The other day I stopped at a well known North American Donuts Shop on the way in to work.
We were celebrating the soon-to-be birth of a new baby at our IF Family.
Every now and then, we get together as a Team to thank and honor a Team Member — babies, birthdays, service awards. A great way to chat, catch up with each other as people, discuss our business goals. A mini-State of The Union, if you will.
Typical multi-vendor pain points are the ability to service customers efficiently and effectively.
“The more vendors that are in the kitchen, the harder it is to cook a meal.”
The preference is to work with companies that have a consistent service delivery model and the same predictable quality of service.
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. Not to mention the complication of multiple vendor touching key components of Customer Service, particularly if there is possible risk of litigation involved.
1. Go for quality, not quantity with your vendor
The old procurement-driven advice on managing vendors was to have a huge portfolio of potential vendors, and put every procurement out to competitive bid, playing vendors against each other and applying pressure until you got the absolute lowest cost. While this can be effective in the near term, there are two risks. The first is rather obvious: if you always seek the lowest cost, you’ll always get the minimum acceptable output. This may be fine for commodities like connectivity services, hardware, and some IT services, but puts more complex endeavors at risk.
For an analogy to our personal lives, finding the cheapest gasoline is fine (as long as you don’t spend an hour driving to save a few pennies), but you probably don’t want the cheapest brain surgeon poking around between your ears.