Vendor Portfolio Analysis
July 6, 2015
I spent a great deal of my career managing a lot of different providers under my purview. This can be a difficult chore as everyone wants to get in there to try to sell you some product, subscription, or service. However, if you take the time to do a true Vendor Portfolio Analysis, you can allow you and your teams to focus on competitive differentiation and get away from the noise. Here are a few things you need to think through as you evaluate these providers:
1. Strategic or Tactical – Do they provide solutions that are key to your Core or IT Business that help with differentiation?
2. Discretionary vs Non-Discretionary – Do they provide solutions to you that are required by the business or are by choice? I.e. – Security/Compliance vs. User Productivity
3. Enterprise or Business Vertical – Do they affect the entire company or are they focused on a sliver of that business?
4. Financials – Are they large spend or small? This is relative to #3 as well as also in terms of ration to overall spend
5. Qualitative – Are they good at what they do? Do you like them and doing business with them? Do they have great people?
There are plenty of other angles you can and should take in your analysis, but ultimately, you want to get the quantitative and qualitative sides to this analysis. The bottom line is that you want to make sure that you are getting value out of your vendors that suits your particular needs and culture.
I like to think of these things in the simplest terms. I get my haircut from roughly five different places, depending upon convenience. Ask anyone that knows me and they will tell you there is no surprise there. I have exceptionally boring hair, I don’t see anything special about how any of them cut it, but I need to get a haircut every couple of weeks. My wife, very much on other hand, goes to the same place all the time. In fact, it is the same person all the time. She spends a significant amount more money on it than I do, but she also gets a lot more done. She gets much more value out of it and has enough trust in her person that she is willing to spend more. The bottom line here – we both get the value we need and we pay differently for it. No two companies are the same in what they need or in what they offer.
Vendor Portfolio Analysis is about finding that unique balance that works for you and for the partner. It can never be a one-way street, as partnerships that only benefit one party are never sustainable. Both sides needs to feel they are getting the right value from each other and have the trust to drive that over the long term.
If you want to try to understand that better, give us a call and we will spend some time with you seeing where you are on the maturity cycle.