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

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“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


Copyright © 2014 IDG Communications, Inc.

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