Cybersecurity Vendor Rationalization

I felt trepidation as I walked into the company cafeteria to meet the Six Sigma Black Belt. She was known as a no-nonsense expert who was charged with reducing waste and defects in our joint manufacturing process.   

I worked in the integration division of a global logistics firm, and I had been entrusted to turn around an underperforming team.   We were building embedded computing solutions that were tightly integrated into the global supply chain for GE HealthCare.  I had been cramming books by the gurus, Drs. Demming and Juron, in the prior weeks and hoped we could broaden the discussion to quality. The Black Belt had other ideas.  She reached out to shake my hand and opened with, “Hi, it’s nice to meet you in person.  We have a goal to cut our supply chain vendors by 35% and you are about to be downgraded to our lowest category.  This means we are looking to wind down active contracts and not award your firm more business. Would you like some coffee?”  Yikes.  
 
Ultimately, we turned our relationship around and moved ourselves to the top supplier category.  Through the process I learned a lot about ROWC (Return on Working Capital) in real life, quality control mechanisms, enterprise risk management {one of our shared facilities was destroyed in a tragic tsunami), and vendor consolidation. 

Executive Summary 

The cybersecurity industry's vendor proliferation exceeds 3,900 companies, per Richard Stiennon, author of Security Yearbook.  This proliferation creates operational inefficiencies that extend beyond simple procurement challenges, encompassing integration complexity, skill dilution, and strategic misalignment that collectively undermine security effectiveness. These challenges have been previously addressed by established Fortune 500 companies including GE, Boeing, Toyota, IBM, The Gap, Microsoft, and Lockheed Martin.  The convergence of these enterprise experiences provides a blueprint for cybersecurity vendor rationalization that transcends tactical procurement optimization. This research shows that we can leverage proven frameworks and transfer methodologies to cybersecurity vendor management. 

Key Findings: 

• Enterprise vendor consolidation follows predictable maturity patterns adaptable to cybersecurity
• Strategic vendor portfolio management reduces complexity while enhancing performance
• Governance frameworks enable scalable vendor relationship management
• Risk-based vendor categorization optimizes resource allocation and oversight

The cybersecurity domain presents unique vendor management challenges that distinguish it from traditional procurement categories. Security tool integration complexity requires specialized technical expertise and architectural planning. Compliance requirements demand continuous vendor assessment and risk monitoring. Threat landscape evolution necessitates agile vendor relationship management that balances stability with innovation. 

The reality is that most enterprises have a mix of platform vendors (Cisco, Crowdstrike, Palo Alto Networks, Azure, AWS) as well as highly technical narrower products in categories such as IAM, email security, or vulnerability management.  Recent research from IBM and Palo Alto Networks indicates that, of the surveyed customers, they are managing 83 different security solutions from 29 different vendors. This makes the need for vendor rationalization a clear priority when building budgets for 2026.  
 
But wait, there’s more. In addition to those three areas that TCO misses we should consider switch cost. In social psychology, the concept of switch cost refers to the mental tax paid whenever attention shifts between tasks. Even minor context switches degrade accuracy and speed as working memory reloads the relevant context; repeated switching compounds into measurable performance losses across teams. 
 
In software engineering, this is vividly demonstrated: developers who are interrupted or who switch tools lose significant productivity as they struggle to regain flow. One peer‑reviewed study of developer task interruptions found that even self‑initiated interruptions impose a meaningful burden on efficiency (see arXiv study on task interruptions). The lesson is that context reloading is costly for technical professionals across disciplines. 
 
For cybersecurity, these principles apply far beyond the Security Operations Center (SOC). While SOC analysts concentrate on Respond and Recover functions, the broader NIST CSF 2.0 framework highlights the roles of Identity, Architecture, Engineering, and Risk teams in Govern, Identify, and Protect. Identity teams juggle IAM tools; architects and engineers balance overlapping cloud and platform controls; governance teams manage vendor risk and compliance. Each additional vendor interface adds another layer of context that requires mental switching, diluting focus and slowing execution. 
 
Evidence supports this expanded view. Recent industry reporting as indicated above shows that many organizations operate multi‑vendor ecosystems, and a large share of security and IT teams report they have reduced efficiency due to tool and context switching. This inefficiency is not confined to the end of the workflow; it touches the entire cybersecurity lifecycle, from risk assessments and identity provisioning to monitoring, incident handling, and recovery. 

Current State 

For executives, the implication is clear: vendor rationalization must be evaluated not only through financial and technical lenses, but also through the lens of cognitive load. 

Using a Total Cost of Ownership (TCO) approach is useful and should be pursued in partnership with your Finance team, but because it focuses only on costs (direct and indirect) it misses the nuances of integration, ease of deployment, and strategic value. 

Complimenting TCO approaches we have great tools like Sounil Yu’s CDM (Cyber Defense Matrix) for logically organizing your security vendor portfolio and the OWASP TaSM (Threat and Safeguard Matrix) to map your threats relative to the NIST CSF (Cyber Security Framework).  Our goal is to combine the value of several of these into a single tool. 

Is it possible to quickly map cost, technical value, switch cost, and business implications?  Let’s go back to the 1980s when vendor consolidation began.  

Future State 

The Kraljic Portfolio Matrix (KPM), introduced in Harvard Business Review by Peter Kraljic in 1983, is one of the most widely adopted frameworks in procurement and supply chain management. Its central premise is that organizations should not treat all suppliers equally: some represent routine commodities, while others are strategic partners whose failure or loss could materially impact the business. By mapping suppliers along two dimensions, supply risk/complexity and business impact, executives can classify vendors into four quadrants (Non-Critical, Leverage, Bottleneck, and Strategic) and define tailored management strategies for each. Over the last four decades, this model has become a global standard for supplier segmentation, taught in executive programs, embedded in procurement certifications (e.g., Chartered Institute of Procurement & Supply), and validated in both academic studies and Fortune 500 practices (Kraljic, 1983; Gelderman & Van Weele, 2003). 
 
In practice, KPM has been successfully applied across manufacturing, automotive, aerospace, and pharmaceuticals to rationalize complex supplier bases, negotiate more effectively, and reduce total cost of ownership. More recently, Big 3 consultancies and academic researchers have extended the model with data-driven methods, demonstrating measurable results: for example, a BCG program increased e-bidding from 20% to 65%, cut negotiation time by 30%, and reduced spend by ~5% (BCG, 2018). Academic work confirms its utility for both products and services, including IT and cloud, by providing structured, repeatable criteria for supplier evaluation and risk mitigation (Padhi et al., 2012; Ye, 2021). For CISOs grappling with vendor sprawl and integration risk, KPM offers a proven, research-backed method to align cybersecurity vendor management with enterprise procurement best practices. 

How to Use the Kraljic Portfolio Matrix (KPM) in Cybersecurity 

1) Rationalize Your Current Vendor Portfolio 

The first step in applying the Kraljic Portfolio Matrix to vendor rationalization is to create a comprehensive inventory of your security vendors. Each vendor should be mapped to the NIST CSF or CIS controls they support, which ensures that the portfolio is being assessed against widely recognized standards. Alongside this mapping, data must be gathered for the two primary KPM axes: supply risk and business impact. On the supply risk side, this includes factors such as single-source dependence, switching costs, integration effort, and the vendor’s financial stability. On the business impact side, relevant measures include the vendor’s criticality to ongoing operations, the breadth of control coverage, and the degree of measurable risk reduction provided. 

Once the inventory is complete, the next step is to assign scores and normalize them so that each vendor can be placed within the matrix. This is typically done using 1–5 scales for each criterion, with objective data points wherever possible. For example, a vendor’s financial health may be reflected through an Altman Z-score, while the ease of substitution can be measured by the number of viable competitors. Even integration effort can be quantified through documented full-time equivalent (FTE) hours required to deploy and maintain the product. 

With the scoring complete, the organization can begin to interpret the results quadrant by quadrant. Vendors that fall into the Non-Critical category are typically good candidates for consolidation, where standardization and volume pricing can drive efficiencies. Leverage vendors, which have high business impact but many alternatives, represent opportunities for competitive sourcing, aggressive negotiation, and simplified integration. Bottleneck vendors, in contrast, pose relatively low impact but carry high supply risk; these should be carefully managed by reducing dependence, identifying substitutes, and preparing exit strategies. Finally, Strategic vendors—those with both high impact and higher risk—demand closer partnerships, more robust service agreements, co-innovation opportunities, and, where feasible, dual sourcing to mitigate dependency.  If dual-sourcing is impractical, consider documenting a second source (direct, alliance, partner) for that specific security vendor.  

The final stage of rationalization is execution. Here, CISOs should focus first on eliminating redundancy in the Non-Critical and Leverage quadrants, which can yield quick wins. Bottleneck vendors should be actively monitored and mitigated, while Strategic partners should be managed through longer-term, carefully governed relationships. Taken together, this process transforms a sprawling vendor ecosystem into a rationalized portfolio that is both leaner and more strategically aligned. 

2) Create a Quantitative Process for Selecting New Vendors 

While rationalization focuses on managing the current portfolio, organizations also need a disciplined way to evaluate new vendors. This requires a quantitative scoring process aligned to the KPM axes. One effective approach uses a weighted model where business impact accounts for 40 percent of the overall score, supply risk for 10 percent, integration complexity for 20 percent, cost efficiency for 20 percent, and innovation value for the remaining 10 percent. Business impact should capture the extent of NIST CSF or CIS control coverage, risk reduction potential, and dependence on mission-critical assets. Supply risk reflects the vendor’s financial health, the number of available alternatives, and compliance posture. Integration complexity considers how easily the product fits within the existing stack, whether the enterprise already owns complementary products from the same vendor, and the ease of ongoing management. Cost efficiency accounts for the true five-year total cost of ownership, encompassing licensing, integration, training, and operations. Finally, innovation value measures alignment with the enterprise roadmap, support for automation, and cloud-native maturity. 

Each candidate vendor can be scored from one to five across these categories. The weighted scores are then combined into a composite, which places the vendor in the appropriate KPM quadrant. Once positioned, decision rules can be applied to guide adoption. Vendors in the Non-Critical quadrant should only be chosen if they clearly outperform competitors on cost or performance. Leverage vendors should be selected for their favorable terms and ease of integration, while Strategic vendors must be carefully governed with strong agreements to avoid lock-in. Bottleneck vendors, by contrast, should be entered into only when necessary and always with an explicit exit plan. By following this structured evaluation process, CISOs can ensure that new vendors are introduced deliberately, in a way that complements rationalization efforts rather than undermining them. 

co-created with OpenAI

This article demonstrates that cybersecurity vendor rationalization is not a procurement exercise; it is an executive decision that directly impacts risk posture, financial efficiency, and workforce productivity. By applying proven tools like the Kraljic Portfolio Matrix alongside modern frameworks such as CDM and OWASP TaSM, organizations can move beyond ad hoc cost cutting to a disciplined portfolio strategy. The combination of TCO analysis, integration complexity, and cognitive load provides leaders with a holistic lens for decision-making. Enterprises that embrace this approach will reduce vendor sprawl, strengthen resilience, and achieve measurable improvements in both security outcomes and operational efficiency. In short, rationalization is a governance imperative that aligns cybersecurity with enterprise strategy. 

References 

• Kraljic, P. (1983). “Purchasing Must Become Supply Management,” Harvard Business Review — the original model and four‑quadrant strategy guidance.
• BCG (2018). “Jump‑Starting the Digital Procurement Journey”
• MIT CTL Thesis (2024). “Buying Channels Strategy — Advanced data analytics for procurement efficiency” 
• Ye (2021), Journal of Supply Chain & Operations Management 
• Padhi et al. (2012), Journal of Purchasing & Supply Management 
• Gelderman & van Weele (2002/2003) — Case studies and measurement guidance for purchasing portfolio models; practical nuances for moving items across quadrants as markets change.