Tech Journal IT Vendor Consolidation: Essential for Today’s Businesses
By Insight Editor / 17 Jun 2020 / Topics: Procurement Software
By Insight Editor / 17 Jun 2020 / Topics: Procurement Software
With many businesses juggling upwards of a dozen IT vendors, it’s no wonder employees don’t have time to focus on digital transformation initiatives. It’s time for companies to consider consolidation.
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A strategic approach to procurement and vendor management isn’t only possible — it’s a necessity in today’s business landscape.
In the simplest terms, it’s reducing the number of vendors you procure products and services from. But really, IT vendor consolidation is a strategic business decision that can position the enterprise for growth. It ensures businesses have selected the right partners for the future.
Today, large enterprises have sophisticated, sprawling IT ecosystems. Though necessary to achieve digital transformation, these environments often include a large vendor portfolio that only gets bigger as new IT initiatives are undertaken. Suddenly, you’ve got something that’s expensive to maintain and inefficient to operate. 47% of enterprises are managing more than 10 vendor relationships.
The benefits of vendor consolidation are twofold: It optimizes daily operations and primes the business for growth. Fewer vendors means fewer moving parts in the supply chain and an easier time gaining a holistic view of the environment, compliance and vendor performance. It also creates more robust relationships with those vendors, making them more strategic.
By 2023, 40% of midsize enterprises will have a center of excellence for IT procurement and vendor management.
The right vendor is one with expertise and capabilities that span the entire IT ecosystem. When evaluating vendors, decision-makers should ask themselves:
It’s unrealistic to expect businesses to consolidate down to a single vendor, simply because there’s no one partner that could do it all. But the benefits of IT vendor consolidation are too great for enterprises to ignore.
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