Supplier Paradox

Article first published 2nd August 2017

One of the more unusual elements of working as a contractor can be when you support the recruitment process for your replacement. On this occasion I was assisting with the recruitment of an IT Supplier Manager and part of the client brief was to develop and agree the competency questions with the hiring manager. When conducting the interviews I suddenly thought “if it was me sat there, how would I answer?” Well below is my likely reply to one of the questions.

What is your view of managing a supplier as a partnership or transactional?

Cold silence… a few seconds to think, then engage brain before mouth? maybe? or should I just say what I think?

Transactional is certainly the favored response when answering this question. Whether that is an interview standpoint (saying what you think the interviewer wants to hear) or where the majority sit, I am not sure. My gut feel with watching the body language make me think its the former but here goes…

“My initial answer would always be transactional, I know it is common to think about large IT suppliers as a partnership but I always believe this is the end game and not the starting point. Regardless of how much a relationship has been formed whilst striking the deal, you only really know how it is going to work out once the services start to be delivered and you have the first two or three service reviews under your belt”

Right, opening statement down, now I have to explain why I have probably gone against convention…

“For me the transactional phase of the relatiohship, certainly at the start, establishes a clear boundary between the delivery of BAU service (to the required service level and contract expectations) and the opportunity to introduce new revenue (for the supplier) and improvements to the customer through the introduction of new services. The problem is, if you start with a partnership from the start, small service misses can quickly get over looked as all parties do not want to run the risk of damaging the partnership. For me it is important that the customer is able to enforce its position as the customer and the supplier firmy knows its starting place and what is expected in terms of delivery.”

Thats got that over with. Probably worth talking about the longer term plan now…

“It is likely that a key supplier has been bought in with the Exec mindset of them being a partner. Don’t get me wrong, I am not against partnerships and if I had to put a figure on it, for a 5 year term I would expect that change of mindset to kick in at around month 6 of good solid delivery. At that point in time the succesful run rate of service delivery should have been established and the key personalities should be comfortable working together. I would then entertain a change of approach and mindset toward a more collaborative and partner driven service relationship, but that has to be maintained with the bias being on the supplier to deliver not just the add value element but maintain the BAU.”

Should I say the next bit? hmmm, yep OK then…

“But it is important to remember that a partnership can move back to transactional. If that happens it genuinely would be a sad day and the internal vendor management has to carry some culpability should that happen. Ultimately the right to be treated as a partner has to be earnt by the supplier and then the protection of that supplier as a partner sits with the vendor management team.”

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