Why software vendor consolidation is more critical than ever: Cost savings, security and efficiency head the list
With market volatility, geopolitical tensions and evolving regulations making the future all but certain for businesses, today’s leaders are looking for ways to reduce costs without compromising quality, productivity or security.
There are many different approaches to streamlining — each with their own risks and drawbacks.
But one of the simplest (and safest) ways to cut back without slowing down is through vendor consolidation, or reducing the number of suppliers your business engages with to enhance value and streamline vendor management tasks.
Vendor consolidation and the bottom line
During periods of rapid growth, it’s common for businesses to acquire software and add staff without considering redundancies.
However, inefficiency begins to seep in as business units strike deals with multiple software suppliers, which slowly turns into a flood of duplicative and wasted spending.
While these problems may be overshadowed during periods of growth, they become more apparent during economic slowdowns or times of uncertainty.
By reducing the number of suppliers they engage with, organizations can not only maximize their efficiency, but also unlock significant cost savings.
GRC activities: A high-value target for vendor consolidation
Vendor consolidation is particularly beneficial in the area of governance, risk and compliance (GRC). GRC has seen a rapidly growing demand for data-driven reporting and insights, leading to a proliferation of point solutions and redundant systems.
Consolidating GRC technology can deliver immediate and wide-ranging benefits, including:
- Cost savings: Consolidating software vendors can help reduce procurement costs by eliminating redundant services, minimizing transaction costs, and opening the door to package deals or volume discounts.
- Time savings and efficiency: Working with fewer vendors simplifies procurement processes, reduces administrative burdens, and improves the overall efficiency of people charged with selecting and managing vendors. Consolidating on one platform also simplifies training and improves productivity for everyone who uses the software.
- Enhanced partnerships: Consolidating with a single vendor leads to special "valued customer" treatment, which may include better pricing, improved delivery times and SLAs, and customized offerings. In the case of software platforms, larger customers often get a seat at the table when vendors are planning their innovation roadmaps.
- Improved risk management: By reducing the number of vendors, companies can better manage supply chain risks and increase cyber risk resiliency, mitigating disruptions to production or delivery.
- Control: Consolidating vendors results in greater control over procurement processes, enabling organizations to set standards for quality, reliability, and responsiveness.
- Increased agility: Working with fewer vendors enables companies to adapt faster to shifts in customer demand, respond to supply chain disruptions, and build out new workflows to meet evolving needs.
- Fewer security gaps: In addition to cost efficiencies, vendor consolidation can also enhance an organization's security posture. By reducing the number of software integrations and potential entry points for cybercriminals, organizations can mitigate the risk of data breaches and other security incidents.
Better decision-making starts with fewer vendors
Consolidating GRC efforts with a single software partner or platform creates centralized visibility. This not only increases trust in data integrity, but also accelerates the speed at which reports and insights can be extracted from the data.
With the Diligent One Platform, you can centralize all of your GRC activities and eliminate the need for multiple point solutions, allowing you to drive savings while promoting more informed decision-making. GRC teams can leverage their consolidated corporate record to respond to business needs and deliver better insights faster — and with less effort.
Wondering where to start with vendor consolidation? Read the next article in our series for five steps to success.
