Do you have favorite vendors, ones you would gladly work with again and again? What is it that sets them apart?
Chances are it isn't price. Yes, the best vendors provide their goods and services at reasonable prices, but the vendor relationships that stand out in my mind weren't with the lowest bidders. There's much more to it than that.
My team and I have thought a good deal about what makes for the best vendor relationships, and we've concluded that the best vendors are partners that become part of our strategy and are proud to be associated with our organization. Organizations can work enthusiastically with such strategic partners to devise innovative ways to achieve one another's objectives. The two partners share a linked destiny.
On the other side of the coin are vendors that don't meet expectations. Their costs exceed estimates, or their incompetence causes the project to fail. How can we ensure that we avoid such vendor relationships? I think that understanding what we want from our vendors from the outset increases the odds of obtaining outcomes that meet our expectations.
My team has come up with a list of 10 things we should want from our vendors:
Our vendors should be experts in all facets of the hardware, software, and professional services they provide. They should have knowledge of best practices within the industry, and they should be able to leverage those best practices to provide us with breakthrough strategies. They should also be able to offer proactive guidance on how to leverage technology within our industry vertical.
You get what you pay for, of course, but you also get no more than you demand. This is especially true when it comes to the quality of the goods and services we receive from our vendors. We must demand that vendors consistently provide evidence that they are providing goods and services of the quality that they promised to deliver. That will reduce the defects in the products delivered, and services will more often be completely right the first time, without delay. In turn, this helps ensure that our projects will be completed on time and within budget. We can manage our vendors' quality through key performance indicators (KPI) and service-level agreements (SLA).
3. Innovative/Breakthrough Relationship
We met with a vendor's representatives to discuss how we could reduce our speed to market and the amount of paper being passed between our two organizations. They suggested that we switch to a single blanket purchase order instead of using a separate one for each order. This simple change let us restructure our internal process and reduce the on-site head count by 70%, without degradation of service. What was in it for the vendor? A stronger relationship and a contract extension.
Sign up for CIO Asia eNewsletters.