The ‘Big 3’ for IT Vendor Selection

August 20, 2015
Michael DeVito

Any company that’s ever dealt with outsourcing a service or entering a relationship with an outside company likely has some type of formal vendor selection process.

Some organizations are more formal about vendor selection than others. (Governments know this well.) More formal vendor selection processes often inherently do a great job of filtering out “bad” vendors. Pre-evaluating potential partners, however, only serves to increase the likelihood of a long-term, successful business relationship.

Because our business is built on relationships and connections, at Telx, we have experience on both sides of the vendor process. Not only have we formed countless relationships with other companies that help us; we’ve also served as a vendor for data center colocation, cloud, interconnection, and BC/DR services for thousands of other companies.

These many years of relationships have given us a good bit of insight about the vendor selection process, and what it takes to build good relationships. In our experience, pre-evaluating these three factors can save lots of headaches down the road:

Factor Number 1: Capabilities

The first, and likely most important, factor in selecting an IT vendor is capabilities. The general question surrounding capabilities is simple: “Does this vendor have the capabilities to support my business’ needs, or not?”

This starts with having a clear understanding of your needs. Say you’re looking for a data center colocation provider. You might ask some of the following questions:

  • How many square feet of data center space do we need?
  • What are our storage requirements?
  • Do we need a provider that can scale up relatively quickly, or are we okay with fixed capacity?
  • Do we expect our needs to grow or shrink in the future?
  • Do we have any unique compliance needs that may affect our selection process?
  • Do we have the capabilities to manage these IT services in-house, or do we also need a vendor who can help with management?
  • What amount of downtime is acceptable to us, if any?
  • What sort of connections do we need within our data center?

Certainly, your business can—and should—go into more depth with your list of needs. The more specific you can be, the better, as this will enable you to better evaluate what you need versus what the vendor offers.

Once you know exactly what you need, you can evaluate the vendor’s capabilities accordingly. Do they meet or exceed all of your requirements? Do they have a knowledgeable staff that will help your business succeed, or are they “set it and forget it”? More generally, do they have what it will take to execute your project on time?

Not all IT vendors are created equal. While some companies might be fine selecting a vendor that meets the bare minimum of what they need, most businesses could benefit from a vendor that goes above and beyond. Consider your business’ needs now and in the future, when the landscape may look very different than it looks today.

Choosing an IT vendor that goes above and beyond and has a wide range of capabilities can “future-proof” your relationship. The right choice will ensure that you’re not left scrambling when your needs change or you decide to take your business in another direction.

Factor Number 2: Relationships

Capabilities are extremely important; if a vendor can’t meet your bare-minimum needs, they shouldn’t even be part of the selection process. But if picking a vendor with a wide range of capabilities is the first step to ensuring a fruitful relationship, selecting a partner that values and possesses outside business relationships is the next piece of the puzzle.

Now, you can ask yourself the following questions:

  • Does the vendor have relationships with outside businesses that could help our company grow?
  • Does the vendor facilitate relationships with those businesses, or does it keep them “under wraps”?
  • Could our company help these outside businesses in any way?
  • Will these outside relationships develop new pathways for our company that wouldn’t exist otherwise?
  • How does the vendor treat its existing relationships?

Outside relationships are not make-or-break, but they are a value-add for most businesses because they expose companies to partnerships that can help them grow. The more diverse the vendor’s ecosystem is, the better. In some cases, you may end up buying services from companies within the vendor’s ecosystem; in others, you may very well sell your services to another company you have access to because of the relationships your vendor has built.

Quality relationships facilitate business growth and open up new worlds of opportunity.

At Telx, we place a lot of value on our relationships with clients and partners. Our MarketplacePORTAL was designed (and recently updated) from the ground up with facilitating relationships in mind. All Telx customers have access to a rich suite of companies that offer everything from private cloud solutions to market research services.

A vendor that has a stable of connected clients can turn a good business relationship into a great one.

Factor Number 3: Trust

The final factor of the ‘big 3’ for IT vendor selection is one that isn’t always top-of-mind in the selection process, but should be: trust.

We don’t mean to suggest that you should throw away your formal vendor selection process and just “go with your gut.” Doing so could lead you to throw away potential partnerships that could prove to be valuable in the long run. At the same time, you shouldn’t be afraid of reevaluating if something seems off:

  • What have other partners of the vendor said about their experience?
  • Does the vendor offer guarantees (like a 100% uptime and 100% on-time SLA) to ensure that things will go as planned, or if not, are they willing to write provisions into the contract to ensure success?
  • Above all, do you trust the vendor to do what’s right and contribute to the success of your business?

Personal relationships are founded on trust. Business relationships should be, too. Capabilities and outside business relationships aside, if you don’t trust your vendor, you’re setting your partnership up for failure.

Conclusion:

No matter what your vendor selection process looks like, evaluating these factors before or alongside your typical process can help weed out bad partners and bring up good ones.

A good vendor can save you lots of money over the course of your contract, or even help you increase revenue; the wrong partner can cost you money and time. If you know what you’re looking for when outsourcing a business need, you can find the right partner to help your business grow and ensure a sustainable, long-lasting relationship.

Capabilities, relationships, and trust aren’t all that make up a positive vendor relationship, but they’re certainly a great place to start.

Interested in learning more about partnering with Telx, or have another question about our capabilities? Don’t hesitate to reach out to us via the contact page of our site, or by Facebook or Twitter. We’d love to speak with you and answer any questions you may have.

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