Erik Eckel says limiting the list of vendors his IT consultancy uses has improved his profitability and his life. Here are the three simple ways that he was able to streamline vendor relationships.
Vendors can make or break an IT consultancy. I know because I've been running my own IT consulting business for more than three years. That's sufficient time in the trenches to see just how unfriendly and dysfunctional many vendors' sales channels are. Despite years of troubleshooting issues from three, four, or even five clients a day, I'm still surprised at the rigid requirements and processes some vendors continue imposing on consultants.
It's illogical. Consultants are often the best representatives of a vendor's products. It's the consultant that meets in person with business owners, project managers, and IT managers. It's the consultant, ultimately, who must close the deal. And it's the consultant that most business owners turn to for advice, recommendations, and solutions implementation. Yet, many vendors (whether hardware or software manufacturers) make it difficult for IT consultants to resell their products.
Approximately 16 months ago, I resolved to streamline vendor relationships. Recognizing the need to quickly and easily prepare estimates, customize and order equipment, and simplify paperwork, I narrowed the list of the vendors my office uses. In a few cases, I terminated reseller relationships. Life and profitability improved.
If you're interested in introducing similar improvements within your IT consulting organization, consider the following three tips. While I had to fight the universal temptation to just muddle through and accept the status quo, by taking the initiative with these three simple and straightforward fundamentals, I was able to streamline my shop's daily operations.
Seek vendors whose processes and pricing meet your needs
Some vendors required that I stock large amounts of their inventory. Others were willing to provide me with a secure Web portal I could log in to and employ to purchase products at a discount and on a just-in-time basis whenever I needed.
With the two competitors' products otherwise proving equal, it's a no brainer as to which vendor makes the cut moving forward; reward those vendors that provide your organization with the pricing and processes it needs.
Occasionally a client will request I install software or hardware from one of the companies that extended, in my mind, unreasonable terms to my consultancy. In those cases, I tell clients the truth. I explain that I attempted to establish reseller relationships with those manufacturers, but the costs were unfavorable. So, in an effort to provide cost-effective solutions to my clients, I've established relationships with other manufacturers whose products I've found just as effective and reliable as the competitors' products. In three years, I've only had one client request that I purchase outside my existing reseller agreements.
Request better terms
When a vendor's terms or processes don't meet your needs, give them a call. It seems so simple, yet many consultants I talk to (and I'm regularly in touch with a handful of consultants locally as well as hundreds distributed throughout the United States and several countries internationally) haven't bothered to call vendors and request better terms. In the last eight months, my consultancy is two-for-two in such efforts.
I've had a few occasions where initial discussions proved disappointing. In a couple cases, my consulting company and a vendor just couldn't agree on discounts, inventory requirements, or minimum sales levels, but we stayed in touch. By keeping sales representatives apprised of my consultancy's needs and successes, I've been able to negotiate more attractive reseller agreements that otherwise might never have come together.
Quit working with troublesome vendors
Sometimes a vendor simply won't negotiate. Occasionally vendors will refuse to lower barriers to meet your needs (this is especially true with smaller IT consultancies). In most cases, unless it's a Microsoft, Apple, or similar vendor with whom you simply don't have any other option, you have a choice. Do business with someone else.
At first, the prospect sounds alarming. Clients seemingly dictate the vendors with which you must work, but that hasn't proven true in my experience.
When my clients need new desktop PCs or servers, I almost invariably recommend one well-known brand for several reasons. The brand's PCs perform as well as any other with which I've worked (comparatively reasonable mean times to failure and repair, for example). The manufacturer has also implemented a special portal from which I can download product information, brochures, and other sales materials.
I have a smaller, lesser known second vendor in place to enable my office to provide clients with an alternative if necessary. But, I eliminated a third and fourth vendor due to their imposing discount, rebate, or other process roadblocks that I simply didn't have the patience or time to navigate. After all, time spent managing vendor paperwork is less time spent billing.
In a nutshell
It's tough having to battle vendor issues while simultaneously troubleshooting technology failures or architecting complex solutions for new clients. That's why I recommend IT consultants streamline vendor relationships whenever possible. Remember, a consultant is often a vendor's best representative on the street. If you take the time to work with software and hardware manufacturers and their representatives, you'll likely find an enterprising partner willing to be flexible. You just have to make the effort. When you do, everyone wins.Get weekly consulting tips in your inbox TechRepublic's IT Consultant newsletter, delivered each Monday, offers tips on how to attract customers, build your business, and increase your technical skills in order to get the job done. Automatically sign up today!