If budgets have been slashed, projects pushed off and employee headcount reduced, vendor relationship management may be the last area to cut expenses. Info-Tech and Dimension Data discuss best practices

Enterprises consolidating their IT contracts to save money may be surprised to discover they’re paying to maintain equipment that’s no longer in use, experts told a Webinar hosted by IT World Canada on Wednesday.

Along with reorganizing project portfolios, cutting discretionary spending and laying off staff, contract consolidation may represent the only “high gain, no pain” option for companies dealing with the economic downturn, said Andy Woyzbun, lead analyst with London, Ont.-based Info-Tech Research Group. That doesn’t mean, however, organizations should think of better vendor management as an immediate cure-all for their financial woes.

“The savings are not instant,” Woyzbun warned. “Negotiating new agreements takes time – it’s probably slower than any of the other three approaches.”

On the other hand, contract consolidation may not come with the negative side-effects of cutting staff or pulling back on training activities, Woyzbun said. Quality of service tends to go up once a single service provider has been selected, because vendors care more about clients where the relationship is of a certain size.

“Organizations can also leverage the deep relationships by value of being a good reference account, or by the process engineering improvements they pass on to the vendor through the course of the contract,” he added.

Darryl Wilson, area practice manager for Dimension Data Canada, said contract consolidation can free up time for the people who are currently dedicated to managing myriad vendor relationships with multiple suppliers. It can also help close gaps in their support coverage, he said.

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