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Single vendor vs. multi-vendor: 8 factors to consider

Posted by Henry Cheang | June 4, 2014 12:00 PM

Time to ponder: Single vendor? Or multi-vendor?

Over the past few months, we’ve published multiple posts on business process automation (BPA). I’m pretty sure that I’ve made the case for automating these processes cogent, and that you’re seriously looking up vendors by now. Which, of course, leads to one more challenge: How do you decide between engaging a single vendor or multiple vendors to automate all the myriad tasks that can benefit from technology adoption?

Well, it’d be best to compare the characteristics of the two scenarios, now wouldn’t it? In the spirit of helpfulness, here’s a point-by-point list of things to consider!

Single vendor vs. multi-vendor.

Factors to consider when deciding between 

single vendor vs. multi-vendor

1.Best-of-breed

The name is pretty explanatory, but just in case: A best-of-breed product is acknowledged (by the genuinely knowledgeable) as the best product of its type. Importantly, this more often than not refers to a specific module or product that focuses on one specific feature. The simple fact of the matter is, it’s hard to be the best at everything. An integrated solution might be fantastic overall, but not every component module is going to be best-of-breed. That’s why many businesses cobble together solutions that take individual components from separate vendors. With particular regard to vendor types:

  • Single vendor – it’s very unlikely to get best-of-breed functionality for every feature with a single vendor. With careful selection, you should be able to find a single vendor will likely be the best in one-to-several areas. Make sure you do your homework if you take this option!
  • Multi-vendor – this is basically the key advantage of choosing a multi-vendor solution.

2.Complexity

Here, I’m referring to the complexity inherent in integrating and implementing solutions for your business. Although there’s definitely a trend toward making everything compatible, there are still a great many legacy systems out there that weren’t built using common underlying software architectures or principles.

  • Single vendor – should have the advantage – the single vendor only has to worry about integrating its own product with your pre-existing systems. That can be challenging, but it’s at least a closed set of details to fuss over.
  • Multi-vendor – the onus here is on you to integrate everything. With multiple systems and a wide tranche of details, very few outside vendors will be able to integrate everything into a single cohesive whole – at least, not without great cost. And speaking of which…

3.Cost

There’s no getting around it – pricing is going to be different across the two categories.

  • Single vendor – typically, this will be lower in price, thanks to better volume discounts.
  • Multi-vendor – price will be higher because you’ll be forced to buy separate individual modules to constitute your solution.

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4.Implementation difficulty

This is reference to the challenges that you’ll likely encounter for installing and setting up whichever system you ultimately purchase.

  • Single vendor – it will be generally be less challenging to install single-vendor solutions because it’s only one set of programs/protocols to integrate into your existing systems.
  • Multi-vendor – multi-vendor solutions typically will require more effort to put into place because you’ll have to coordinate the integration of disparate (and potentially incompatible) systems.

5.Procurement effort

Systems don’t just purchase themselves, right? The question is, how hard will it be to get them? The answers are pretty straightforward, however!

  • Single vendor – (relatively) simple – you’re only dealing with one vendor, after all!
  • Multi-vendor – more effortful – you have a lot of different vendors with whom to negotiate contracts, and not every contract is going to run the same length and/or will be renewed at the same time, if at all!

6.Product upgrades

We live in an age of ultra-rapid product updates and upgrades. What can we expect from our vendor packages?

  • Single vendor – you’ll probably see major updates to single vendor solutions much more infrequently. The updates/upgrades will likely be much more comprehensive!
  • Multi-vendor – because you’re using and seeing smaller packages from each vendor, you should be getting upgrades more often. That could cause some problems with integration, however.

7.Staff training

The thing with software (and business IT in general, really), is that you do need training to take maximum advantage of your solution. That is true of most things, of course, but with technology, it seems especially true! The question here then, is just how much support you’re going to get in this domain (and how much you’re likely to get).

  • Single vendor – you and your staff will likely need less training overall, but you’ll likely get more training sessions from the vendor
  • Multi-vendor – you and your staff will likely need more training overall, but you’ll likely get less training since your purchase will represent a smaller order for the vendor.

8.Vendor survival

Well, this is pretty important. You want your vendor to supply you with product(s), upgrades, and service/support for years to come, right?

  • Single vendor – if it’s a big single vendor (especially if it’s an established one), it’ll likely stay in business for the long-haul.
  • Multi-vendor – here’s where things can get tricky. On the one hand, smaller companies might be best-in-breed in particular areas, but because of their size, they might not get volumes of business necessary to stay afloat. Alternately, they may just reach a level of success where the bigger players will buy them out. After which, there’s no guarantee that the product will stick around…

A handy-dandy summary chart!

For your convenience, here’s a neat little summarizing table:

FACTOR SINGLE VENDOR SOLUTION MULTIPLE VENDOR SOLUTION
Best-of-breed choices Impossible on a per-feature basis Possible
Complexity Vendor handles it Customer handles it - outside vendors may not know the intricacies of all systems
Cost Lower (because of volume discounts) Higher (because of separate smaller service packages purchased)
Implementation challenge Lower Higher
Procurement effort Lower Higher
Product upgrades Slower, but much more comprehensive upgrades Faster (at least, they should be) but less comprehensive
Staff training Gives more per vendor Gives less per vendor
Vendor survival A large vendor is more likely to survive Smaller vendors are constantly at-risk for shuttering or being bought out

 

 

 

 

 

 

 

 

 

 

 

 

 

Well, we hope that this was helpful! And if you need more information on business process automation and the benefits of adopting technology and telecom expense management, don’t hesitate to contact us. We’re Cimpl, Canada’s leader in technology expense management! Our signature product is an all-in-one software solution that lets you easily track, monitor, and control your IT, telecom, and technology assets. We’ll help you optimize your business processes!

 

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Topics: Telecom Expense Management, Business Automation, SaaS, tem, BPA, Software

Written by Henry Cheang

Henry has a lifelong passion for science and technology. This enthusiasm is put to good use in a cutting-edge software company like Cimpl. As product marketer, Henry researches market and user needs to develop user and buyer personas, contributes to product design, and helps coordinate product messaging. Henry also writes nearly the entirety of all documentation for Cimpl’s many successful platforms. In his spare time, Henry devotes much energy to family, friends, and martial arts. Henry recently completed his Master’s in Business and Administration from Concordia University, where he specialized in the study of marketing, organizational behavior, and corporate governance. He has authored academic papers on the latter two subjects; these papers form part of his bibliography of over 20 professional research publications.

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