Partner vs Vendor: Which Provides More Business Value?

By David Degitz August 8, 2022
Business partnership shaking hands office

“A true partnership takes time to establish. It is well-balanced and it’s based on trust. The value is priceless.” – Jean Holley, Board Director, OneSpan

In a rapidly transforming business world, it is vital for companies to differentiate themselves from their competitors. More often than not, the best way to do this is through nurturing authentic partnerships with their clients. A partnership is a commitment to an ongoing relationship. Solid partnerships endure the ups and downs of a long-term investment. While a vendor relationship implies a sale and service agreement, a business partnership doesn’t end when a contract is signed.

Partnerships take time and investment, with both parties committed to each other’s success. Working strategically with a business partner ensures a mutually beneficial agreement built on trust and a shared vision. The difference between a vendor vs partner comes down to this: vendors will sell you what you want, but a true partner will coach you on what is best for your company’s long-term business goals – even if that means turning down easy, short-term sales.

The Value of a Partnership

 “At the end of the day if I have issues or problems, I can’t blame a vendor. It’s important to me that we do business with companies that share the same values and culture as we do and also place a premium on being a good partner, not just somebody to sell something to you.” – Lee Crump, CIO, Rollins

Vendor relationships are not collaborative; there are clearly defined responsibilities and boundaries. While a vendor might deliver a product or service, they aren’t invested in their client. On the other hand, partnerships can provide incredible value for a business. This value can manifest in many ways, including:

1. Alignment with the business

While a vendor only offers a product or service, a partner becomes an extension of your business. A company might have limited IT staff in certain technology areas and limited time to allocate toward developing the knowledge and capabilities of their internal team members. True partners can expand an organization’s day-to-day bandwidth and capabilities. A partnership offers all the flexibility and expertise of an entire team combined with a commitment toward a shared vision. With an expanded team, internal employees focused on their strengths, and an increased depth and breadth of knowledge – a business can innovate much more successfully.

2. Improved TCO

With a good partnership you can almost always produce more output for less money. True partners offer a transparent relationship and proactive engagement, improving your total cost of ownership. There is a mutual and respectful fiduciary commitment to the relationship. You have the ability to iterate on scope and what you’re buying. A vendor relationship doesn’t provide that level of detail or true guidance. Partners also often help you make cost-saving decisions, while a vendor is generally not in the position to help you choose options that save money. Finally, a business partner will make financial investments from time-to-time.

3. Long-term thinking

In a vendor arrangement, you identify a specific need, maybe run an RFP process with limited collaboration and then purchase a product or service. Therefore, a vendor won’t have the broad perspective of someone who can look at how an organization is changing and growing over time. A business partner has additional perspective that sets up the client for success down the road and empowers them to make very good extensible decisions along the way.

4. Boosted company morale

Many organizations rely on multiple third-party vendors and juggling those relationships can bog down an already-busy IT team with non-strategic tasks. Moreover, a vendor relationship establishes clearly defined roles that end up being a line in the sand as opposed to a collaboration. With a business partner, internal employees can focus on areas where they’re best suited to work and areas that support the strategic goals of the company. Partnerships allow a client to have energized employees who feel better supported and valued by their company.

5. Mitigated Risk

A partner can ensure continuity and risk mitigation in situations where a company has employee turnover, retirement and/or immediate needs for additional skills and capacity. This operates like insurance for an organization to preserve institutional knowledge and safeguard against a loss of productivity or critical business information.

Business people meeting

The Characteristics of a True Partnership

“Vendors come and go based on opportunity and are hyper-focused on transactions and deals rather than building an enduring relationship. Partners form business relationships built on mutual trust, transparency and shared risk/reward. They aren’t discouraged by the lack of short-term deals and will continue to invest in a relationship. Partnerships are fluid, flexible and respectful – and depend on honesty and integrity to succeed. As a CIO, I invest my time and resources in partner relationships and deal with vendors only when absolutely necessary.” – Jay Ferro, CIO, QUIKRETE

1. Trust

True business partnerships are built on trust. Trust is earned over time by always following through with what you say you’re going to do. It’s also built through being completely transparent in your business operations and how you work together as a team. Partners are willing to have honest and transparent conversations about what is going well and what is not.

2. Similar culture & values

To have a good business partnership, the client and outside partner often need to share a similar mindset in terms of their company culture. These shared values strengthen the relationship not only between the executive-level decision-makers, but also between all employees at both the client and partner. For example, if both groups believe in giving back to the community and promote that internally, that’s a shared way of doing business that everyone can be proud of.

3. Advisor focus

A business partner doesn’t worry about selling something this quarter or this year. Instead, they are focused on giving their client the right advice for today as well as tomorrow. Getting Naked by Patrick Lencioni is a fantastic resource for service providers who want actionable tools for using humility and integrity to gain a competitive advantage. Transparency and vulnerability drive loyalty and trust.

4. Proactive guidance

Partners work proactively with their client. A good business partner will keep their finger on the pulse of the organization that they’re serving. With frequent monitoring, they don’t need to wait for a client to ask for something but will instead take charge and offer relevant advice on emerging products and services.

5. Commitment to course correcting & growth

A partnership requires bi-lateral communication. It is incredibly valuable to have standing business reviews where each party can rank or score the other and then talk constructively through those rankings. Business review meetings require both parties to be vulnerable and listen intently to better understand how to work together. Additionally, as business changes, services may need to change and evolve. Recurring, transparent business reviews provide a constructive forum for service providers to consider evolving their services to meet their client’s future needs. Those evolved services might then be a good fit for other clients, further growing the business.

The ivision Way

“What I really admire about ivision is they’ll tell me when they can do something, when they can do it well, and then I contract with them to do it and they live up to that commitment and they do things well. By the same token if ivision can’t do something well, they’ll tell me that. I admire the fact that you’ve actually turned away business from the Braves because you were not confident that you could deliver it to the capability that you would want to. That’s what a partner does.” – Greg Gatti, VP of IT, Atlanta Braves

At ivision, we are committed to delivering white-glove service for our clients. To learn more about ivision’s strong business partnerships, take a look at our client testimonial videos. Each relationship is built on clients’ confidence that we are putting their interests first.