How Good of a Customer Are You?

How Good of a Customer Are You?

Make sure to be chosen for best service delivery, as customer of choice

Your contracts are honored. Your governance is robust. But the value of being a customer of choice was never higher than it is now. When you are chosen, you get the best talent, you get invited to problem-solving on topics that will matter in the future, you co-steer supplier development and actively shape their abilities to continually and consistently perform for you. Complacency is a thing of the past. It makes business sense to engage.

Buyer Power and Increased Confidence

For years, service sourcing in large corporations has been about setting up and operating a process, specifying the rules of engagement and getting selected suppliers to adapt and comply. Efficient. Cost effective. Good governance. With increased service commoditization, buying power has consolidated and increased. Professionalization in Sourcing has contributed to gradual loss of influence from large service providers, who often need to invest significantly to win new and follow-on work, going through an increasing number of decision-makers and forums. Suppliers need to safeguard large contracts not only with stellar service performance but also by positioning themselves in a way that makes change appear difficult, effectively locking customers in.
Enter Covid-19…

Securing Supply Is Not the Same as Being Chosen

In a world of disruption, where long-held assumptions make way for new realities, how does your company stand in the eyes of your partners? With the business of handling the Covid-19 epidemic in your role, securing supply of services to your company, did you engage deeply enough in getting the perspective of your suppliers? Did and will they choose you?
You clearly thought hard about what the epidemic will mean for you; you identified new risks, were part of task-forces, worked on scenarios and took mitigating actions. Perhaps you discontinued activities, re-steered funding and priorities. You thought about your suppliers, their impact in your supply chain and their ability to service. More mitigation. Part of your job. But how deep did you go – did you think about how things are, for them? Did you go beyond the relationship level with your account manager and beyond the governance, at various levels, to find out how your organization stands with the supplier?

What Are Your Antennas

Established business language in sourcing relationships doesn’t necessarily give you a good gauge of your importance to your supplier. Mechanisms to pick up on major shifts in how suppliers operate their business, beyond individual contracts, exist, but seldom are they formalized. Seldom are they part of any regular governance item. Disclosure of supply-side changes is up to the sender. To disclose, changes must be perceived; do account managers know enough about their evolving corporate strategy adjustment, after this first quarter of the epidemic.

Benefits of Selection

Your contracts are honored. Your governance is robust. But the value of being a customer of choice was never higher than it is now. When you are chosen, you get the best talent, you get invited to problem-solving on topics that will matter in the future, you co-steer supplier development and actively shape their abilities to continually and consistently perform for you. Complacency is a thing of the past. It makes business sense to engage.

Own It

Benefits of an independent consultant for partner assessment and investment are plentiful. We are not bound by any need to sell services. We take your perspective. We have opinions and will state them, but tailor our solution to you, where you are at and what you want and need. We are trained and networked. We can help you connect with others. We can be your sounding board if you source services from a larger consultancy. 
My personal interest and expertise in vendor governance stems from my tremendous respect for money, to use it well and not to waste it. I’ve seen the negative impact on both the individual and the organization when contract management is neglected and people are reported to “fail” in their jobs because of slow decrease in attention. Building, owning and adapting a governance system takes some effort but it is an effort that pays off.

About the Author

I am a manager and business partner independently working for clients in the greater Zurich area and sometimes abroad. I have vast experience in service design, strategic sourcing, vendor governance and financial performance management. I am fascinated about well-functioning systems, with clear rules of engagement and respectful and interest-based collaboration and negotiation. I also thrive during change, and am deeply engaged in how business and life are changing, as this epidemic evolves.
My work includes business plans and business cases, outsourcing transactions, risk and financial frameworks and policies, and service transformation. I act as trusted advisor and leverage experiences gained in consulting (McKinsey, Accenture) and in industry (Zurich Insurance, UBS) in service delivery and capability building. A socially apt relationship-builder and confident communicator and negotiator, I interact with care and have a track record of achieving change. I energize from people, and care about both organizational performance and people’s health. Check out meine Arbeit at https://www.engstromer.com.

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