One of the biggest challenges with any organization is managing vendor services. Depending on the size of the company, it can need dozens of vendors to manage everything from their IT systems to their office plants.
Financial institutions are no strangers to this challenge. Equips has found that most banks and credit unions need about eight different vendors just for their equipment maintenance.
To improve operations, some businesses try to consolidate their list of vendors. However, this option needs to be weighed carefully as many companies aren’t prepared for the costs and limitations that come with vendor consolidation.
Why consolidate your vendors?
On paper, vendor consolidation seems like a straightforward way for a manager to improve operations. By simply reducing the total number of vendors, a couple of clear benefits quickly emerge, including:
Simpler processes – By consolidating, businesses don’t need to keep track of the right forms, rates, phone numbers, and processes for dozens of vendors. For staff, vendor consolidation means they don’t need to remember or check which vendor performs which services when a problem occurs.
Time savings – After consolidating services, accounting will have to deal with fewer invoices and are less likely to make mistakes when making a payment. (We’ve written about these types of benefits in an earlier article on single-source billing.) Working with a larger central vendor can also streamline things like getting quotes, scheduling, and accessing work history. Communication can also be faster since a consolidated vendor offers a single point of contact for all types of support.
Unfortunately, consolidation doesn’t just come with benefits, it can also have several drawbacks. In fact, no matter what approach a business takes in organizing vendors, each will have specific difficulties and expenses.
If the goal is efficient management, an institution will look for a single vendor that does many services and operates in an area that covers all its branches. These vendors deliver all the benefits listed earlier, but there are relatively few of them and a business’s options may be extremely limited. Large vendors tend to offer a lot of features and aggressive pricing to get business, but may raise prices in the future when they’ve eliminated smaller competitors.
These single vendors aim to grow and monopolize as much of their clients’ vendor work as possible. Their goal is to become a one-stop-shop for clients. While this makes things more efficient, the business can quickly become dependent on the vendor, and there will be no easy way to break away from it even if its prices go up.
Another, less obvious problem with a consolidated vendor is the speed and quality of servicing new technology. No one technician can be good at everything. A consolidated vendor technician cannot possibly keep up with all the new technology located at a bank or credit union. Although they will have the ability and tools to complete a repair or service eventually, it may take them much longer than a specialized vendor. This can increase the total downtime of equipment and hurt customer satisfaction.
Consolidation is not a requirement. Yes, determining the best vendors for each branch location creates a lot of paperwork and complications for staff; however, it can also provide branches with the flexibility to find new vendors easily and shop for competitive rates. If a branch is able to find a quality vendor, it can easily recommend that other branches use them (if they are in the service area). Eventually, the institution will reach a point where each branch is getting the highest quality work possible for its location—even if it’s not as efficient.
Equips offers a better way for financial institutions to consolidate equipment maintenance and vendor management. Our system allows you to work with unlimited vendors while delivering the streamlined processes of a single service that covers all locations and equipment. This gives you all the benefits of consolidation (single point of contact, less paperwork, time savings) without jeopardizing the quality of service.
But the benefits don’t end there. Our digital maintenance portal allows you to check the status of devices at any branch and makes submitting and tracking service requests fast and easy. Equips can also help lower maintenance costs directly by negotiating competitive rates from vendors.
All this is done with minimal disruption to operations. We work with your existing vendors, so the maintenance still gets done in the same way—we simply make it easier to manage.
Contact Equips today to find out how consolidating vendor management can help your financial institution.
Equips is revolutionizing how Banks and Credit Unions manage, maintain, and protect critical branch equipment. Leveraging a network of 500+ vendors, experts at Equips help Financial Institutions respond to equipment problems quickly in one place: Equips. Active management allows Financial Institutions of all sizes to improve operational efficiency, cut costs, and streamline equipment inventory and vendor management. Our groundbreaking solution provides clients across 45 states with better insight and transparency into their critical equipment and enables employees to do their best work. To learn more visit equips.com.