Vendor consolidation trend: efficiency vs. uncertain ROI

2024 Gartner Digital Business Buying Drivers Survey mentions that 87% of companies think they have a lot of vendors with similar capabilities to choose from. What’s more, one of the top reasons for changing suppliers is related to unclear value they provide.

According to another Gartner source, by 2025, it is predicted that 70% of organisations will consolidate the number of vendors securing the lifecycle of cloud-native applications to a maximum of three vendors.

This trend, vendor consolidation, refers to the strategic action of reducing the number of suppliers an organisation works with. In general, this process aims to optimise operations, enhance efficiency, and achieve significant cost savings.

Initially, the primary motivation behind vendor consolidation was financial – organisations sought to lower expenses and simplify procurement by limiting the number of vendors. However, as these financial benefits have largely been realised, the focus has shifted towards ensuring that vendors deliver measurable value and achieve previously defined goals.​

What’s more, managing multiple vendors has become increasingly complex due to tightening regulations that impact not only businesses, but also their suppliers. As compliance requirements grow, organisations find it more effective to work with a select few – typically one to three – trusted partners who can meet both operational and regulatory demands.

Companies are now emphasising the importance of establishing clear Service Level Agreements (SLAs) and Key Performance Indicators (KPIs). These metrics provide a framework for measuring vendor performance, ensuring accountability, and aligning services with the organisation’s strategic objectives.​

This highlights the critical need for suppliers to focus on transparent, measurable performance metrics to ensure that their services and partnerships deliver the expected value and support clients’ business goals.​

Read about IT transition after a successful vendor consolidation process: Ensuring a smooth IT transition: a proven framework for success

Engineering for outcomes: a value-driven approach to technology partnerships

At Future Processing, we have recognised that our clients need to measure results and establish clear metrics to ensure the success of their technology initiatives. They also expect transparent progress tracking and the ability to compare vendor performance effectively.

Beyond that, they seek true ownership of results, working with partners who take full responsibility not only for delivering value but also for addressing inefficiencies or mistakes – without shifting the blame to the client.

That is why we created the Performance-led Engineering model – a collaboration framework designed to deliver measurable business value. Instead of traditional team augmentation, we focus on outcome-driven partnerships, where performance is tracked using industry-standard metrics like DORA and SPACE, as well as client-specific KPIs such as Cycle Time, Sprint Completion/Planning Accuracy, Time to Release, and First Time Pass Rate (FTPR).

Our pay-only-for-performance model, backed by a money-back guarantee, aligns with our clients’ unique business goals. This is our bold statement of accountability, demonstrating the commitment to delivering real value and taking full ownership of the outcomes we promise.

We introduced this approach because we have the experience, confidence, and proven capabilities to deliver real, measurable results – ensuring that our clients can expect reliable outcomes and a true commitment to success.

This approach ensures that every aspect of development contributes to tangible improvements in efficiency, reliability, and business impact. By aligning our engineering know-how with clearly defined success criteria, we provide transparency and continuous optimisation, ensuring that our clients achieve their strategic objectives.

Business and technical success through metrics-driven development

As we already mentioned, delivering real business value requires a data-driven approach to software development. By leveraging our structured internal processes and key performance metrics agreed during the Value Box meeting, we ensure predictability, efficiency, and continuous improvement in every project.

Measuring success: the metrics that matter

Through our Performance-led Engineering model, we ensure that every project is aligned with clear, measurable goals – not just technical deliverables, but real business outcomes. From the very start, we focus on translating your business objectives into project goals through a structured, metrics-driven approach.

This process begins with a Value-Box meeting, where we work together to establish preliminary KPIs that reflect what our success should look like. However, we recognise that defining the right metrics takes time and real-world validation. That is why we include a two-month calibration period, during which we track, refine, and adjust these initial KPIs to ensure they truly capture project performance and business impact.

Once this phase is complete, we agree on the final KPIs – providing a solid foundation for continuous measurement, improvement, and tangible, outcome-driven success of the project.

Internal processes for predictability and efficiency

From the initial consultation to delivery and ongoing support, we align our efforts with business goals, ensuring predictability, efficiency, and value-driven outcomes.

Our process begins at the pre-sales stage, where we focus on understanding what matters most to our clients. We define business objectives, constraints, and success metrics, providing a tailored value proposition backed by data, industry best practices, and real-world case studies. This allows us to structure the project effectively, ensuring that investment decisions are made with clarity and confidence.

Once the project begins, we establish transparent communication channels and role definitions using frameworks like RACI/DACI, ensuring all stakeholders are aligned. Our Value Box meeting helps transform business goals into project objectives, setting preliminary KPIs that undergo a two-month calibration period before being finalised. This ensures that only the most relevant and actionable metrics drive project success.

Delivery is data-driven and iterative, with a focus on agility, industry standards (ITIL, DevOps, Lean IT, Agile, DORA), and continuous performance tracking. We use our internally developed Delivery Success Indicators to monitor efficiency, while structured reporting provides clients with clear visibility into project progress. Dedicated Delivery Managers ensure optimal resource allocation, adherence to budgets, and alignment with deadlines.

Beyond project completion, we provide ongoing support and optimisation, proactively identifying areas for improvement, ensuring compliance, and managing infrastructure in a cost-effective, scalable, and secure manner. Our global support model ensures 24/7 availability, while response times and incident resolutions are guaranteed by SLAs.

With a structured, metrics-driven and performance-led approach, we deliver tangible business value, not just software – maximising efficiency, accelerating delivery, and ensuring that every project outcome aligns with our clients’ strategic goals.

Real-world impact: how clients benefit from Performance-led Engineering

A business intelligence company

One of our clients, a business intelligence company, develops its premium products with the support of multiple vendors, including our team. The differences in performance between the teams are striking – highlighting the impact of a data-driven approach, transparent success metrics, and Performance-led Engineering.

For this client, our average time to release is around 2.5 days, while the second vendor’s team takes an average of 9 days – making our result nearly 88% faster.

Despite working with the same methodology, scope, and requirements, our cycle time to deliver a task with a viable demo is 75% shorter. We complete tasks in less than 4 days, while the other team takes up to 20 days.

By continuously tracking performance metrics, we ensure ongoing improvements, delivering value faster and more efficiently. This is Performance-led Engineering in action – driving measurable results that align with business goals.

An insurance company

Another one of our clients, an insurance company, needed a large-scale cloud migration and automation to optimise processes in their application for managing insurance claims. The key focus was on improving efficiency, stability, and service predictability – all while handling an extensive backlog of ongoing work.

Now, two of our engineers deliver the same output as another four-person team. Before we reached that stage, the client did not pay for several of our team members until we defined the success metrics and delivered the first measurable results. This is the impact of Performance-led Engineering – maximising efficiency, accelerating delivery, and ensuring business value.

The results speak for themselves. Our team achieved a 90% reduction in deployment time and cleared over 40% of the BAU backlog in just 7 days, demonstrating a 2.5 times increase in ticket closure speed. Thanks to automation and a performance-driven approach, we doubled operating speed and significantly improved collaboration – delivering tasks five times faster.

Move beyond traditional team augmentation with Future Processing’s pay-only-for-performance model, ensuring financially guaranteed efficiency and predictable delivery. Contact us today and let’s work together to achieve your business goals faster and with higher ROI.