Winning Strategies for Vendor Engagement

By far the best presentation that I attended at the 5thAnnual International Symposium on Supply Chain Management was Jon Hansen‘s presentation on Winning Strategies for Vendor Engagement, part of his Chaning Face of Procurement Series.

Even though there was nothing revolutionary in his talk, Jon did a great job of hitting home on the core message, spelling out the basics, simplifying the core messages which a lot of people focussed on new e-Procurement and e-Sourcing efforts still overlook, and delivering a presentation the way a presentation should be delivered. Simply put, the key to success still ultimately lies with your vendors, and if they don’t participate, or participate 100%, you’re going to lose out in the end. Basically, unless managed properly, your e-Procurement initiative, instead of being a benefit, could be a threat to your supply base. And this is not just theory – it’s fact. Consider a recent statistic from the Wall Street Journal (in February, 2005) which noted that 73% of all implementations result in partial or total failure.

It’s not hard to win suppliers over – often all you have to do is meet their needs and take the time to work with them to explain why the new system is better and why they won or lost the bid. Basically, suppliers are looking at (most at) six factors when being asked to use a new technology:

  • Ease of use
  • Non-invasive technology
  • Convenience and speed
  • Business Intelligence
  • Chance to maintain or increase revenue
  • Non-adversarial environment

Meeting these factors is not hard to do. For example:

  • Ease of use
    • Use technologies not limited to largest / most sophisticated suppliers
    • Communicate the initiative via multiple avenues of communication
    • Proper tool alignment
  • Non-invasive technology
    • Does not increase work
    • Increases opportunities
    • Reduces the cost of sale
  • Convenience and speed
    • Automated and intelligent engagement
    • Minimal Administrative Requirements
  • Business Intelligence
    • Proper spend alignment
    • Real-time reporting capabilities
    • Orientation sessions
    • Project and quarterly Reviews
  • Chance to maintain or increase revenue
    • Create an equal opportunity environment
    • Greater opportunity
  • Non-adversarial environment
    • Fair competition with clearly defined rules
    • Proper spend alignment
    • Proper technological alignment

Basically, vendors are the key to your success and will want to help you succeed if you take the time to help them succeed. It’s not hard. Just do it.