual.

“An SLA from a network or cloud provider promising connectivity and uptime is great,” said Matt Larson (@matthewhlarson), CTO of Dyn. “But you still need a baseline to compare against and constant measurement from a performance monitoring vendor to keep your service robust and ensure you're getting your money's worth.”

“Test their customer service and make sure their process of handling customer issues fits your needs,” said Michael Fimin (@netwrix), CEO of Netwrix. “Inadequate customer service can mean lost investment and resources.”

“By deploying an end-to-end visibility solution, teams are able to see,” said Kosbab, “Whether service providers are really abiding by their bandwidth SLAs and if vendor tools are providing the performance they guarantee.”

“When fast growing companies take the time to evaluate new vendors and test them on practical challenges, they increase their chances of ending up with innovative and best in class solutions,” said Max Dufour (@maxdufour), Partner with Harmeda.

12: Deploy a managed IT platform

“IT cannot continue to rely on a siloed approach that is based upon complex, non-integrated, and point tools,” said Bill Talbot (@btalbotjr), Senior Director of Product Marketing, Infrastructure Management for CA Technologies. “A unified IT management approach is critical to ensuring an optimal customer experience.” 

Raju Chekuri (@rajunetenrich), CEO of NetEnrich, refers to this as a “single-pane-of-glass infrastructure.”

“The end result is less finger pointing, speedier time to resolution, and improved customer experience, as well as less headaches and hassles by not having to waste time managing all those supposed ‘management’ tools,” said Talbot.

“Only in this manner can they have the visibility and control over technology complexity necessary for business agility and innovation. If you cannot see problems, you cannot fix them and you cannot tell the business what is working and what is not working,” said Chekuri. 

13: Straightforward communications

“With a lack of communication, chaos can be caused which in turn can affect overall business of the enterprise,” said Sanchit Gogia (@s_v_g), Chief Analyst and CEO of Greyhound Research.

Gogia says the best vendors are responsive, reach out proactively when there’s an issue, and provide a timeline to resolution. If they don’t do that, Gogia suggests you start looking for new vendors.

While some appreciate the nuance of phone calls, Bob Poston III (@kineticteam), Vice President and Chief Technology Officer at Kinetic theTechnologyAgency, is adamant that you don’t give out a phone number and insist that they email.

“Written words are less open to interpretation than phone conversations,” said Poston.

Although Michael Spratt (@milkmanstl), Sr. Customer Operations Support Specialist for MasterCard believes you need to pick up the phone when an email thread gets out of hand.

“I use the ‘4 emails = a phone call’ rule,” said Spratt. “We all want fewer emails. Pick up the phone if your inbox starts to get cluttered with the same subject line. It just helps the vendor relationship.”

14: Enforce collaboration through shared responsibility on SLAs

“Put incentives in place to motivate collaboration among the providers,” said Lois Coatney (@ISG_News), Partner with the Information Services Group. “For example, during the contracting stage, include specific terms mandating collaboration in interactions with other providers.”

“If you have multiple vendors working on a common goal,” said Ozzy Macias, Manager of IT at the Miami Marlins, “They should have some type of transitional knowledge of the peripheral technologies and dependencies they will impact.

“Implement pain sharing through end-to-end SLAs, whereby service levels span the entire transaction. Rather than each provider being responsible for one specific piece of the transaction, all of the providers share responsibility for the entire transaction,” said Coatney. “This means that when the SLA is breached, all of the service providers involved share in the penalty.”

15: Have a local liaison

“Make sure you have a local ‘hands-on’ vendor that can help to pull all of these pieces together,” advised Christopher Zibailo (@dscicorp), Director of Sales Engineering at DSCI. “Sometimes just having someone who can physically verify where circuits have been installed, what facilities are available, and what problems have been encountered on-site makes all the difference.”

“Have someone with a common culture and language who is well traveled enough to have experience ‘on the ground’ to locate and point out the potential pitfalls,” said Eric Ingram, Adjunct Instructor at APT College, LLC. “Locale specific knowledge will be far more imperative than whether or not that person actually has industry specific skills.”

“I can think of a number of installations over the years where one vendor is saying one thing, another a contradictory thing, and having that person on-site has allowed us to find out what the truth is and keep the installation moving forward,” said Zibailo.

16: Go with local suppliers and global suppliers that can go local

“As you expand globally, look for local suppliers who have unfair advantages in local markets,” recommended Ian Rae (@ianrae), CEO for CloudOps. “That can provide you with competitive advantages that you can't necessarily get from multi-national suppliers.”

Dirk Paessler (@paesslerAG), CEO of Paessler, recommends you “Think globally. Don’t focus too much on your own country or continent.”

Specifically, advised Paessler, look at big players that can operate globally.

“You might know a local vendor very well and he seems big and important as he’s from your neighborhood, but perhaps you’re one of a few knowing him at all and he’s not interesting for the rest of the world,” said Paessler.

17: Make the RFP process more than just undercutting each other

“Don’t make the RFP process all about price,” advised Ken Pedersen (@Geneca), COO of Geneca. “Avoid encouraging vendors to undercut one another until failure is virtually guaranteed. While price is always important, ‘cost,’ has many dimensions, such as time, quality, and opportunity cost.”

One way to do this said Pedersen is to ask for commitments: “Prioritize in favor of suppliers who back their claims with their own investment in your outcomes.”

Mike Vitale (@TalkPointDotCom), CTO of TalkPoint, suggests you get every department involved in the RFP process.

“Make sure every department in your company who’s going to interact with the vendors list out every requirement and expectation they have of the product or service,” said Vitale. “This process is healthy because it forces your team to think about what they need up front. The combined document also often uncovers discrepancies between internal departments.”

18: Manage vendors’ secure access

"Don’t give anyone the keys to the kingdom. The majority of vendors will only need access to a very small portion of the network so controlling and monitoring their access is vital to maintaining security,” said Boatner Blankenstein (@mtboat), Senior Director of Solutions Engineering for Bomgar. “The ability to track and record their activities will also ensure that any issues can be quickly sourced.”

“Record and monitor everything they do on your systems,” recommended Paul Brady (@ObserveIT), CEO of ObserveIT.  There is no question that these vendors need legitimate access to your systems and data, but the risk and liability of not knowing what they are actually doing once they are on your systems is an unacceptable business risk in today’s digital-first world. 

19: Appoint a lead vendor

“Unless you have lots of spare project management resource I recommend appointing a lead vendor to help you project manage the expansion and the other vendors,” said Chris Topham (@AbtecChris), Head of Marketing for Abtec Network Systems.

“You have to have extremely clear handoff points and accountability so that you're not left in a position of a problem crossing multiple vendors,” said Salim Ismail (@salimismail), Global Ambassador for Singularity University, and author of “Exponential Organizations.”

“Leverage international managed service providers to save you the hassle of VAT / customs / political issues when expanding internationally,” said Latisys’ Conway. “If you can avoid shipping gear and/or people internationally, you will create savings and simplicity for your company.”

20: Evaluate vendors as a pessimist and optimist

“We tend to discount the emotional side of technology evaluation and purchase, but it’s every bit as powerful. It’s impossible to be completely unbiased,” said Plexxi’s Bushong. “Consider structuring your evaluation around bears and bulls. For each solution (or each criterion), ask, ‘What would the bears say? What would the bulls say?’ By forcing you and your team to explicitly play both sides, you provide a more fertile ground for intelligent choice.”

Conclusion: You need help

When a business grows outside your nation’s barriers you magnify both complexity and your lack of visibility into the ever expanding issues you have to tackle. As evidenced by all the advice we received, a globally expanding business definitely won’t be situation normal. You’ll encounter problems you never thought of and won’t be able to physically touch. Our final piece of advice, which is a culmination of all the aforementioned advice, is to simply get help

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