Supplier relationships need marriage-like effort

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Supplier relationships need marriage-like effort

John Riley

Supplier relationships need as much effort as a marriage, Margaret Smith, chief executive of user group CIO-Connect told the National Computer Centre Conference.

Addressing the issue of improving supplier/user relations, Smith said, "First you have the honeymoon period, then a tough first year, and unless each side talks about issues it will fail."

However, Smith had little faith in the idea of user/supplier partnerships. "I rarely talk about partnerships," she said. "I don't believe you do have a partnership."

Smith said users should think in terms of relationships. "Whether it is a vendor or a supplier relationship, we must treat it with respect," she said. "But your objectives and those of your vendor will be different and it is imperative to know how they differ."

Smith made a distinction between a vendor - a company trying to sell you a product or service - from a supplier, which is already supplying a service or product but may be trying to convince you to make additional purchases, or extend or renew a contract.

Smith said shared risk produced the right behaviours, and placed strong reliance on effective contractual arrangements.

She warned that the days of informal agreements were over. "I don't do informal any more," she said. "It always comes back to bite you."

She also urged users to encourage their IT staff to communicate with both their suppliers and their vendors. "Force your guys to get your vendors to understand your business, as you can use their brains to help you."

John Higgins, director general of suppliers organisation Intellect, told the conference his members preferred to think in terms of partnerships. "In mission-critical projects both suppliers and users are nearly always sharing risk and reward, although suppliers of widgets have a different relationship," he said. He added that Intellect is working with the Office of Government Commerce on creating partnering guidelines.

 

Where IT goes wrong

Users

  • Information management issues are not understood by the business
  • IT is viewed as a commodity with a focus on cost
  • The business often makes unreasonable demands
  • Performance of IT is measured by cost or time and not contribution
  • End-user training is not taken seriously.

Suppliers

  • Sales are driven by a need for revenue
  • They have solutions seeking problems
  • They sell with the A-team and deliver with the B-team
  • Culture of managing the client through the contract.

Source: NCC


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