That Scummy Multi-Vendor Ecosystem

I’ve seen this concept at a ton of places I’ve worked, although it was extremely pronounced at the last 2–3 places I’ve had contracts with: basically, the place has 10–12 vendors, often with overlapping roles. They’re paying six arms and six legs worth of money each month to these vendor retainers, and during periods where internal leadership isn’t clear, often the vendors are just billing for a month where they did no work — and because there’s so little oversight, no one really notices and if someone at the top does and asks, “Why are we paying vendors so much?” the response is usually “Cost of doing business!”

On one contract I was recently on, we lost two “heads of marketing” (loose term) in about four weeks, largely because marketing at this place had become a complete joke — sales guys were making their own slide decks and graphics. You know the deal. You’ve probably seen these places yourself. I’ve worked at 6–7 versions of this.

When we lost the second “head of marketing,” as a search was conducted for hopefully a final solution (bad term) marketing honcho, a bunch of us convened for a meeting. The CEO and CFO were concerned about marketing spend relative to output. At this meeting, someone put a spreadsheet on the video call (shared screen) and we had twelve vendors. And I mean 12 just within marketing: “digital experience,” “social media,” “HubSpot clean-up,” “influencer social media,” “landing pages,” etc. It was insane. We also had some guy named Jeremy who sat in front of a weird books-and-plants background and talked about “customer experience” and “life cycle” and we were paying him thousands per month, even though we never enacted any advice he gave us.

It was an absolute cluster-fuck of a situation. And again, not just this one place. I’ve seen this a dozen times.

In summer 2013, at McKesson, a law school student who sat near me found a vendor they had been paying $95,000/year to for six years — and he had done no work at all in those years. When they got him on the phone, he was in the Caribbean. You cannot make this up.

What’s funny or interesting to me about these stories is that a lot of middle managers and executives pride themselves on how they’re relentless executors and have so much attention to detail, so theoretically they would know (a) what these people are doing and (b) which spend is effective vs. which spend isn’t. I’m not saying “eliminate all vendors.” Many vendors make a lot of sense in terms of specialized roles. Lots of organizations don’t have someone who is good at HubSpot or Salesforce internally, so until those muscles are developed, a vendor is a good choice.

The presence of over a double-digit number of vendors tends to get scummy, though, and you create weird Hunger Games type contexts where vendors are battling each other and almost trying to show another vendor isn’t helping the client — in order to get more business from the client. You also tend to have vendors that want to get to the next billing cycle/invoice, so they delay certain projects and timelines just to be able to bill once more. (Seen that about 147 times. Also have done it myself.)

Overlapping roles is a concern too, but not necessarily a huge concern — because most of the companies hiring these vendors tend to have overlapping roles internally anyway. We’re not very good at job design here in the US of A.

What’s your take on a multi-vendor ecosystem? Ever seen it work?