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How to Choose a Third-Party Vendor?

How to Choose a Third-Party Vendor?

Despite the turbulence in the tech industry, organizations are still actively seeking to expand their tech stacks and elevate their investments. According to the 2023 State of IT Report by SWZD, IT budgets are projected to surge this year with an impressive 13% year-over-year increase. As IT spending grows, however, your organization must exercise caution and make informed decisions when choosing third-party vendors. Is a new tool going to cause headaches or help achieve new levels of growth?

To help facilitate those choices, I’ve outlined three critical questions to ask during the vetting process.

Is the vendor solution able to integrate?

You want new tools to make your days, and jobs, easier.

When weighing the pros and cons of onboarding a potential third-party vendor, you must determine whether the technology will work within your established tech ecosystem.

New tools seamlessly integrating into your already-existing environment minimizes disruptions, facilitate adoption, and ensure smooth data flow between disparate systems in your tech stack.

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Integration streamlines information sharing reduces data silos, and improves interdepartmental data accessibility, enabling data-informed decision-making across your organization.

Because of these myriad benefits inherent in an integrated tech stack, the popularity of integrated networks is skyrocketing.

By 2030, the integrated network economy is expected to comprise 25% of the total economy, equating to a total global revenue of $70 trillion.

Will the vendor solution replace some tools you already have?

If you suspect some of your tech tools have redundant capabilities, it’s time to audit your stack.

And, look across disciplines to bring teams together.

Are your marketing and sales teams engaging the same funnel but on two different platforms?

Rather than relying on multiple-point solutions, invest in higher-value software able to solve multiple problems — and sunset anything extraneous. Organizations prioritizing tech stack consolidation can expect simplified workflows, improved team alignment, higher operational efficiency, and lower costs.

A consolidated tech stack also fosters innovation — fewer siloed systems mean your organization can more easily explore and adopt cutting-edge technologies to complement the existing stack.

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Consolidation also enables business flexibility and agility during periods of change.

Whether your organization is scaling or downsizing, modifying a unified system is much more manageable than trying to wrangle several disparate ones.

Are you ready for the vendor solution?

An important aspect of partnering with a new third-party vendor is identifying which process your organization has — or needs — to handle a new tool, especially a more advanced platform designed to merge with and build off already-existing systems. If you don’t have the necessary internal processes established, implementing a new tool can lead to confusion and more work for everyone involved. For example, if your organization doesn’t have Google Analytics set up yet for basic analysis, it would be a mistake to try to implement a call-tracking tool for advanced analysis. 

And, a bonus question you should always ask is, can we afford it? 

Even if it replaces a few existing tools, do the savings offset the start-up costs or is the ROI negligible?

When possible, bring in tools that add value rather than simply add more expenses to the balance sheet.

Carefully consider all risks, financial or otherwise, before implementing a new tool. 

Vendor selection may feel like a daunting task, but asking (and answering) these three questions will help simplify the process of finding the appropriate vendor tool for your organization. A well-thought-out vendor acquisition strategy can ensure new tools provide the ROI needed to justify the investment.

Read More: Magewell Releases Control Hub Device and Stream Management Software

[To share your insights with us, please write to sghosh@martechseries.com]

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