When it comes to technology solutions and integration for a small business, outside vendors (both large and small) contribute to the pieces that must work together. For example, almost every small business needs a computer. Do you choose Dell, Apple or Microsoft? How about an Internet Service Provider? Is cable or fiber the best choice? What bandwidth speed is sufficient? Does the business need both a landline and cell phones or just one? If a landline, VOIP or POTS? Either way, which service is best for the business? What about contracts, commitments, service reliability and the ability to terminate? Small business owners are busy running their business, staying competitive and thriving in the most challenging times. In today’s environment, this is tougher than ever. The effort needed to stay on top of IT vendors and manage them is significant and often confusing.
Many business owners believe vendor management is simply finding the supplier with the cheapest price for a product or service, but there’s a lot more to it, especially when it comes to technology.
How do small businesses ensure they partner with the best providers? How can they make certain service is not only reliable, but cost efficient? What about customer service? While it’s important to acknowledge each business has its own unique requirements and preferences, it’s also important to note the differences in big business and small business needs. Small businesses often need slightly different things than their more sizable counterparts and proper oversight becomes even more important. A comprehensive Managed IT Service Provider includes IT vendor management in their repertoire of services. This means researching and sourcing vendors, obtaining quotes with pricing, checking references, capabilities, turnaround times, and quality of work, negotiating contracts, managing relationships, assigning jobs, evaluating performance, and checking invoices for proper billing. IT vendor management needs many skills, resources, and time.
IT vendor management is typically broken down into four major categories:
What kind of value can a small business expect from an IT Service Provider who understands and includes IT Vendor Management in their service? Roark Tech Services takes vendor management seriously because we believe it is crucial to the success of any small business. Outlined here are the specific reasons why we believe IT vendor management is so important for every small business.
1. Mitigate Vendor Risks
To effectively reduce vendor risks, whether related to operations, unforeseen price increases, or regulatory compliance, a business needs increased visibility. IT Vendor Management tracks vendor performance, changes and costs to find risks, allowing a business to take the necessary steps to mitigate them, prepare or them or perhaps choose an alternative vendor in an organized fashion. It is also important to understand the cybersecurity safeguards of an IT vendor to properly determine the risk to a small businesses. This not only protects a small business, but their clients as well. Staying on top of vendor performance and habits requires time, focus and insight.
2. Reduce Costs & Save Money When a business has increased visibility, invisible costs suddenly appear, allowing better control of expenses. Additionally, keeping strong relationships with IT vendors helps to negotiate better rates, including access to discounts and incentives that can increase profit margin. When a small business can choose different vendors, the ability to negotiate the best deal appears. An IT Service Provider compares apples-to-apples to ensure the business gets the best value from all vendors. When the value is no longer present, the IT vendor will recommend a move, knowing the intricate details of what is provided.
3. Optimize Performance
When the IT Service Provider tracks and measures a vendor’s performance against the contract terms to make sure what was promised is delivered, a small business gains the insight needed to make necessary adjustments that help optimize performance. For example, an examination of the telephone bill finds a monthly charge for faxing capability, but the business hasn’t sent a fax in twenty years. This signals an opportunity to reduce costs and change settings to match the business operations today. The data captured from tracking performance signals challenges before they become problems, which leads to improvements.
4. Create Relationships Really good vendors are hard to come by. When a small business is working with an excellent IT vendor or vendors, it’s wise to strengthen the relationships with them and build loyalty, which is in the businesses’ best interest. With effective IT Vendor Management, a small business can ensure efficiencies that lead to smooth processes, communication and advice that help ultimately help a small business stay competitive and save money.
5. Increase Administrative Efficiencies A formal IT Vendor Management program significantly drives administrative efficiencies. With a central location for master IT vendor data and record keeping, a structured program cuts down on data duplication, loss of contracts and other information, administrative costs, and errors. Having one place centrally managed for all of IT vendor data helps a small business run with heightened efficiency.
6. Increase Onboarding Speed The time and resources needed to onboard new vendors can slow down a business’s productivity and cost money. With IT Vendor Management, it’s easier to obtain all relevant vendor information, such as bank details, capability information, regulatory data, capacity details and reconcile it in a fast and error-free way for analysis and approval. The quicker a business can onboard a vendor, the quicker the business can move through the procurement process and receive goods or services that are then used.
7. Preserve Brand Equity
A company’s brand holds a lot of value. Any tarnish to it due to the actions of an unprofessional or unethical vendor can prove devastating for a small business. An IT Vendor Management program provides a business with the information needed, such as a vendor’s social and environmental standards, to reduce risk of a serious incident stemming from a vendor’s actions.