One IT Vendor vs. Multiple Vendors: Which Strategy Works Best?

Starting a new software project comes with a lot of decision-making. If you’re looking to work with external IT vendors, one of the first decisions you need to make is whether you want a single vendor or multiple teams. It’s not only a management decision, because it affects all the important aspects like communication, project flow, and the quality of the delivered product.

Choosing to work with one software vendor can make things a lot simpler: one codebase, one roadmap, one point of contact. But collaborating with multiple vendors can bring more flexibility and a bigger variety of skills.

However, multiple vendors require extra coordination from your part.

In today’s article, we’re going to compare these two options to help you make a decision that actually fits your project.

What Each Strategy Means

a. One IT Vendor

As the name suggests, working with a single IT vendor means that one team owns the project end-to-end. This team handles everything from architecture and development to QA and deployment. The advantage is quite obvious: there is only one point of contact, one process followed by everyone on the team. This leaves less room for delays or misunderstandings. For example, if a bug pops up, you don’t have to spend hours chasing down who’s responsible; the vendor owns it.

b. Multiple Vendors

With multiple vendors, multiple different teams handle different parts of your project. For example, in many cases, the front-end is handled by one vendor, the back-end by another, and QA by a third. The biggest advantage of working with multiple teams is that you can get specialized skills and expertise for each layer. But coordination becomes a project of its own, meaning APIs need to match, timelines need to sync, and you will likely need someone, like a project manager, who keeps everything and everyone aligned.

The Case for One IT Vendor

Working with one IT vendor is a lot like having your own internal development team, just located somewhere else. Many businesses opt for working with a single software vendor through IT outsourcing. You will get people who know your product, understand your tech stack, and remember why decisions were made months ago. This continuity matters more than most people think.

Communication is simpler and easier with one IT vendor, too. You don’t need to wait around for updates from three different PMs or to align schedules and time zones with multiple teams. You talk to one team, and that team handles everything.

When working with a single software vendor, quality tends to stay consistent. One team builds, reviews, and tests the code, and that makes things smoother and keeps the quality consistent. Not to mention, when you need to scale or refactor, your team will already know where the bodies are buried, aka the stuff that isn’t obvious to someone new.

The best part, though, is the long-term relationship. Over time, your software team becomes more than just simple vendors working on your product. They will anticipate what you’ll need next, or they will even suggest improvements or new features. That kind of partnership is hard to build when you keep switching teams.

The Case for Multiple Vendors

In certain scenarios, splitting the work across multiple software teams makes more sense. For example, let’s say your existing team is great at web apps, but you need a mobile version built fast, or someone who’s an expert in cloud architecture. In this case, you can get the best of both worlds with your existing team working in your web app, while outsourcing the mobile version to another vendor, giving you the freedom to choose the exact skill set you need for the project.

The multiple vendor solution comes with more flexibility, also. If, let’s say, one team is busy and the project slows down, you can change priorities without waiting for the other team to free up resources. You can test out collaborations with different teams before committing long-term.

The multiple-vendor solution needs more coordination, though. Each vendor has their own processes, and different preferences in tech stack, and definition of “done”. It’s not impossible to align everyone; it just takes more time to make sure things integrate well.

Still, for big companies with complex projects that need very specific skills, the multi-vendor setup can work very well and could be worth the extra coordination.

Factors to Consider When Choosing

There is no universal answer here, because what could work for a startup of five people won’t work for an enterprise running multiple projects. Think about what your business can handle internally and the collaboration you want.

Project complexity

If your project requires close collaboration and has lots of moving parts that need to talk to each other, a single vendor will make your life easier. But if it’s modular, like separate tools or microservices, going with multiple vendors might work better.

Management overhead

More vendors mean more meetings, reports, and follow-ups. If you don’t have someone technical to keep an eye on things like integrations and timelines, things can easily slip.

Tech stack and standards

When one team owns the codebase, everyone is on the same page from the start, so consistency is almost automatic. With multiple software vendors, you will need well-defined guidelines to keep things from drifting apart.

Budget and timelines

Sometimes you don’t choose the option you want; you choose the one that is possible based on your budget, deadlines, or availability. Basically, you go with the option that fits the situation better, not what sounds ideal on paper.

So… What’s the Better Strategy?

The decision mostly depends on what you’re building and how much control you want over it. Consider also your resources when it comes to IT vendor management. Going with only one vendor is a safer choice if your product is growing fast and you don’t have the bandwidth to handle multiple teams/vendors. It’s less overhead and better consistency this way.

But if you’re working on something large, and most parts of the project don’t overlap much, think separate apps, modules, and services - the multiple-vendor solution can work just fine. Just make sure you’re ready for the extra coordination that comes with it.

To decide, really think about what your business and internal team can handle and go from there. Managing different vendors takes a lot of time, communication, and technical direction. You need to have someone who’s responsible for keeping all these pieces together; otherwise, it doesn’t matter how good the vendors are, things will slip.

Companies often start with one software vendor at the beginning of the project, and later on, if necessary, they expand and add more people or teams. That is a more balanced approach in which you can experiment with one team first while still keeping the option open to bring in more vendors later. 
 

Conclusion

Choosing between one IT vendor and multiple vendors is often based on what’s practical rather than what you like. Things like budget, timeline, and internal resources limit your options.

Working with just one company makes planning easier: one contact, one project manager, one schedule. You usually have better control over the budget and delivery dates.

When you choose to collaborate with several IT vendors, you can access the exact skills you need for your project, but you will spend more time managing communication and aligning timelines.

The best setup is the one that keeps your project on track and your team in sync.