In the right circumstances, tech companies grow like weeds. But no matter how scalable the services they sell are, their supplier relationships still require corresponding increases in attention.
Think about it: Behind every sales tool and CRM software your company uses is a supplier. Each desk, table, and chair your team sits at was sold by another vendor. Even your morning coffee represents a supplier relationship.
Major companies might not have a problem managing thousands of vendors. But if you’ve got a small team, as is typical in the tech sector, your “critical mass” might be a dozen or so suppliers.
Although saving money is important, GPO UNA says procurement objectives like reducing time spent might matter even more.
To achieve them, start by consolidating your vendor list. Here’s how:
1. Focus on your goals.
You might not see the connection at first, but deciding which vendors should make your new, trimmed-down list should start with your company’s mission statement. Think of your mission as your framework for decision-making. Even small choices, like who hosts your data, should connect to your mission: Do you emphasize users’ privacy? Do you promise 99% uptime?
If there’s no clear winner, dig into your long-term goals: Why are you making the purchase at all? Sure, if you’re buying new ergonomic chairs for the whole office, the goal is to make your employees more comfortable. Your deeper goal, however, might be to boost workers’ productivity or loyalty to your company.
With your underlying goal in mind, don’t just pick a vendor with desks you like. Choose one that understands your long-term strategy of investing in employees’ well-being. When it’s time to buy from that vendor again, the vendor will be ready with recommendations that save time while furthering your mission.
2. Consult the actual users.
One area where companies’ vendors can quickly get out of hand is marketing technology. With more than 7,000 martech tools on the market, companies are buying in without realizing that their current stack covers some or all of the “needed” functionality.
When you’re whittling down software services, in particular, you can’t make an informed decision with only VPs in the room. Approach the people on your team who actually use the tools, and ask them to help you choose. Give them a list beforehand of the tools you’re considering cutting. Request that they explain how they use each and, using a one-to-10 scale, how much they need the individual platforms.
Again, price shouldn’t be your only — or even primary — consideration. Rank tools that accomplish the same thing by how effectively they do so. Eliminate the ones with no distinct purpose, but don’t be afraid to pay more for those that increase your efficiency. Remember, too, that strong customer service is worth paying a premium for, and certain vendors may be better positioned than current choices to meet your future needs.
3. Conduct relationship analyses.
Even in the age of self-service, there’s no substitute for a great account manager. Although points of contact can change, an uninformed or unhelpful supplier contact can add hours per month to the procurement process. Across a dozen or more vendors, that might equate to a full-time employee’s workload.
If you don’t already have it, invest in supplier management software. Conga Contracts is a great choice for companies that have client-specific contracts, such as B2B services. Whichever you choose, your new system should be your single source of truth: when each relationship began, how it’s evolved, what challenges have come up, and how those challenges were resolved.
Before making any decisions about which suppliers to cut and which to keep, update your database. Rope in any past procurement helpers you might have had to ensure you see the full picture. Then, pull up similar suppliers’ pages side by side: Is one clearly more prone to misunderstandings? Does another switch points of contact constantly? Assuming the quality of supplies or services is the same, choose the vendor that creates the fewest headaches.
A lean supplier list makes sense for the same reasons a lean team does: Working with just a handful of vendors means fewer relationships to manage, orders to track, and people to pay. With a smaller list of suppliers, you might be surprised at just how much more you can get done.