Sourcing and Developing Partnerships

We all have our favorite words of wisdom that help motivate and inspire us to push forward in business, especially in times of difficulty.

Failure to Plan

If you fail to plan, you may as well plan to fail.

The world changes constantly, and so does business. The only thing that remains the same is your innate abilities.

Running a successful sourcing process for high value services like outsourced customer service is a complex undertaking.

The process extends from building and running a request for proposal competition, through delicate negotiations, and right down to crafting the service level agreement.

 The Role of Procurement

How would you describe the role of procurement in an increasingly complex business landscape?

The thing about sourcing and supply chain is that you usually don’t hear much about it unless something goes wrong. They are the unsung heroes of the battle, making sure everything’s in place so that people on the front lines can take care of their everyday job. The sourcing and supply chain teams are the behind-the-scenes people making everything hum. 

The core role of sourcing is to facilitate what the stakeholder is looking for, finding services and products on behalf of internal customers so they get what they want and need for the best value.

What are the table stakes, the trends, the market research, the vocabulary?

If sourcing isn’t an expert in the industry before they go to RFP ( request for Proposal ) and the contract isn’t clear as a result, there will definitely be issues that come up later. The framework of a successful partnership is the RFP, and the subsequent contract is what sets the tone.

Partnerships

More and more, organizations are looking for partners rather than vendors. As a sourcing professional, how do you bring the intangible idea of “strategic partnership” into the very objective procurement process?

Because a “strategic partnership” is such an intangible concept, it can be tempting to go with your instincts or blindly trust a network referral.

But the sourcing process needs something more objective than that to prove to stakeholders that this will be a c partnership. Thus, the RFP is essential. It’s a tool that can accurately represent stakeholder requirements and consistently evaluate vendor responses. 

Of course, the RFP is just the first step. Evaluating the potential of a partnership takes more than just paper responses to the RFP, but also face-to-face meetings and collaboration with the vendor team.

It’s important to assess how they differentiate themselves from their peers and what their added value is in an otherwise commoditized industry. Although a large part of the buyer decision will be based on technical and cost factors, you want to look for a partner that will continue to bring future value. 

In these meetings, the supplier should be eager to approach any issues, seeking out the root cause and taking corrective action, all in the interest of making the partnership more effective.

On the other hand, a vendor that is concerned only with meeting industry standards and parameters is not a partner who will be able to take a commoditized service and differentiate themselves or collaborate with their clients to make things work. 

Cultural Alignment

How much of a factor is the alignment of cultures in your decision-making process for professional services?

As a sourcing professional, I have to ensure that our company culture is reflected in the RFP (request for proposal ) and also that the document is customized to the specific industry in which we’re sourcing. It’s my expectation that the RFP is flavored with our history, our mission and our values.

 If we don’t express these upfront, we can’t expect the vendor community to know if and how to align their own values. If they don’t care about our mission, or if their own values are misaligned with ours, then we know to walk away. 

Aligning cultures in the decision-making process is also crucial because the process is about more than the one person running the RFP and conducting the sourcing.

It’s about the people we bring to the table and the people the vendor brings to the table connecting. Let’s make sure our stakeholders and our senior leadership have a strong connection with this partner.

 When these teams meet, is there a tendency towards innovation, talk of collaboration? It’s a two-way street. We need to know that we’ll do an amazing job together. That takes careful cultural and organizational alignment, and if it’s missing, we have to know at what point to withdraw.

Best Total Value

Return on investment is crucial, but its measurement isn’t always tangible. What factors should be acknowledged in creating a partnership that enables the best total value?

The essential thing to recognize in sourcing is that partnering with a supplier isn’t just about buying for today but also for the future. The best total value is found when a partner does the work to help you take your business to the next level.

Yes, ROI is found in tangible dollars, but we’re also talking about factors such as:

customer satisfaction,

innovation,

process improvement and more.

You need a partner that understands current and future trends in the industry and how they can walk with you on that journey as the space evolves. 

We should be able to have safe and open discussions with a partner about our pain points and issues and how we can work to solve those together.

In short, the best total value is achieved when you’re not simply relying on the contract. The contract sets the framework for the day-to-day management, but you have to go beyond it to take the partnership to the next level.

Essentially, the best total value is possible when the supplier and the client think together as if they are one company.  

Long-Term Partnerships

A superior sourcing process is future-oriented. How do you define or envision a successful long-term relationship with a third party partner, particularly when it comes time to potentially renewing a contract?

A successful long-term supplier relationship is one in which there is mutual effort every step of the way to make each other better. I like to envision this ongoing relationship as if the two partners were climbing a mountain – picture Mount Everest or Kilimanjaro.

 At the bottom of the mountain, there’s no commitment between supplier and buyer; there are no contracts, agreements, pricing or anything.

 The only interaction so far is the RFP. As the two hike together, they reach the first level, which is a contract, under which there is secure pricing and ongoing transactions. It’s pretty basic, but at the next level up is where there’s skin in the game: there’s Service Level Agreements, and the supplier understands that they must fulfill their commitment or risk the relationship. 

The next level is where it starts to get interesting.

Now both partners are able to walk in each other’s shoes on this mountain climb.

There’s joint process improvement, with both sides working to make the relationship better on a day-to-day basis.

Climbing higher still, they reach the level of real innovation.

In the contact center, this is when both partners are focused on navigating the customer experience with an innovative approach to improving customer satisfaction.

Whether it’s through call center technology or customer journey mapping, they are aiming to wow the customer and build a seamless experience.

 Ideally, the customer won’t even recognize that the company’s customer service is outsourced to a contact center. That’s how closely the two partners have aligned themselves at this level.

The final level is value chain optimization.

Both partners work towards a comprehensive understanding of cost savings, quality improvements, efficiencies, risk mitigation, service improvement, and more.

 They’re asking the questions, how can they be a better supplier, and how can I be a better client? There is a joint commitment to mutually grow their businesses through the partnership. 

To avoid criticism, do nothing, say nothing, and be nothing.

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