Thursday, 15 March 2012

Value Added Relationships with Suppliers

Next up is a session on Supplier Relationships, Creating Value. A couple of good friends and colleagues, both IT Directors in Universities, presenting.

They interviewed a number of HE IT directors and suppliers to get there views around two key themes, Value and Relationship.
Definition of value has a couple of definitions. Cost, or Quality.

Interesting divergence of views from HEIs and suppliers. Everyone recognised need for good relationships based on trust and sharing of strategic aims. But, neither side felt that we had those relationships in place.

An Ideal relationship would be based on trust and working together, long term, constructive challenges, healthy relationship. Not one size fits all. Needs to be an understanding of goals. Suppliers often feel as though they're being asked to provide a point solution without being asked about the bigger picture, which they could probably help with. We should be looking at partnerships where we define the relationships with our suppliers as to how they help us reach our strategic objectives in either teaching and learning or research.

At the moment there is a mixture of relationships in place, ranging from confrontational, not strategic, sometimes there's no contact unless pain is felt by either side. So, the ideal relationship tends not to exist today.

Biggest issue in supplier relationship management identified by HEIs was around procurement and the lack of understanding of financial constraints we as a sector are under. We also focus on lowest cost rather than best value. Theres also a lack of trust. They don't communicate plans to us,and we don't tell them ours.

The suppliers identified an issue around procurement offices adding cost and conflict. Their overall view is that we have a culture of buying things based on price. They say they can help us add value, but we don't ask.

In summary:
A range of relationships exist today.
The need for change is recognised by both HEIs and suppliers
There's an acceptance that there is a different way to create more value through better relationships
A willingness to change does exist
Clear link between quality of relationship and sustainable value creation
Key factor is "people". It's all about people.

- Posted using BlogPress from my iPad

1 comment:

Peter A said...

This is interesting and I concur with these points.
Procurement doesn't help when it constantly asks us to look for other suppliers than the one we're already building a relationship with.
eg we're building a potentially very productive relationship with our scan/retrieve supplier, but still have to tender for their services.