Vendor Support vs Third-Party Support: What’s the Best Approach?

Larry Dube

When managing a portfolio of enterprise applications, choosing the right support option presents a chronic strategic dilemma. While vendors offer unmatched expertise for new product offerings, their commitment to past versions of the same software can fade fast. Meanwhile, third-party support providers introduce opportunities for more customization (and broader cooperation across different applications and projects).

In this article, we outline the benefits of relying on vendor versus third-party support for your enterprise applications. Ultimately this decision is all about maximizing the value that your support dollars return.

Foundational Considerations: Is Third-Party Support an Option?

Before considering the specifics of each approach, IT needs to consider a few factors that can decisively determine whether third-party support is a viable option.

1. Is the software in question designed to be accessible to third-party support providers? Some of the largest enterprise applications in the world—like the MS Office suite—have nearly completely locked down their source code, deliberately precluding third-party support. For this software, vendor support is the only real option. If third-party flexibility is a must, alternative software needs to be considered at the procurement stage.

At the other end of the spectrum, some products are designed with customization and third-party support in mind, even including API’s that simplify third-party support provision.

2. Are you contractually free to use third-party support? Some vendors have become increasingly aggressive about precluding third-party support as part of the software license agreement, drafting the license to be contingent on continuing to pay for their support services. In this case, once again, IT should carefully consider future support needs before entering into a licensing agreement.

3. What’s your versioning strategy? If keeping up with the latest product updates is imperative for your industry, vendor support may be an indispensable resource. If you plan on sticking with the current version of an application for an extended period, customizing it to your business needs, the cost and expertise advantages of a third-party support provider can be substantial.

Vendor Support: A Product-Defined Approach

At a high level, software vendors have an incentive to retain you as a client, and they want to make their software work for your business. However, they also face a clear incentive to keep clients moving toward the latest version of their offering, whether that’s a new update or a new product entirely. For vendors already investing in developing new products, maintaining robust support for older products quickly becomes cost prohibitive. Pushing clients toward new products is essential for maximizing licensing fees.

This incentive rears its head in several ways. 

First, rather than customize your software with a needed feature, the vendor is more likely to add it to the feature list for their next version. Ideally, this process will result in a robust, well-tested new feature, but the versioning timeline for major enterprise software releases can be a matter of years. Second, vendors will rarely support applications that have been customized. Custom development generally nullifies vendor support options—large software companies simply can’t afford to maintain a knowledge base on each client’s specific implementation.

Ultimately, there’s very little gray area when it comes to what vendor support covers. They support their products, not other products. And they support their default configuration, not the precise deployment your business has applied to its own operational needs. In practice, this can mean that vendor support is tightly constrained to functional assistance like answering questions, addressing bugs, and cataloging feature requests for future versions.

Even simple service requests like bug-fixes, however, run up against the reality that software developers likely serve a large and diverse customer base. If a bug affects the software’s core functionality, vendor support may be quick to respond. But if it’s only affecting a niche use case that’s unique to your business, a fix risks becoming a low priority.

These constraints are very real, but vendor support always comes with unmatched expertise for brand-new product offerings.

Third-Party Support: A Customer-Centric Approach

An impactful third-party support service provides a more customer-focused model that deepens over the course of a longer-term relationship. As a third-party vendor works with your implementation of a software over time, they get to know not only any custom code you’re employing, but the ins-and-outs of how your business is actually using this technology.

This relationship also comes with much more flexibility: a third-party service provider can organically expand into project-based work as problems and opportunities are identified over the course of their support engagement.

Third-party support providers are generally much smaller, lower-overhead companies than enterprise application vendors. This structure comes with a few benefits for clients. As part of a smaller overall client base, a given client’s unique software needs are likely to be a high priority for the support provider. And with lower overhead comes a distinct cost competitiveness advantage over most vendor support options.

The much more flexible model afforded by third-party support comes with one major concern: whether the provider has sufficient expertise on the supported software. Unlike the software’s actual maker, there’s no guarantee that a third-party firm has the requisite knowledge, especially for niche enterprise software. In this context, verification is essential—third-party support providers must be vetted to ensure they have the right knowledge base.

A Support Option That Aligns with Your Application Management Strategy

Given the factors discussed above, this choice hinges on your enterprise’s overall application strategy.

If you don’t plan on customizing your software and predict a continued to need to license the latest version from the vendor, first-party support has a strong advantage. If you plan on customization, however, (a must for many industries) vendor support can be far too restrictive.

The balance of this decision often shifts over the course of a product’s lifecycle: as vendor expertise on a given application version dwindles, the cost and flexibility advantages of third-party support begin to present a distinct advantage.

In many cases, third-party providers will actually retain a stronger knowledge base on past software versions than the vendors themselves. For older or highly customized software, an organization can often receive better, more flexible support while spending less by working with the right third-party service firm.

If you’re ready to get your ERP refresh process started and could use the help of an expert team, we encourage you to reach out using the button below. 

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