How to Avoid the Pressures of Technology Consolidation
The pressure on organizations to consolidate their technology stacks is mounting. 83% of a set of 2023 survey respondents say they feel significant pressure to consolidate. This is according to a recent CIO.com survey. The needle is moving.
93% say they intend to undergo tech consolidation by the end of 2024. The glass on the pressure gauge is beginning to crack.
I’ve worked in the B2B technology arena for more than 25 years. I know how difficult it can be to migrate from one vendor’s solution to another. I know the risks and challenges that come with tech consolidation.
I also know that you need to choose a strategic vendor that goes out of its way to understand your business needs and technical requirements. With such a vendor, you can modernize your enterprise architecture and become a more sustainable company for years to come.
Let’s look at how this pressure spiked and how you can spot a strategic vendor to help release the tension of tech consolidation.
Why tech consolidation: When ‘right now’ is the wrong way
My B2B experience has offered me a deep look into how organizations use technology to solve problems.
The IT ideal goes something like this:
- A problem or opportunity is identified.
- A software product or vendor is chosen as being the exact solution to that problem
- The product is purchased, rolled out, and adopted.
- Problem solved.
This is a common, shared dream. But it’s rarely anyone’s reality.
The issue is that even the best organizations out there have a siloed mentality. This way of thinking begets a ‘right-here, right-now’ way of selecting a vendor.
Take business process management (BPM) for example. One business unit—let’s say accounts payable—finds a BPM vendor that is a just-right solution for their problem. But that solution doesn’t work for HR, so HR finds its own BPM vendor. But that vendor doesn’t happen to be compliant in Europe, sot the EMEA HR team must—once again—find a new BPM vendor. Three separate low-cost tools doesn’t sound too bad.
In a large, global company, however, this issue snowballs. Different geographies, different teams, different departments. They often roll up into unique business units or budgets, all with specialized vendors for point solutions.
Several BPM products later, these teams may have automated processes but they’ve also managed to create a complex web of architecture and governance. Also stuck in that web:
- Maintenance costs
- Licensing fees
- Security risks
- Resourcing issues
Another scenario: An organization I recently talked to had purchased a highly considered BPM tool from a reputable vendor. They solved their process issue.
The tool was so expensive, though. The organization felt like it needed use it to solve (or attempt to solve) every problem under the sun to justify the cost.
You don’t need that much horsepower with BPM tooling. So this organization used that tool’s bolt-on low-code capability to build applications that solved other problems.
Problem solved, right?
Not quite.
The frontends were suboptimal. Integration was a pain. Maintenance was cumbersome.
When it comes to technology adoption, the way organizations are solving problems right now is, in fact, a problem.
Over-investment in point solutions has now led to 80% of organizations rethinking their strategy and aiming to do more with fewer strategic vendors according to CIO.com. Selecting a software product from a vendor needs to be a more holistic process rather than just solving for the here and now.
You need a vendor that helps you address the present and the future. A vendor that has your business strategy in mind. One that helps you create a sustainable internal mechanism to solve problems.
Strategic vendors for tech consolidation
The B2B world is where it is because in the past, organizations were struggling by relying on just one vendor. They couldn’t meet the demand for new software solutions internally. Organizations were stuck building custom monoliths or working with one or two inflexible vendors.
It’s why point solutions became so popular. Organizations rarely adhere to the idiom “all good things in moderation,” though.
Instead of a monolith, there’s this amalgamation of point solutions. Just look at the DevOps lifecycle. You have many products managing the development and delivery of an application. You could very well have 8+ products in that lifecycle alone.
These vendors and their products may be the best of the best at what they do. But what they do doesn’t mean it fits all your business needs. You’re seeing the pendulum just now starting to swing back toward consolidation with fewer vendors. As you make your way through tech consolidation, find a strategic vendor.
The 6 qualities to look for in a strategic vendor
What does a strategic vendor look like? How do you avoid getting locked in with one who doesn’t work for you? Here are some of the qualities you need to look for.
1. Understanding
They’re a keeper if you can find a company that understands your business needs. Strategic vendors should be partners in your tech consolidation efforts. They should help solve software problems at an organizational—not individual—level.
An organization that understands your business needs should also understand the risks that come with technology consolidation. Migrations, people’s willingness to change, security, are just a few things that a vendor should help you focus on.
2. Open and flexible
If the technology isn’t flexible enough, you’ll be back to where you were a few years ago: mired in customizations. A strategic vendor provides an open and flexible product that works with you and your tech stack, not the other way around.
Red Hat, for instance, is exemplary at this. Its product is open and often driven by its community– the ones who best know what it needs.
3. Financial flexibility
Technology consolidation can be so expensive that initially it doesn’t look like the juice is worth the squeeze. A strategic vendor knows this and should try and work with you to mitigate or lessen the pain of those initial upfront costs.
4. Viability
Nearly 70% of respondents to that CIO survey mentioned earlier indicate that they worry about vendor viability. Make sure the vendor you’re looking at has a significant parent company backing it.
5. Eco(system) friendly
A good software vendor knows that they can’t provide you with everything you need. So they leverage their partnerships and help you leverage yours. Look for a product that makes integrations and customizations easy through a partner-driven ecosystem. This way, you meet your needs but don’t have to rely on more vendors.
6. Function, not features
The right software vendor for tech consolidation is not providing you a right-here, right-now solution or a menu of features. Rather, look for a product or platform that gives you the ability to build, migrate, integrate, and deploy your solutions the way that best fits your organization.
Releasing the pressure
Technology consolidation can have drawbacks. Such an initiative brings disruption, which can be hard on your organization’s personnel.
People are creatures of habit and are used to the things they have. They fear risk. They wonder if such an initiative will jeopardize their job. Technology consolidation disrupts all that.
With your next technology choice, make sure you go with a strategic vendor that offers more than just a point solution. You want a vendor that not only has the right product in place, but also has a practice that helps you adopt it, roll it out, and show you how to institute change throughout your organization.
They won’t make those challenges fully go away, but the right vendor should help you understand and mitigate. Find a vendor that helps you turn the valve to slowly decrease the pressure.