6 short-term tactics to mitigate vendor lock-in

Welcome to Vendor Lock-In - a potentially disastrous scenario where a business cannot switch or move away from a supplier because it’s too challenging, expensive or impractical - leaving them bound to a provider that cannot adequately service their current and future business demands.

Exiting a contract mid-term is almost impossible, so the most effective way of combatting Vendor Lock-In is to avoid it altogether by implementing procedures, insights and policies into your procurement workflows and strategies.

Process-driven avoidance takes collaborative input, preparation and (above all) time, though the benefits of a consistently right-sized and constantly accurate tech stack - which empowers business growth without restriction, saves money, and advances you ahead of the competition is more than worth it.

However, there are short-term fixes you can implement for contracts that are imminently due for renewal or are fast approaching expiration that will help protect you as you create your long-term strategic shield. 

Our team of Procurement experts, who deal with high-stakes negotiations every day, give their top short term remedies to stop the spiral of Vendor Lock-In:

1. Sufficient negotiation time

Give yourself enough time to negotiate, whether this be a renewal or a transition to a new vendor.

2. Insert break clauses as standard

96% of contracts don’t include customer negotiated break clauses, so mandate some basic performance-related SLAs and associated break clauses - even if it is during the contract term.

3. Risk assessments

Complete a comprehensive assessment of your financial, operational, data and security risks, to ensure you are picking the right vendor that safeguards your business.

4. Conduct cost analysis

Consider your upcoming renewals and evaluate the associated costs and benefits with a renewal (or non-renewal) decision. This includes total cost of ownership, budget, and build vs buy - and will help you to see the scale of the spend you are dealing with so you can prioritize efforts accordingly.

You’ll likely need more advanced procurement metrics to fill this gap. Check out The Procurement Metrics That Matter Report to start analyzing data that makes a difference.

5. Cross-department collaboration and knowledge sharing

Link up with product and engineering departments to plug gaps in technical expertise and get insight and advice into current offerings and the future trajectories of technology.

6. External market research and supplier relations

Use third-party resources and reports (e.g. from Vertice, Gartner, Forrester etc) to conduct some up to date market research, so you know your options better. This is a fairly time-efficient way of scoping out the market, and you can leverage or proposition current suppliers to try and match what you find out there.

The most effective way to avoid Vendor Lock-In is to use these tactics to buy yourself time and a bit of protection as you build and implement your long-term strategies. 

To understand more about Vendor Lock-In, and to discover what these long-term strategies are, download a copy of our Avoiding Vendor Lock-In report.

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