Assessing IT vendor performance

IT and digital infrastructure is a major investment for any company to make. The Office for National Statistics (ONS) found that the average UK business spent £1,080 per employee on IT in 2022. It is a large investment but with potentially huge returns. That's why, whether you fully or partially outsource your IT, it's important to regularly review the performance of the projects to ensure the returns outweigh the costs.

Why It's Important to Assess Vendor Performance

Assessing your existing IT supplier is important for ensuring they meet your business needs and deliver on every contractual agreement. You should regularly check they are maintaining a high level of customer service and controlling costs effectively to help mitigate risks and get the most out of your technology investments.

There are many factors to consider when assessing the performance of your suppliers, improving your vendor-client relationship and ultimately contributing to the success of your business.

Here are some key points to consider when assessing your IT vendor:

Review/Establish KPIs

KPIs (key performance indicators) are important because they form the basis for how the supplier will help your organisation achieve its objectives. KPIs are also effective for comparing the value against the investment.

Defining KPIs based on your objectives is important for three reasons:

1. It keeps suppliers focused on the business areas that matter most to you.
2. The KPI reports provide you with simple and more focused reports.
3. It gives you the necessary information to assess their results and hold them to account.

Note: if you already have KPIs in place, review them. The needs or objectives of your business might have changed since the KPIs were last agreed upon, so all your investments should reflect this.

Contractual Obligations

As with KPIs, ensure the vendor meets all contractual obligations and SLAs (service level agreements). The service you pay for is based on what they promised to deliver. Therefore, any discrepancies between what they’ve contractually agreed to deliver and what they are delivering should be promptly addressed.

Note: Contractual agreements differ slightly from KPIs. An SLA is a commitment from the vendor to what they are promising to achieve, whereas as the word ‘indicator’ suggests, a KPI is used to measure how on track the supplier is with reaching the targets.

Costs VS Results

KPIs, as mentioned above, go a long way in telling you the value your vendor gives back to you in exchange for what you are paying them.

Return on investment (ROI) is an important metric with all business spending. Comparing your IT spending with the value you receive in return is paramount, as it enables you to make data-driven decisions, optimise resource allocation, and ensure that your technology investments contribute positively to your organisation's bottom line.

Note: Some results are not quantifiably measurable. Consistency of quality, input in projects and boosted morale and knowledge among staff is immeasurable but each has a huge, positive impact on your organisation.

Innovative Solutions

Assess whether your supplier is bringing innovative and modern ideas to the table. They should proactively develop and improve your company’s IT infrastructure, presenting you with solutions rather than problems.

Another positive impact of this is increased scalability. Their innovative solutions will future-proof your company’s digital infrastructure and allow you to integrate new technologies as and when they advance.

Staff Feedback

When it comes to non-quantifiable results such as those mentioned above, a good way to ascertain those vendor qualities is through speaking to those who deal with them regularly. They are the ones who frequently engage with them and should give you their honest opinion about your vendor's reliability, input in meetings, professionalism, technical knowledge and the quality of the work they produce.

"I wanted to feedback, not just how competent he is, but his all-round attitude. He is one of the staff where, if you are working on a project, you will be wanting to ringfence him to be a part of it. I will add that it is not just myself, I have had similar discussions with several other managers at the company." Client review about one of our Business Analysts, Justin (2022).

Security and Compliance

How does your IT supplier handle your sensitive data? Are you confident they take the necessary steps to secure theirs and your business's? As a standard, they should at least be Cyber Essentials certified; this proves they have the correct measures for keeping your data safe.

Note: If your company was hit by a data breach that affected your customers, even though the fault may lie with your IT provider, the blame in the eyes of your customers will all fall on you. Cybersecurity is not to be ignored.

Customer Support

What's their track record in quickly responding to your queries? Do they reliably get it right the first time?

Customer support should be a key consideration with any provider. Their ability to respond to your queries swiftly and accurately, providing reliable and effective support, is not only a crucial factor when evaluating an IT vendor but also an essential aspect of the overall customer experience.

Note: A quick or automated response doesn't always reflect how good their customer support is. One metric that is deemed more important is the quality of their first response and how long it takes to resolve an issue.

Cost and Budget Management

It’s a necessity that a digital provider stays within budget, however a great vendor will take a strategic approach to controlling costs and optimising your budgets. This means they’ll be proactive in identifying ways you can achieve more from your IT without spending more.

Communication

How regular is communication between your business and the vendor? There may be daily interactions on a technical level between your teams and the vendor, but frequent communications on a commercial level are just as important.

This allows you to analyse all the factors mentioned above and hold your supplier to account. It also allows your teams to escalate important issues that may not be addressed on a lower level.

Note: your IT supplier should be transparent and honest when asked about any aspect of their service. Any reluctance to answer a specific question could be a sign they are trying to withhold information and be a potential red flag.

In Summary...

Assessing the factors above is a great starting point for determining whether your current IT vendor is the right fit and achieving the right outcomes for your business.

Comparing your IT suppliers against the criteria above will give you a balanced view of how your vendor is performing, along with any changes to the service which might need to be made.

The criteria mentioned above are all things we pride ourselves on when working with our clients. our portfolio of work from the past 15 years shows our commitment to quality and dedication to delivering cost-effective solutions with first-class quality outputs.