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First of all, you may ask “What is an IT Vendor Strategy?” There’s no secret to it, only hard work and if I may attempt an over simplistic definition, I could say that an IT Vendor Strategy, is the road map that an IT organization need to follow, in order to arrive to the desired target of growth, in support of Business needs, ensuring the right technology as enabler.

Why build Vendor Strategies? Because IT Vendors are critical factors in any strategy, as companies not only that they need modern and reliable technology to function, but how the technology is used, can make the difference for Business success on the market. IT Strategy creation, is where Technical teams and Commercial teams come together, as all aspects need to be considered to map these fast changing technologies with the company’s targets, always having the Business in mind, and how would these roadmaps help the business generate value and growth.

Steps for building a successful IT Vendor Strategy

How to build IT Vendor Strategies?

After performing the IT Vendor Segmentation, and you already know which are the IT Strategic Partners and IT Strategic Vendors, the strategies are built around them. We are talking about Top IT Vendors, such as your OS, ERP, Hyperscalers, CRM, Network, Colocation or Workplace type of Strategic Vendors.

Examples of Vendor Strategies key content: In most cases the strategies will include the AI impact, the transition to cloud, growth in certain products, optimizations or even re-platform and transition to other solutions, timed with Contract anniversaries or renewal Terms. All this, also depending on your company IT maturity level and from where you can start to build up you Strategy.

Other important aspects, besides technology, are the company’s direction in terms of consolidation vs deconsolidation, mergers & acquisitions, divestments, how the business is using technology embedded in their product or not, etc.

So many factors to consider, but let’s take it step by step:

1. Past: A proper Due Diligence exercise is very important, in order to review and understand all data available from the past, such as: RFP history, Contract history, volume trends, technology changes and demand, issues or positives.
2. Present: Then “status quo” situation, by checking the current architecture design, current contracts and services or products in use which are are critical, because they might trigger dependencies or hinder any change in strategy. So always highlight any current commitments into the business case when creating a solid strategy.
3. Future: Data and knowledge are key to success. And armed will all this data from past and present, and in collaboration with all our Stakeholders input and Business future demands, you can build the future Strategies for each IT Partner and Vendor. IT Vendors input is very useful at this stage, to have information about their product roadmaps and plan in advance for any changes. With your most close IT Partners you can co-create and they might co-invest in the right solution and partnership for both partners. So please keep this in mind!

Collaboration is key!

Communication, transparency and collaboration are all key success. And this can be done via the Vendor Governance Process (about which I will write in my next blog post, so stay tuned).

As established earlier, stakeholder feedback is critical, and here are some examples:

• “Is the current Architecture Design still valid and aligned to the Business needs?” ;
• “Do we need to adjust product portfolio due to vendor upgrades or launch of new products?” ;
• “Is there any Financial risk that we should consider?”;
• “Contract commitments or term impact?” etc

Although is the IT Vendor Management who is in the heart of your IT organization and they will be the ones drafting the IT Vendor Strategies, remember that it requires a team effort and hard work, in order to arrive at the best results, so cross function IT communication and collaboration are key for your success.

And after many pairs of eyes looked at the Strategies, these can be taken for approval to CIO and CFO level and in addition to Steerco’s, as applicable in each Organization.

Are you building your IT Vendor Strategy? What are your key topics to consider? Thank you for reading my blog post and I hope it helped you. Let me know your thoughts.