As digital acceleration continues unabated, enterprise-level IT departments face a complex logistical challenge. As a result, they must find ways to manage their multiple digital and technology partners efficiently in a way that still delivers a cutting edge customer-first solution. The answer lies in applying a Multi-Vendor Environment model and appointing Managed Service Providers to run it.
Organisations across the globe have added various new technologies to their IT infrastructure in the past decade to meet their customers’ needs more efficiently. By pivoting towards micro-services, API and cloud-based infrastructures, companies have embraced innovation, allowing them to improve the way they serve their customers. However, this explosion in new technologies means firms now have more vendors than ever on their roster. A 2020 consumer study by the Ponemon Institute revealed that the average enterprise-level organisation has around 5,800 third party vendors – this number is expected to grow by 15% by the end of this year.
What are the implications of this expanded vendor base in terms of impact on resources, and what are the most viable solutions available, now and in the future?
The unexpected challenges of embracing innovation
While many organisations have successfully increased their investment in standardising and optimising their IT and digital estate, there is room for improvement when it comes to maximising their return on investment. This is because most businesses typically spend too much time on multi-vendor management.
A recent survey of global IT leaders by the MACH Alliance found that IT teams are spending 39% of their time delivering upgrades, with 28% saying more than half of their IT team time is dedicated to this – including managing the partners supporting this work. That represents a considerable portion of time (and budget) that could be focused on innovation and delivering crucial customer experience improvements. Not surprisingly, the same MACH Alliance survey found that this leads to strong resistance to change among IT/implementation teams.
As a result, it’s increasingly clear that organisations with complex IT infrastructures have to find new ways of ensuring in-house teams and their various partners work together towards a common goal. Seamlessly integrating multiple solution partners is critical. In turn, this translates into effective time management for IT teams, better customer experiences and ultimately, higher revenues. The challenge is that the multiple partners these organisations rely on are often unaware of the interdependencies at play.
Consequently, IT teams have to allocate additional time and resources explaining to each vendor why their company is not just another client – and why they need more bespoke solutions than the other businesses in their industry. After all, having third-party partners who are misaligned increases the chances of mistakes and can create obstacles to improving the customer experience.
Working with companies across various sectors, I have learned that there are common recurring problems that many clients experience when managing a complex IT landscape with numerous multi-vendor moving parts. These include:
- High costs
- Staffing challenges
- Lack of visibility into the interdependencies between partners
- The increased amount of time that IT spends with partners to maintain the status quo
- Inefficient performance measurement and optimisation
- A lack of understanding of responsibilities between partners
- Vendors and partners being reactive rather than proactive
Inevitably, these issues contribute to inefficient or less-than-optimal service performance.
Why A Multi-Vendor Environment is worth considering
A Multi-Vendor Environment is a fluid model that allows organisations to manage multiple partners to facilitate collaboration and coordination between them, ultimately freeing up valuable time and resources within in-house IT teams. It’s a hybrid approach that uses technology to help enterprises improve how they integrate their partners and suppliers, saving time and effort in solving recurrent issues.
Leading consultancy Gartner estimates that organising Multi-Vendors effectively can lead to a 40% savings in management costs. So it’s surprising that more businesses aren’t taking advantage of a Multi-Vendor Environment to optimise their relationship with their providers and make life more manageable for their IT teams. What’s more, with most enterprise solutions moving toward a cloud-first approach, automation needs to be at the core of Managed Services, and an Multi-Vendor model enables organisations to develop a more automated environment. It facilitates a 360 view of the IT activities making it easier to optimize and automate tasks. By implementing a global service platform such as JSM from Atlassian, organisations can benefit from greater visibility and accelerate the flow of work between vendors.
Another core benefit of a Multi-Vendor Environment is its customer-first delivery model. While a customer-first approach sounds obvious, in practice it requires companies to anticipate their customers’ needs and expectations and go above and beyond to deliver a more meaningful experience at every touchpoint. A customer-first delivery model helps to promote more engaged and personalised customer relationships in the long run, which in turn helps drive revenues.
That said, the ultimate goal of implementing a Multi-Vendor-based ecosystem is to provide time-pressured in-house IT teams with the room they need to focus on driving innovation and digital transformation instead of troubleshooting and supporting day-to-day tasks. However, the success of this approach also depends on bringing all the vendors together under one roof with a single point of contact (POC). This is where the role of Managed Service Providers is key. By serving as a single POC, Managed Service Providers help facilitate communication and monitor vendor performance.
So what can companies expect from Managed Service Providers? As a baseline, Managed Service Providers should deliver a wide set of services, including 24/7 maintenance and support, continuous development, performance audit, analysis, remediation and real-time monitoring. The aim is to help clients improve their understanding of their ecosystems, suppliers and partners. Meanwhile, by optimising companies’ use of data, Managed Service Providers help companies make decisions that add value and deliver more substantial return on investment.
Managed Service Providers aren’t limited to operational issues: they can also help facilitate procurement efforts, orchestrate complex product upgrades and minimise staff training and churn, stretching client budgets to do more.
By taking over the primary responsibilities surrounding performance optimisation, Managed Service Providers can help companies refocus their IT team’s efforts where it matters most; on driving innovation.