Mark Fullman
Mark Fullman

Forming Strategic Partnerships With IT Vendors:

Beyond Tactical and Transactional Relationships
Building strong, mutually beneficial relationships with IT vendors can make a significant difference in an organization’s ability to deliver on end user expectations, reduce costs, and drive business goals. But effectively evaluating vendors and forming strategic partnerships with those that meet your company’s needs can be challenging. Many IT organizations only focus on short term tactical and transactional relationships and don’t benefit from the synergy of a long term relationship.

Why are vendor relationships important?

It is natural to question the value of building long term relationships with vendors. The process requires commitment from the organization, regular review, and a considerable amount of time. However, there are many benefits to investing time and resources in the effort. Better partnerships can greatly improve productivity, lead to reduced costs and risk, and improve end user experience.

Improved productivity – Developing, implementing and upgrading systems, applications, and services can be extremely time intensive. Working with companies that already know your organization’s infrastructure, systems, culture, and unique needs can speed project time, limit problems, and lead to a more satisfactory solution. You can also reduce the time needed to go through the competitive bidding process to get the project up and running faster.

Reduced risk and costs – Working with a trusted supplier can reduce risk and costs caused by stalled projects or other issues. Close partners are also more likely to work with you if you need financing or to work out more suitable payment plans.

Better end user experience – Trusted vendors often have a better idea of the unique needs and characteristics of your company. That means they can provide applications and services that work better for the end user or your customers.

Forming more beneficial relationships

Vendors are an integral part of your business’s strategic plan, allowing the IT organization to deliver effective services to employees and customers. But building mutually beneficial relationships with vendors takes time, personal connections, and effective review and analysis. Companies should treat the vendor vetting and relationship process with the same planning and care they would invest in any other critical business function.

Start with small transactions – It’s never wise to invest too heavily in an untested partner. That’s why any vendor relationship should ideally start with small projects. This gives you time to see how the vendor operates and decide whether to continue the relationship with more significant stakes.

Treat the vendor fairly – If you decide to invest time and effort into building a relationship with a vendor it is important to treat them fairly. A partnership is a two way street. You should always make an effort to always pay on time, provide ample lead time, and build personal connections with vendor representatives.

Be demanding – Although you should always treat your partners fairly and build personal connections, it is important to remember that the needs of your own company come first. Don’t be afraid to ask a lot from your vendor and drive a hard bargain when it comes to price and performance.

Regularly review performance – Be wary of partners who become too embedded in the organization resulting in poor performance to go unnoticed. It is important to guard against this by regularly reviewing vendors and addressing issues as they arise. If at any time a trusted vendor cannot deliver, don’t be afraid to request proposals from other sources.

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Mark Fullman

Mark brings more than 25 years of executive and consulting experience to Wavestone US, specializing in business transformation, IT, and outsourcing. He is frequently sought out to evaluate and advise on underperforming, merger, and business transformation risks.

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