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Three Key Considerations When Transitioning Technology Vendors

Thursday 03 of September, 2020.
Reading Time: 3 minutes.
By Erick Vargas



A good vendor partner is critical to the success of every company. They allow your company to focus on what is important for business and for your customers while providing additional resources to drive growth and achieve new goals that would take longer with existing capabilities. 

In technology, especially in the software industry, there are three areas where vendors can provide great value for companies: 

  • Reducing time to market: scaling the current capacity to collaborate directly with your company’s team or providing a self-managed team to create new products or services. 
  • Business operations: technology ecosystem management and improvement. 
  • Providing specialized knowledge: helps the organization implement a new business strategy or brings a new product or service to life. 

Effectively managing a successful relationship with vendors can be a challenge, especially when there is more than one vendor involved or the vendor management practice is not mature. If not managed appropriately, there will be a point in time where the value provided by an existing vendor will no longer be optimal. Missing deadlines, faulty production rollouts, not being able to provide a new capability, or the inability to scale the team to accommodate a short-term goal or deadline, are all reasons that can undermine a good relationship with an existing vendor. Of course, the decision to switch vendors doesn’t have to be due to poor performance. 

Having offshore vendors means people will have to deal with time-zone differences and language barriers. Costs can be a good reason for outsourcing, but in the long term, it will start to affect the team. 

If a company is considering switching vendors, there are three key elements to consider.

Risk 

The sole act of making a vendor transition introduces a huge risk to the operation. Having a team hand off their work to a completely new team requires a good understanding of the business operations and decisions that have been made throughout the duration of the relationship, and most of the time, this is not well documented. At this juncture, a robust knowledge transfer process becomes critical for the transition process to be successful. 

Scalability 

The new partner must not only be able to provide an improved level of service and added value over the current vendor but also guarantee that they can scale as needed and can provide additional resources or expertise to help the business grow. 

Vendor Operational Cost 

It is important to understand that when speaking of costs, it is not always a direct relationship to how much the new vendor team will charge. Cost analysis should also weigh how much the current vendor is increasing operational costs. When evaluating vendors, costs must also take into consideration the value the organization will receive from the new partner. This will help clearly determine how much value the company can expect from the price of a new vendor and will enable them to make an educated decision. 

We make it easy for you!

It doesn’t matter if you’re shifting to a completely new vendor, setting up a new management scheme, or just want to consolidate your vendor operation, Avantica has the curated industry know-how and expertise to make sure it all goes smoothly for your company. We make a change in vendors an easy and painless experience. So if you want to find out what you’re missing with your current development partner, contact us today and we’ll be happy to set you up on a new vendor path.

 

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KEY TAKEAWAYS

  1. A good vendor provides a company with additional resources that drive growth or helps it achieve goals it would not have been accessible with its existing capabilities.
  2. There are three areas where vendors can provide great value for companies: reducing time to market, improving business operations, and providing specialized knowledge.
  3. When shifting vendors, it is crucial to consider the following aspects: risks, scalability, and vendor operational costs.

 

About Avantica

If you are looking for a software partner who will work towards your business goals and success, then Avantica is your solution. We offer dedicated teams, team augmentation, and individual projects to our clients. We are constantly looking for the best methodologies in order to give you the best results.

Learn More!

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