Single vs Multiple Vendors: Asking the
Right Questions

Single vs Multiple Vendors: Asking the Right Questions

In today’s demanding business landscape, SMBs are constantly on the lookout for ways to differentiate and get ahead of the competition, including investing in technology to help them increase employee productivity and sharpen their competitiveness.1 Now more than ever, the spotlight is on an SMB’s technology investment decisions and how they align with business priorities and become an integral part of the business plan.2

In the midst of all the deliberations and questions, one on-going debate always surfaces in the IT spending decision-making process: should your company choose a single vendor or work with multiple vendors?

It is easy to say that there is no right or wrong approach.3 And that it depends on your company’s strategy and busines prioirites, as well as budget considerations and the relationship and trust that you may have already built with your existing vendor.

While that may be true, there are also clear pros and cons that may support a single- or a multiple-vendor approach. These advantages and disadvantages deserve another look, especially when one considers that worldwide IT spending will hit a total of $3.5 trillion in 2017,4 with total IT spending by SMBs expected to hit $568 billion in 2017.5

Single Vendor Approach

Pros

  1. Higher upfront costs are negated over time by better clarity on future services and support
  2. One single trusted advisor 
  3. Easier to build trust and relationship with one vendor 
  4. One contract, one invoice, one support centre number, one account team; less coordination and paperwork
  5. “One bloke to choke” – single accountability of issues and problems; no finger-pointing

Cons

  1. May be best-in-breed for some solutions, but will not have the best solutions for every single component and solution
  2. Vendor lock-in: You are stuck with one single vendor
  3. End-of-life (EOL) and End-of-Service (EOS) issues – your vendor decides, not you
  4. Isolated from the competitive environment, and what’s available in the IT market that may suit your needs better
  5. Product innovation happens at vendor’s pace – you have no say

Multiple-vendor approach

Pros

  1. Lower total cost of ownership (TCO) as you can better negotiate pricing with a few smaller vendors
  2. You can shop for the best-of-breed solution for each component
  3. More technology choices
  4. Lower risk of vendor lock-in
  5. You keep each vendor on its toes, and you get leverage as each vendor knows that it is not your sole supplier

Cons

  1. TCO may be higher if you are unable to harness price leveraging to arrive at a cheaper solution made up of components supplied by different vendors
  2. Lower upfront costs may be negated by hardware/software conflict and incompatibility issues arising from potentially different vendors using different operating systems
  3. Passing the buck – when something goes wrong, no single vendor will own the problem and there can be much finger-pointing
  4. Time, effort and resources are needed to build relationships and manage multiple vendors – different invoices, different sets of paperwork, different support service staff and different call center numbers
  5. Smaller vendors may carry higher risks of running out of business. When that happens, your IT infrastructure may be compromised

At the end of the day, there is no “one-size-fits-all” solution and no magic bullet. To summarise…

You may wish to consider a multiple-vendor platform if:

  • Your IT team has diverse expertise and experience in managing different vendors, and are able to gauge value vis a vis pricing.
  • Your IT team is relatively flexible and open to learning new technologies that come from having to work with different vendors, and willing to attending regular training.

You may prefer a single vendor if:

  • Managing multiple vendors becomes a complex affair, especially when it comes to uptime and availability.
  • Your IT staff have invested time and effort in learning a certain product range and need the familiarity to work on a stable and reliable operating environment with one vendor.
  • “If it ain’t broken, don’t fix it. If you have an excellent working relationship with a single vendor who looks after your IT needs well, why bother?
  • You do not need every component in your IT system to be best-of-breed and a functional, reliable and predictable system is enough for your company.
Single vs Multiple

Some experts argue for a single-vendor approach, for the reliable and smooth operating environment it provides6 and because there is value in streamlining your operations with a complete solution on a single platform.7

Likewise, there are instances when a multiple-vendor strategy has worked well.8

For companies, and especially SMBs, budget plays a huge part in the decision-making process. Unless you have a full IT team with the diverse expertise and experience needed to manage a multiple-vendor relationship, it may be best to work on building a one-vendor relationship.

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