Vendor Management: The MSP’s Two-Front Battle

MSPs fight a “two-front battle” every day of their existence – that battle is vendor management.

Even someone with no military experience can understand the difficulty of fighting on two fronts rather than one. The typical MSP manages about 20 vendors for internal purposes, covering the business tools and technology they resell. On the flip side, MSPs must work with countless CRMs, accounting systems, ISPs and more at their customer locations.

There are many best practices to help MSPs succeed in the crowded arena of vendor management, both when working with internal and external vendors. Employing these best practices can help your MSP thrive in a competitive terrain – and come out victorious.

Managing Internal Vendors

According to a survey by AMI-Partners, MSPs use between 11 – 15 technology partners to deliver their services. As managed security service continues to grow, the number of vendors an MSP needs to manage is also growing. Industry consolidation is helping to keep that number steady – but regardless, there are a lot of different companies and relationships to manage.

When evaluating internal vendors like PSA, RMM, AV and more, there are three categories MSPs should examine:

1. Day-to-day workflow with existing vendors
2. Scaling with existing vendors
3. Vetting new technology

Day-to-Day Workflow with Existing Vendors

Vendor contact is often necessary in your everyday workflow. Whether it’s via chat, ticket, email, or phone, someone at your company must take action – which means less time spent clearing tickets.

It’s worth noting some vendors do offer more support than others – and that should be considered when evaluating the overall value proposition of the vendor. There’s more to a relationship than cost alone.

Scaling With Existing Vendors

One thing to consider from a long-term perspective is how your pricing will scale as you grow with a given vendor. Usually, the more business you do with a vendor the better price you will get. But how much business can you do with a vendor? Will you ever be eligible for top-tier pricing?

One benefit of an outsourced company like Collabrance is vendor management. Outsourcing companies save you time by dealing with vendors directly. Today, Collabrance partners with over 50 different technology partners. In turn, Collabrance receives top-tier pricing because we aggregate the purchasing power of all our partners.

Vetting New Technology

As the landscape of technology changes, so do the tools MSPs use. Many MSPs have a full-time head count dedicated to vetting new technology. The technology may be unfamiliar to the MSP or is replacing the current technology with a new vendor. When vetting tech, there are a few key questions to ask:

• Does it work the way it's supposed to?
• Does it work with your other existing technology?
• Is the price fair for what you get in return?
• What is the support like?
• What is the company's track record and reputation?
• What is the financial health of the vendor?
• Is the ownership structure private equity? Boot-strapped? Public?

Working with External Vendors

Every day an MSP’s service desk team is trying to fix problems. Often, the solution is at the fingertips of your technician. Other times, the solution lies outside your control. So, what do you do when the problem is with the external vendor? Do you try to fix it? Do you pass off the issue by saying, “it’s not my problem?”

Control What You Can Control

One best practice we use at Collabrance is, “control what you can control.” As our team members go through the process to determine where a problem resides, sometimes they find it’s with another vendor. During customer onboarding, we diligently collect all of a MSP's various vendor information in our notes. We can then connect with the appropriate vendor and communicate what steps have already been taken to isolate the problem. We stay on the call until we’re no longer bringing value to the customer and vendor.

This approach helps resolve the issue quickly, keeps the customer from having to answer the same question multiple times, and results in higher customer satisfaction scores. Many of our service providers report that when an issue is found to exist with an external vendor, other outsourced help desk services create a ticket and pass it off to the service provider instead of working to help solve the issue for the customer. If you strive to be best-in-class in vendor management, you’ll wow your customers by how far your team goes above and beyond.

Vertical Markets Add Value

Many MSPs who focus on a specific vertical bring extra value to their customers by being subject matter experts on a particular line of business software. Having additional knowledge of specific forms of software in your arsenal sets you apart as an industry knowledge leader. Vendor management is just one reason why focusing on a vertical market is good for your MSP.

Conclusion

Winning the vendor management battle comes down to understanding what’s facing you on both sides of the battlefield – with your own vendors, and those of your end-customers. When you address each side head-on, put your troops to the ground, and go forth with the goal of exceeding customer expectations, you’ll be flying the victory flag in no time.