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How to Pick a Vendor for the Best Return on Investment (ROI)

How to Pick a Vendor for the Best Return on Investment (ROI)

Understanding Vendors vs. Solutions Partners

At a recent trade show (SHAREPOINT FEST DC, Washington Convention Center, April 27 - 29) we had the opportunity to speak with a number of business prospects who visited our booth.  We spoke to many, many people holding all manner of occupations at various organizations:  Developers, Web Administrators, IT Directors/Managers, and even a smattering of C-class executives.  The latter included CIOs, CTOs, COOs and a CFO or two.  Their respective organizations included private-sector businesses, non-profit associations, and government agencies.

All visitors had a common concern that extended beyond making the most of their SharePoint environments and allied uses:  How do we select a vendor that will provide the best returns-on-investments (ROI)?  After all, who isn’t concerned with costs – whether it’s progression of your Windows environment, managing a household, or making the most of various “value meals” at a fast food drive-thru?  (I don’t know about you, but exercising the latter is a challenge to me).

In the realm of technical support to business, many folks over time become suspicious about costs and returns at their respective organizations, whether it’s customization of core business systems, the delivery of training, upgrade and maintenance of infrastructure, management of Cloud services (PaaS, SaaS, etc.), and so forth.  Or, upon entry to a new position, a prudent person makes evaluation of “inherited” vendors, which requires a common-sense vendor review – whether formal or informal:  Are we getting “the best bang for our buck” with the present vendor-bouquet?

When meeting with any particular vendor (and assuming they’re delivering products, services, and value to a reasonable degree in the case of an existing one - after all, if there are dire problems you’re going to be mounting a transition anyway) and particularly when considering a new one, examine the following conditions in helping to employ true Solutions Partners:

-Bill Rates:  How do their rates stack up in your market?  Don’t be afraid to shop around – and, just because you discover a much better rate elsewhere, it doesn’t mean you have to go through a huge effort of transition to a new vendor.  Often, you can leverage your knowledge of rates to negotiate a better one by your present vendor.

-Project Management:  How are your vendors on projects?  Do they meet projected timelines, delivery dates, and “Go-Live”s?  Well-managed projects should have a natural economy of hours.  We want compact project timelines – as much as possible (with all due incorporations of safety and security).  The aforementioned bill rates don’t mean much when projects meander to conclusion, or suffer repeated delays and adjustments to timelines:  A vendor can have a rate of $10/hr. in a market that bears $150/hr., but if the project takes a million hours, the rate doesn’t mean… anything.

-Developers/Programmers:  Some vendors these days have Developers who have Project Management Professional status – they’re PMP Certified, or have a PMP degree.  This makes all involved Developers particularly attuned to best progressions, mindful of impacts to the timeline, and able to mesh in better fashion to fellow Developers, IT management, and business personnel involved in the project.  As importantly, many astute vendors are letting the Lead Developer on a project handle Project Manager duties; this dual role means that the vendor does not have to layer the bill with a separate PM and the associated cost.

-Listen for any prospective vendor to talk beyond “ROI” - Time-to-Value (TTV) is exceedingly important (the aforementioned compact project timelines, but also their timely capture of new enablements in the market, their leveraging to your environment, and match to business).  Returns are significantly diminished absent effective TTV.

-Examine your Total-Cost-of-Overhead (TCO), both for the IT department, and the overall weave of business and IT (for example, as regards business; are users making effective use of systems?)  We want vendors who can help us to arrive at, and maintain, a very shrewd TCO – which again feeds into best ROI.  This triumvirate, ROI, TTV, and TCO should remain a dominant element in discussions and practices involving any of your vendors.

-Seek and qualify vendors based on the anticipated longevity of their products, services, and deliveries for the market.  The most basic concern:  Will they be in business in five years?  Two?  Indicators are staff turnover, management turnover, and of course – basic quality.  Assess products for anticipated longevity.  Are products regularly updated/upgraded?  Do they integrate effectively (and efficiently) with third-party business systems? 

-Evaluate responsiveness:  Do your vendors respond to you according to your standards?  Are responses not only timely, but does a callback/visit contain meaningful information?  If you have a breakage, outage, emergent business requirement, do you get meaningful replies and timely fixes, schedules for discussion, the scoping and mounting of new projects, etc.?

The folks at SHAREPOINT FEST DC also responded well to this idea:  Talented solutions partners see things from the customer side of the table.  They have a knack for making IT look good in the business eyes of each respective organization they serve.

Be certain that you’re employing those vendors who are true solutions partners; those that truly have your best interests at heart, who work to retain your confidence, who see things from your side of the table, and who labor accordingly in making yours the best TTV, TCO, and ROI to be had.

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