Vendor Partnering

Let's face it, one company can simply not do everything on their own. The myriad of technologies used by firms in the form of applications such as accounting software, human resource and payroll software, even forum software, is often best left to professionals specialized in their respective field. Take for example a company like Sasktel. They built a partnership with a vendor that provides a Java-based interface for serving their television programming instead of building and maintaining the software and hardware in-house. This provides several benefits to manufacturing hardware components themselves, and/or creating and maintaining application interfaces to speak with these terminals. 

First, vendor partnering helps Sasktel allocate more of their resources toward customer service, marketing, and sales,  and spend less on IT-related costs that would be associated with building and maintaining software and hardware components. Second, vendors of specialized products and services tend to have more experience in their area of expertise, thus lending to more advanced applications than could be built in-house. Third, specialization also lends to reduced costs due to economies of scale; companies that control a significant portion of the marketplace are able to adjust their pricing according to account size. They would undoubtedly be able to provide more value from the product or service than most companies could provide by producing and maintaining these products in-house. Finally, quality vendor relationships can lead to further business opportunities that become present through good business relationships and networking. Having vendors provide insight into marketplace tendencies and new trends can also help organizations be more adaptive to an ever-changing marketplace. 

Although vendor partnering has several advantages, it is not without its faults. For instance, partnering with vendors relinquishes a significant amount of control over knowledge related to the products and services (McKeen, J. D., & Smith, H. A., 2012). When an organization is making a decision on which vendor they are going to partner with, it is paramount to be wary and conduct thorough research into the potential applciants. Typically, when choosing a vendor you would be interested in finding one that is matched with the maturity and size of your organization. It would not be wise as a small organization that requires a strong relationship with a vendor to partner with a company that would not be considered a priority. Some vendors are very mature and have extremely large accounts that will take precedence over your small organization. If extensive communication and ongoing support is required with the vendor, perhaps it would be more prudent to choose a newer company that is ready to allocate more time and resources to maintaining their account with your organization.  

Chapter fourteen in The Adventures of an IT Leader (2009) provides an excellent example of the thought process that a CIO encounters while choosing which vendor to choose. In the process of arriving at a decision of how decrepit back-office systems were going to be replaced, the boardroom grew heated. Barton handled the situation rather credibly, I would say. They went through an extensive elimination process of potential candidates, including but not limited to attending presentations from the vendor's representatives. In short, the chapter went to illustrate that you may not always be granted with the most effective or total solution, and may have to settle for the most suitable to the organization and the culture given the available options. It goes to show that while making the decision, although Barton is the CIO and the final decision is ultimately his, his primary concern is that the decision was not just a band-aid or temporary solution but provided real business value and longevity for the IR team.

Even while taking all of the right precautions, accounting for as many possible variables as the team can think of, and seemingly covering all facets of the decision-making process does not guarantee success in the outcome. But, you must agree that it will certainly improve the chances of arriving to a solution that is mutually beneficial for both the vendor and organization as well as those affected by the changes. You will never make everyone happy, period, but in the end, the solution should provide a tested, proven, and predictable outcome to help limit the risk involved in large decisions.

Austin, R. D., Nolan, R. L., & O'Donnell, S. (2009). The adventures of an IT leader. Boston, MA: Harvard Business Press.

McKeen, J. D., & Smith, H. A. (2012). IT strategy: Issues and practices. Boston: Prentice Hall.