Utility Infrastructure to Improve Quality of Life

What characteristics define a key supplier?

While making a list of key providers of technology solutions in our environment, we are interested in how the technology aids in business delivery, potential overlap of services, underutilized solutions, and supplier involvement. A relationship characteristic we find unappealing is a supplier we only hear from during renewals. Unfortunately, in our experience, this is the case for most providers in the technology space. They make a sale, earn their quota, and disappear until the renewal next year.

The suppliers that know about our technology environment, business processes, compliance regulations, and industry are the ones that make the strategic partner list. Why? Because they care about how their solution is used in our environment. They continuously probe for new applications of their services. They ask questions. They help find resolutions to problems. As with our personal relationships, this takes work. It requires intentional actions, follow-up, and patience.

Everyone says this but how many really do it?

I like how the Toyota Way states this in Principle 11 - Respect your extended network of partners and suppliers by challenging them and helping them improve.

Most business professionals would not argue against the premise of this principle. But how many of us live the words? The big idea here is to raise the expectations for suppliers by challenging them to be better providers. It is a form of respect, because you are inviting the supplier to journey with you. The supplier must recognize challenges as opportunities to get better and see the linkage to their overall success as well.

But it takes two. This isn’t a one-sided relationship. It means the buyer participates by sharing details and asking for solutions. The buyer seeks a fair price but prioritizes partnership and value-add over the lowest cost. The buyer makes time to strengthen the relationship with an eye towards maximizing the value of both the solution provided and the overall relationship.

One way we do this with strategic suppliers is to share our technology roadmap with them. Using the roadmap helps the provider see how their solution is used in our environment and starts discussions on how it could be better used. It could potentially provide input to their product marketing teams for future enhancements that may be marketable in their software. The map gives their sales team a clue as to when we may need additional licenses. Basically, the roadmap becomes the document that drives engagement and partnership.

We fired a couple of suppliers this year.

We fired a couple of suppliers this year because they weren’t living up to the standard we expect. When we gave notice of service discontinuation, the account representatives didn’t reach out to me to discuss. This lack of action proved my point about their overall approach to selling their service. The only interactions we had with them were approving invoices they sent.

We have regular contact with some other suppliers. We talk about how to better leverage what our company has already purchased, how their solution could solve more of our challenges, and how to solve new business problems. We improve when they improve and vice versa. When this happens, the conversation changes from a list of software features into how the solution the supplier provides strengthens business process flows. It gives weight to the phrase ‘win-win’.

Therefore, what makes the best supplier relationships special? Learning and growing together, and challenging each other. This is how you give and receive respect.