Strong Supplier Management is key to any “Cloud first” strategy

“Suppliers, eh! Who’d have ’em?”

Well, we all have them. At home and at work. And the IT landscape has changed from the days when suppliers would be selling you hardware and software products. Today we live in a very service-oriented world.

I worked for IBM when Lou Gerstner was brought in from outside to head up the corporation. IBM were on the brink of selling off parts of the business because they were going into product battles with a myriad of specialised competitors. Microsoft, HP, Sun, Amdahl, EMC, … the list was huge. Each vulture pecking away at one of IBM’s product divisions.

 

Gerstner changed IBM’s strategy. His background (senior management at American Express and CEO of Nabisco) gave him a real customer perspective. He recognised that customers needed somebody who could knit all these disparate technologies together to deliver business systems. IBM’s Global Services division was born.

Now, everyone wants to be “Cloud first”. Every supplier has to offer “&aaS” – Software as a Service, Platform as a Service, Infrastructure as a Service, Security as a Service ….

Rumour has it that Greggs are about to launch a new offering called “Sausage Roll as a Service”.

Flippancy aside, there are definite advantages to Cloud adoption. But ask yourself who is left in the middle trying to manage the half dozen suppliers your business has become critically dependent upon?

The answer is you.

Supplier Management can be a big challenge with some vendors. Have you thought what your Critical Success Factors are going to be when managing your suppliers?

Solid Base. You will need a very strong foundation to the relationship and that will rely heavily on the terms and conditions you establish with each supplier. You may get little say in the matter – especially if you are a small organisation putting your life in the hands of the big boys. Whether you can influence the balance of responsibilities or not, you should absolutely make sure that you know exactly where the boundaries are. Don’t assume. Get it bottomed out.

The cloud-hosted costs might look attractive – but explore carefully. They probably appear low because you’re signing up to a low performance/service level, or you’re going to be left holding some responsibilities that you thought you were paying your supplier to take on.

Get close, but not too close. Suppliers like to talk about “partnership”. Whilst the word itself sounds a bit hammy, I do agree with the underlying sentiment. During my time at IBM I worked with some companies who treated IBM with respect and fairness. The working relationship was excellent and there was a lot of compromise and collaboration.

Equally, I worked with customers who just wanted to drive down price whilst still expecting oodles of free support (at the time it was referred to as “IBM added value”).  Then, when anything went wrong, they would turn on the supplier. Behaviours which drove the relationship to the wrong sections of the conflict grid – compete, accommodate, avoid. Usually compete.

My advice is to develop a close working and mutually respectful relationship with your suppliers but don’t get too close. That little bit of distance will be healthy when you have to be firm with them.

Purposeful Supplier Management Reviews. A regular service review should be baked into your calendar and it should have a clear and meaningful agenda. Appropriate metrics to assess the level of availability/reliability, support responsiveness (incident and problem resolution), and progress/plans/issues for any project related work.

The supplier might want to use it as an opportunity to present new product offerings. I’d recommend steering that to a separate meeting. Use the supplier review meeting to concentrate on how they are delivering service to you. It is more important that you get their attention on your long outstanding problems. If they’re delivering excellent service, they will earn the right to tell you about their new products.

So … take care as you step out into the Cloud, or when you engage with any of your suppliers. The more suppliers you have, the more you will have to coordinate and manage. It also increases the potential for each of them to point the finger at one of the others when your systems are down … leaving you in the middle again.

If you’re exploring how to improve how you manage your IT operation then please get in touch and tap into our IT management experience. You can also take a look at our other best practices blog articles which are full of hints and tips.

Brian Lancaster

brian@blmsconsulting.co.uk

07470 002019  /  0114 398 4344

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