6 ways to streamline IT vendor onboarding

CIOs are no strangers to lengthy, convoluted approvals processes. Every time they want to bring on a new IT vendor, they must go through multiple levels of approval: procurement, legal, compliance, and more. It might take anywhere from three to six months to onboard a new IT vendor, and during that time, the clock is ticking. Whatever problem the vendor is being brought on to solve is only getting worse.

Meanwhile, the trend seems to be toward a more complex and burdensome approvals process. That’s partly because of increased risks and more privacy and compliance regulations, but also the number of checks and signoffs required is constantly growing.

Cybersecurity’s associated indemnification clauses in contracts also tends to be a sticking point, according to Vince Kellen, CIO at University of California, San Diego. What’s required for cybersecurity can vary by vendor, but for services that reside in data centers, there is more of a spotlight, he said.

Finally, contract negotiations and revisions can several months as legal teams revise language and terms that are suitable to both parties.

Sometimes, by the time CIOs get through these hurdles, it may actually be too late to use the new vendor.

Here, experts say, are steps CIOs can take to streamline IT vendor onboarding.

Leverage automation

“Automation is the most effective weapon that IT can leverage to onboard new IT technology vendors,” says David Linthicum, chief cloud strategy officer, Deloitte Consulting LLP. It can be used to automate core processes that are typically manual, such as making sure agreements are signed or that clearances are done on any engineers that need to be on-site. Automation also ensures that compliance processes are addressed, billing and tax forms are completed, and IT vendors are onboarded into payable processes, including with acceptable electronic invoice formats and payment options.

Introduce a workflow system

A common bottleneck in the onboarding process is the workflow itself. Many companies still rely on emails, Teams or Slack messages or other manual reminders to send paperwork, verify information or complete other onboarding tasks.

Lexmark uses ServiceNow to manage its workflows, which streamlines the onboarding process, says Vishal Gupta, SVP, chief technology and information officer at Lexmark. This eliminates the manual back-and-forth that can eat up valuable onboarding time.

Set technical integration standards

Onboarding a vendor can also take a while if their technology doesn’t integrate. Education has standards for some forms of integration, such as data integration, which can streamline the process, according to UCSD’s Kellen. “If there are de facto industry standards, go for those,” he said.

“Wherever possible, push vendors to newer integration techniques versus older ones,” Kellen said. For example, this can include modern integration methods that allow for streaming data, such as Kafka. These techniques are usually lower cost than RESTful APIs that are popular with classic ERP vendors.

“Getting vendors to adopt the most modern techniques and (using) standards streamlines the onboarding process,” he said. This typically applies to software vendors, but even hardware vendors today have services that need to integrate with existing technology, he added.

Consider contract consortia

Pre-negotiated contracts can also speed up the onboarding process, according to UCSD’s Kellen. The public sector often has consortia that pre-negotiate contracts, making them more appealing to procurement officers.

For smaller organizations that don’t have access to consortia, Kellen advised retaining legal counsel that can negotiate an initial agreement. All work performed after that initial agreement is signed can be done under those terms. While this may lengthen negotiations at the beginning, it can ensure that companies don’t run into any unforeseen consequences later, he said.

Classify vendors

Another way to speed up IT vendor onboarding is to classify vendors in tiers, then apply the appropriate approval activities to them. “Organizations and IT departments should not apply a ‘one size fits all’ approach to vendor onboarding,” said Steven Jeffery, principal research director at Info-Tech Research Group and Software Reviews. “Classifying or tiering your vendors as part of the due diligence process will help identify your true strategic, operational, tactical, commodity, or Tier 1, Tier 2, Tier 3 vendors.”

Anticipate future needs

While no one can entirely predict the future, anticipating the company’s needs in advance and beginning the procurement process as soon as possible can mean a much shorter onboarding time. An organization might reach out to a preferred vendor and let them know in two years that an RFP is coming, for example.

“If they get early notice, they can gear themselves up so that there will be fewer delays,” UCSD’s Kellen said. “It just requires good planning on the company’s part to prepare the vendor for what you’re doing.”

Vendor Management