Outsourcing IT needs is a popular operational strategy in most industries. It can be used to reduce costs, gain access to new resources, manage risks, and much more. For a growing business, IT outsourcing may even be a necessity. However, it’s difficult to find a single IT provider that can deliver all the solutions your business needs.
To solve this problem, most organizations tend to rely on multiple third-party services. While this method does allow you to meet all of your demands, juggling all those vendors at the same time can be difficult. Additionally, the more partners you work with, the more vulnerabilities you open your business up to. Fortunately, the challenges of vendor management can be avoided with the help of a managed service provider (MSP).
What Is IT Vendor Management?
The term “vendor management” describes the processes a business uses to manage their suppliers. This can include negotiating contracts, selecting vendors, managing costs, and more. The point of this practice is to strengthen the service you receive and improve your professional relationships with these suppliers. However, combining this with the various other tasks that come with running your company can leave your resources spread thin.
Your IT providers are critical to the success of your company. If you want to maintain a healthy partnership with your suppliers without putting a strain on your organization, it will benefit you to outsource your vendor management strategy.
How Does Outsourcing Help?
As your operations become more complex, it’s likely that you’re going to need to bring on more businesses to fill in on anything your team can’t handle. Once you have more than a couple vendors in your stable, it’s easy to overlook inefficiencies and what you’re being charged for. This lack of clarity can quickly result in your organization overpaying for services or receiving services you don’t even need. You probably don’t want to see your revenue go to waste, do you?
When you outsource your IT vendor management, you get a team of industry professionals who act as your single point of contact for all of your management needs. They understand what your infrastructure requires and make sure your suppliers deliver what was specified in their contracts. Finally, your MSP can work to optimize your partnerships by reducing costs, maximizing performance, mitigating risks, and renegotiating contracts that fit your operations.
The Management Process
Outsourced management involves these five steps:
- Strategy Development: Once you outsource with an MSP, they can help you create a strategy that pairs well with your organization’s needs. It is aimed at identifying your budget, determining user requirements, and sorting out other possible considerations. Creating a plan can help save you time, energy, and frustration.
- Selection Criteria: You don’t want to choose just any vendor—it needs to be a company that can provide services that match your operational demands. Your management provider works with you to outline what you’re looking for in a vendor.
- Evaluation: Using an unbiased eye, your vendor management partner reviews all the selected vendors to find the best ones for your business goals.
- Contract Negotiation: After the providers have been selected, your outsourced solution works to create a contract both your business and the vendor can agree on.
- Relationship Management: Keeping your suppliers engaged is the final step in the process. An engaged vendor is more likely to feel like they are your partner than simply a third-party company you occasionally communicate with.
Benefits of Vendor Management
- Performance Optimization: Your MSP can track and measure the performance of your vendors and compare the results to the contract they agreed on.
- Reduced Costs: It’s not uncommon to find hidden fees in your billing. An MSP can sort through your bills and assess if you’re paying for services you don’t need or are overpaying for certain services.
- Stronger Relationships: An effective management program can help you build stronger relationships with vendors. This can lead to opportunities down the road to negotiate better rates.
Make Managing Your Vendors Simple
The 42, Inc. team is dedicated to helping our clients achieve better results that improve their operations. As your vendor management solution, we’ll make sure you have access to the service you need from all of your suppliers. With us by your side, you can focus on the more important aspects of your business.
Contact us today to learn more about how we can help you with vendor management.