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4 Ways to Find the Right Third Party Vendor

Vendor relations have become increasingly important to corporate IT.

Businessman New Idea Launch Balloon Off the GroundMany of the world’s IT functions are having to adapt the way they go about sourcing third party vendors to help them get their work done.
This is not only because of an increase in specialized (and competitively priced) niche and startup vendors but also because, as the pace of IT innovation moves ever faster and, as employees become ever more tech-savvy, it’s increasingly only vendors who can provide what the business needs to maintain any kind of competitive advantage.

Four Lessons for Third Party Vendor Management

From discussions with many senior IT managers in CEB’s networks, there are four lessons that will help IT teams evaluate vendors and find the best way to support emerging business needs.

  1. Look for process: To support business needs that will require experimentation, make sure vendors are willing to adapt how its teams do their work to align with your own situation.

    Importantly, this does not mean that a vendor should not have its own process. Many CIOs have told us that they often look to vendors because these organizations can deliver solutions more quickly than IT can. Part of this benefit comes from the vendors’ own ability to manage projects and workflows in a way that can support their unique talents and skills.

    Before signing on to use a vendor, ask them how they would like to structure the process of working with your teams. If their response is close to, “We can just use your process,” then you might want to look elsewhere for a vendor that will complement, not copy, your process.

  2. Look for problem solving skills: Make sure that vendors can are positioned with the right expertise and creativity to solve your company’s problems.

    One IT leader told us that he gauges vendors’ problem solving skills by the types of questions they ask. Part of this evaluation for vendors consists of outlining a business problem, and then asking the vendors what questions they have about the problem.

    By the end of the exercise, evaluators get a sense of how well each vendor understands the issue — showing whether they’d be able to solve it — and how well they can attack a problem using their own expertise, experience, and creativity.

  3. Look for an ability to work with business partners: Vendors working on new and innovative projects may be called on to work with a variety of different customers. Make sure vendors can communicate effectively in “business language.”

    One IT leader told us that she seeks out vendors that can communicate a vision in business terms. This CIO has even invited a vendor to speak to her CEO and executive peers, noting that “They could explain their vision for the partnership even better than I could.”

    Before signing on to work with a vendor, ask them how they would present a proposal to your partners around the executive table. A vendor that can effectively communicate to business partners will save you time and money down the line by removing the need to have a business-facing role act as an intermediary for them.

  4. Look for a vendor that wants to grow and develop: Look for vendors that will help their own teams grow and develop.

    One IT leader told us that the idea of being a good coach for vendors is only half of the story, and that he also looks for vendors that have skills and abilities that his own team doesn’t. In this way, this CIO tries to pair his teams with organizations that will help them develop as more fully rounded IT talent.

    When thinking about using a creative, talented vendor, include a list of things that you would like your own teams to learn from the partnership. A vendor that can support these development objectives may be a great fit not only for one relationship, but for helping you meet staff and leadership development goals as well.

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