Throw a dog a bone: The value of multi-vendor strategies

Every year, households across Australia look at their power, insurance, internet, and other bills, and start to wonder “Could I get a better deal?”. Yet very few actually do anything about it.  Changing vendors is hard and often made purposely harder by the vendors themselves. Time spent researching offerings, on call center hold queues, waiting for technicians, dealing with teething problems, all add up quickly to offset any benefits, perceived or otherwise, of moving vendors in the first place.  Businesses are even worse when it comes to a change! multi year contracts, other priorities, and organisational complexities in a generally risk adverse environment, in all likelihood, probably leave your existing vendors feeling pretty good about their relationship with you.

In many cases, engaging in a vendor selection process is only marginally better than accepting cold calls. No matter how good your process is, you really only barely get to know them and how they operate based on a few brief glimpses under “Sunny Day” conditions. On the flip side, there’s only so many times you can kick the tires before any prospective vendor loses interest. Sure that might be a reflection on how much they want your businesses, but it’s also commercial reality; financial transactions is what makes businesses work. No moola? No Motive…

Ultimately, the only real way to gauge what someone will be like to do business with is to do business with them. How? You could start by throwing that dog a bone once in a while. Having a carefully managed, multi vendor strategy in your procurement plan can create a number of value opportunities for your business:

  • It creates ongoing competitive tension: Maybe you really value your current vendor, but how much do they value you? Are you getting be best price and service you can from them or are they treating you like money for jam. Creating that slight air of tension in your suppliers and vendors, can help ensure you’re always getting a good deal.
  • It allows you to see how other vendors operate: All the KPI’s, SLA’s and Benchmarks in the world are no substitute for a straight out comparison. There may be a better way to operate you’re not considering or you may just realise the service you’re getting isn’t that bad after all!
  • It builds stronger long term commercial relationships: Being more than just a sales opportunity will allow you to build relationships with other parts of your prospective vendors. A changing of the guards moment with your sales team is less likely to leave you out in the cold.
  • It reduces business risk: Have a problem with your primary vendor? Gone bankrupt or have a disaster at a critical time? Or maybe they just can’t meet your needs for a particular project? Having another partner, ready to go, might just save your skin.
  • It can help you innovate: They say two heads are better than one. No one has all the answers, ideas or solutions at their disposal. Having multiple, trusted partners and solution  providers actively engaged with your business, can help to ensure that you do.

How you build and manage those vendors into your business is up to you. It could be as simple as utilising specific vendors for departmental solutions and another set for the enterprise; Sourcing a premium product for your high end users and another for the general masses. Ultimately, it all comes down to what will make commercial sense while still opening the door for your now excited, alternate vendor.

So don’t be just another boy out there crying wolf, continually kicking the tires of each new prospective partner that comes along.  Have a plan, look at your possible vendors, and throw that dog a bone once in a while.  It’ll keep the rest of the pack honest and it could just be that dog that comes to your aid when you truly need it.