Choosing Tech Suppliers: Balancing Consultancy and Firm Roles
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Overview
When managing digital transformation, using different suppliers for the consultancy, build and delivery of your software is often a choice made on autopilot.
Tech consultancies generally focus on providing expert advice and strategic planning, while tech firms are more involved in the actual development, implementation and management of technology products and services.
Although they both have their own advantages and specialisms, using them together doesn’t always result in harmony. It might seem like the obvious decision if you want to leverage specialist expertise and competitive pricing – but there are complexities in this approach, too.
Relying on multiple suppliers can lead to unexpected costs and snags which threaten to derail your project. So, let’s dig a little deeper and see if it’s really the right choice for you, your project, and your business…
Understanding the Risks of Multiple Suppliers
Integration Challenges
The use of different suppliers can lead to a lack of synergy in approaches, tools, and technologies. This fragmentation often results in incompatible systems and data inconsistencies, directly impacting the operational efficiency of your new software.
It’s vital to remember that changes in technology and processes can create skills gaps within teams, too – and you’ll need to identify this rapidly, so your project rollout doesn’t waver from a lack of suitable resource. Using a separate talent consultancy could mean a delayed response to hiring needs, affecting project timelines and effectiveness.
Coordination Complexities
Managing multiple suppliers requires a high level of coordination, demanding meticulous management of project timelines, communication, and collaboration. The job of organising these activities is likely to fall to your in-house teams, adding more pressure to their role and taking them away from the urgent, day-to-day requirements of your business operations.
The complexity of this project management often results in delays and misalignments, particularly in terms of integrating new team members in sync with transformation plans. A misstep here can lead to significant bottlenecks in progression, damaging the success of your project’s delivery.
Inconsistent Quality
Different suppliers may have a mismatch in expertise and quality standards. This inconsistency can lead to substandard deliverables, necessitating costly rework.
When it comes to finding resources to bridge the skill gap, having a recruiter on-hand might seem like a solution; but it's often reactive and can delay the process of acquiring the right person at the right time.
In contrast, an integrated talent partner or consultancy can proactively ensure a talent pipeline aligned with your technological and transformational needs, fostering a holistic approach to talent acquisition and retention. This can help prevent the clash in expertise and standards which could cause your project to grind to a halt.
Security and Compliance Concerns
With multiple stakeholders involved, ensuring adherence to security and compliance becomes increasingly challenging. This complexity might lead to vulnerabilities and potential legal issues, highlighting the need for stringent security and compliance measures.
The burden of protecting your business from risk and guaranteeing compliance will, yet again, fall to your in-house teams to co-ordinate.
Vendor Dependence
Relying on multiple suppliers can create a scenario of vendor lock-in, limiting flexibility and posing risks if a supplier underperforms or ceases operations. Your business needs freedom to protect its high standards – and unfortunately, being over-reliant on individual suppliers can dilute your power.
Efficiency Challenges
Working with both a tech consultancy and a tech firm can make it difficult for your project to remain efficient and well-managed, despite the strong skill sets within each supplier.
Issues can include…
Communication Dynamics
Effective communication is paramount in a multi-supplier setup. Miscommunication or misunderstandings can lead to confusion, scope creep, and project delays.
Scope Management
Managing project scopes with multiple suppliers can be daunting. Scope creep is a common issue, where projects gradually expand beyond initial agreements. Engaging an additional talent partner can exacerbate this, as they might not be fully aligned with the technology suppliers' scope, leading to inefficiencies and misaligned talent strategies.
Conflict Resolution
When different suppliers with varying approaches work together, conflicts are inevitable. Efficient conflict resolution mechanisms are essential to stop your project veering off-course. This is likely to fall to your in-house project manager, rather than a mediator within any of your external suppliers.
Cost Overruns
Coordinating multiple suppliers can lead to additional expenses, including project management resources, legal support, and dispute resolution costs. An integrated approach, however, can streamline these aspects, reducing overall expenses.
Time Delays
Coordination challenges with various suppliers often result in extended project timelines. A separate consultancy and firm might react slowly to changing needs, whereas an integrated resource can swiftly adapt, reducing project completion delays.
As always – Time is money!
Before embarking on a project with multiple suppliers, it’s vital to consider if you have the in-house capacity to manage efficiency. Without it, your project could soon spiral out of control.
Cost Implications
Ultimately, working with multiple suppliers can have a price which exceeds any savings you thought you would leverage through this strategy.
This includes…
Increased Management Costs
As discussed previously, engaging multiple suppliers necessitates dedicated project management resources, leading to higher management costs.
Change Orders
Project scope or requirement changes may lead to change orders from multiple suppliers, increasing overall project costs.
Rework Costs
Quality issues due to lack of standardisation or inconsistencies among suppliers can necessitate rework, leading to additional expenses.
Legal Costs
Dispute resolution and contract enforcement may involve legal costs, impacting the project budget.
Efficiency and Productivity Losses
Inefficient coordination and integration efforts can lead to reduced productivity and higher operational costs, especially when engaging a separate talent supplier on top of your tech consultancy and firm.
Before you embark on a project with multiple suppliers, consider if these costs would align with your budget. If it doesn’t line up with your commercial needs, you’ll need to consider a strategy that is less susceptible to unexpected expense.
While engaging different suppliers in technology consultancy and tech firms has its advantages, the associated risks cannot be overlooked.
At Abstract Group, we mitigate these challenges by offering an integrated solution that aligns technology build and consultancy.
We offer an end-to-end, technology-driven service, ranging from digital transformation to technical build, and talent insights to sourcing.
Our approach is rooted in honesty and trustworthiness, with a focus on careful scoping of client specifications to accurately determine individual needs. Moreover, our proven model of a fixed price first approach eliminates the risks of hidden costs associated with a disconnected strategy.
We dive deep into understanding the tech requirements of our clients, delivering value from proof of concept to MVP and beyond. Furthermore, our integrated approach to talent ensures alignment with technical standards and project goals, providing a streamlined service across all stages of engagement.
Ready to discover more about the transformative Abstract approach? Click Here to Find Out More.