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Single Vendor vs. Multi-Vendor Sourcing: Which one Should You Choose?

Single Vendor vs. Multi-Vendor Sourcing

Outsourcing scopes for facilities management is the future, with many proven business benefits, particularly in specialty scopes and technical services like access control. As a result, many vendors have broadened their offerings to create more opportunities to become single vendors for their customers.

There have never been more companies and services for contracting and outsourcing services. However, businesses that want to outsource any technical tasks and services typically face two choices:

  1. Find a single vendor and delegate all aspects of project implementation tasks to that partner.
  2. Find multiple vendors with niche expertise in one or more project areas and work with all of them separately.

The decision to collaborate with a single vendor vs. multiple vendors will have far-reaching business consequences for any company. Hence, there are important considerations with either option, both of which can bring a unique set of pros and cons.

Cost

  1. Single vendor sourcing will typically offer more competitive pricing, possibly with package or bulk discounts. It’s also easier to scale depending on a business’ growing or shrinking needs in any operating area.
  2. As lower levels of ordering or collaboration will decrease the bargaining power, multi-vendor sourcing will likely cost more and have less flexibility in scaling.

Time and Convenience

  1. Single vendor sourcing means there’s a lot less to manage and streamline, saving time and hassle. A vendor may already be working for similar companies under a Master Service Agreement for sister companies or have the ability to offer additional services beyond your current offering.
  2. Multi-vendor sourcing brings a larger volume of administrative and managerial duties.

Deployment and Staff Training

  1. With single vendor sourcing of technical tasks and services, the need for staff training will be minimal.
  2. Multi-vendor sourcing will likely require a more complex process of staff training and deployment.

Compatibility

  1. While working with a single vendor, a company is a lot less likely to run into compatibility issues. Furthermore, any updates or upgrades will be more comprehensive.
  2. Multi-vendor sourcing will translate into using smaller packages from each vendor and potential compatibility issues. Updates or upgrades might be fragmented and haphazard.

Long-Term Partnership

  1. Business stakes are higher for a single vendor: They’re better positioned to deeply understand the needs of a customer, and attend to them, improving the overall customer experience.
  2. A long-term partnership with multiple vendors might be trickier, as they’ll have less contact with the company and thus fewer insights about the business.

Final Verdict

Single vendor sourcing can answer many challenges in your business by improving efficiency, saving time and resources. However, it also presents the risk of putting all eggs into the same basket. Thus, while executing such a crucial decision, we invite business leaders to conduct extensive research about the single vendor they might collaborate with, get references, and ask all the necessary questions.

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