How many IT vendors does your company work with? How many suppliers does your company supply chain rely on? Many companies realize that they don’t really know the answer to that question. Fortunately, a growing number of enterprises are starting to see that reducing the number of vendors can make their lives a whole lot easier, at the same time reducing cost and improving services.
According to a recent article in Forbes, large companies have thousands of different companies they work with in some part of their operations. Having so many suppliers can become quite a headache: how can you keep track of all these companies and how can you ensure none of these companies pose a risk to your daily activities? There is sometimes a good reason to engage with many vendors, especially if you pursue a ‘best-of-breed’ strategy. IT departments too, have long worked with the conception that is it best to bring in different vendors for each aspect of the IT landscape.
As technology is evolving ever faster, the IT department cannot keep up with all new and emerging technologies, while maintaining its know-how on the entire installed stack of hard- and software. Whether they want it or not, they need to bring in external knowledge if they want to keep up with the evolving technology landscape. A good strategy, but having to manage tens or hundreds of different vendors leads to a new sort of complexity.
Over the past few years, we have seen an evolution in this. CIOs and IT directors are now realizing that working with a limited number of vendors can be much more cost-effective than engaging and negotiating with multiple partners. Connected to this, CIOs are also open receptive to longer term contracts. This is reflected, for instance, in the contract that we concluded with Elia last year: an initial contract for five years, with the option to extend the partnership by another five years. And other contracts too typically go beyond the traditional 3-year time frame.
Renegotiating a marriage contract every 3 years?
There are a number of good reasons for this kind of long-term relationship. Being able to work in the long term with the same people provides continuity and takes away a lot of tension. Let’s face it: haggling over contracts only creates tension in an otherwise great relationship. Just imagine renegotiating your marriage contract every three years. And it’s also a reality that constantly working on RFPs is not only time- and resource-consuming for the supplier, it’s also a financial burden on the side of the buyer. Thirdly, working for the long term is beneficial to the working relationship. People get to know each other better and really see each other as colleagues, regardless of the company payroll they are on.
Simac also likes to work as a one-stop-shop for its customers, and its focus on the datacenter exemplifies that. Each of our four business units adds value to the life cycle of a datacenter: Cabling & Infrastructure builds the infrastructure in the datacenter, while Integration provides Cloud, server, storage and networking capacity. Our Business Management Services manages and optimizes the applications while the Professional Services division staffs the datacenter. Being able to rely on a single partner clearly gives our customers an edge.
From our end too, we try to reduce complexity by reducing the number of vendors we strategically align with. Simac always opts for A-brands in selecting its vendors and partners with just enough vendors to specialize thoroughly while still offering our customers enough choice. Keeping a tight focus like this also allows us to keep up with all emerging technologies in the domains we cover. Customers can rest assured that we are in the know of the latest evolutions of emerging technologies such as the Internet of Things and Blockchain or solutions like Datacenter Infrastructure Management (DCIM) and Artificial Intelligence for Operations (AIOps).
It is often thought that suppliers and customers have conflicting interests. I believe that is not the case. Working towards a common goal – delivering the best IT-solutions to business users – creates the most fertile soil for a long-term relationship. A true partnership avoids ‘us vs them’ thinking. That’s what we, at Simac, like to call ‘Teamnology’.