Question

Many organizations use information technology vendors to develop company solutions. Determine at least three (3) challenges associated with using vendors. Analyze the relationship between competitive advantage and vendor relationship management overall.

Specify at least three (3) approaches for marketing IT’s value. Propose (1) method for implementing each approach within an organization. Provide one (1) example of each approach to support your answer.

Answer 1

1. There are many challenges that an organization might face when using external vendors for developing company’s IT solution:

1. Firstly, management of complex vendor ecosystems is a huge challenge. Using external vendors of development of digital business initiatives bring in innovative solutions, with the risk of potential performance issues and security risks. There is a tradeoff that the company has to look for between strategic value the vendor’s system will add and the security risk associated with information and sharing.
2. Scalability and customizations are required in the IT solutions of a company with every small change in processes and systems. Using an external vendor makes this difficult, especially after their contract with the company expires. Also, every change in the features of the system is generally billable, which in long term might end up costing heavily to the company.
3. The external vendors rely solely on the company’s communication regarding the system’s requirements, development, design, QA testing, and training. The vendor doesn’t have any user community to provide self-help. Hence, a direct relationship with the vendor is extremely necessary with open and clear communication lines, to ensure the company gets what it needed in the start.