What should your organization ask itself to determine whether retaining a tech vendor is the best move right now?

We’re finding that some digital leaders, such as those in many B2C commerce organizations, are choosing to stay with the tech vendors that they already have in place. Why is that remarkable? It’s a shift from earlier years when they were more likely to be swept off their digital feet by other vendors’ promises of competitive ROI and sparkling innovation.

Today, digital business leaders are instead prioritizing how they consolidate or reduce the software products in their ecosystems. One reason: Leaders who already have made the move to SaaS solutions often cannot justify the business case for replatforming. Plus, they don’t want incur the costs, disruption, and (inevitable) unexpected issues of a replacement project.

But what if your current vendor isn’t innovating or providing the support that you feel your organization needs? To help determine whether your org is better off retaining your vendor or looking for a new solution, analyze your current vendor in light of the following questions:

  1. Can you — and your customers and employees — stomach the costs of staying put with your current vendor? Avoiding replatforming might seem less expensive because the transition itself brings inherent costs, but don’t discount the costs of staying with a vendor if you’re being left behind in terms of functionality that may create better customer and employee experiences. Think specifically about:
  • The hard, direct costs of the current system. Analyze everything included: subscriptions, licensing, support, ongoing customizations, and potentially hosting. Factor in potential increases due to usage-based pricing, plus the costs of maintenance over time, as the solution ages.
  • The hard, direct costs for a potential new vendor — plus the costs of the migration. These expenses may be recorded differently, but they’re still real costs of the change. Include training, potential new hires to bring in expertise, testing, and other costs of the transition.
  • Whether your current solution will help you keep up with competitors. For each solution, analyze the impact on both customers and your employees. For example: Will you struggle to provide relevant search results and sacrifice conversion? Will customer experience suffer with poor post-purchase messaging and shipment tracking — and drive higher costs and volumes for customer care? Are competitors providing clear inventory availability in stores while you can’t? Will associates have a harder time fulfilling online orders for in-store pickup?

 

  1. Are you getting enough of what you need from the current partnership? Culture fit is an often-overlooked factor in vendor selection and retention. You’ll know if it’s working. When it’s not, and if you’ve done all you can to communicate with your vendor about the relationship, it may be time to move on. Remember that:
    • All strong vendors perpetually innovate. Do you receive inspiring new functionality from your vendor? Do you also feel that you have influence over its roadmap?
    • Technology vendors in your ecosystem must be true partners to your organization. Is each of the vendors in your ecosystem an ally? What’s their history of delivering on promises and building trust with your teams? Is your organization able to work on improvements and innovative solutions alongside your partners? What does support look like, and is that working for your internal teams?

If retention feels like a good fit for your organization and you want a strategy to “win” the renewal game, check out Forrester’s report, The Digital Leaders’ Guide To Acting As Your Own Tech Retention Advocate.

For Forrester clients who want a buyers’ guide, please schedule an inquiry or guidance session with us here.

(coauthored with Senior Research Associate Delilah Gonzalez)