Are Your Suppliers Happy?

Cartoon showing conflict between supplier and buyer. Buyer "Just do it!". Supplier "Wow, they're 6 months behind on their invoices & now they want a favour"It is common for organisations to set a range of Critical Success Factors (CSFs) and Key Performance Indicators (KPIs) which are used to ensure that progress is being made towards the appropriate strategic objectives.  Often a ‘balanced business scorecard’ is created, to ensure that different aspects of organisational success are considered—with the classic scorecard considering Finance, Customer, Internal Business Process and Learning & Growth (or innovation).   It is crucial that organisations ensure that their CSFs and KPIs are well defined and well balanced.  Measuring the wrong thing often leads to unexpected outcomes and behaviours.

 

The balanced business scorecard can be used at a project level too, in order to define the required business outcomes that the project is driving for.   This can be a powerful tool to validate that there is clear alignment with the overall organisational strategy and direction.  It also ensures that everyone is on the ‘same page’ with regards to why the project is being initiated in the first place.

 

However—whilst organisations (quite rightly) focus on measuring success in terms of financial outcomes, customer satisfaction, employee engagement, innovation and so forth—we rarely discuss supplier satisfaction.  Yet this, when considered alongside a range of other measures and metrics,  can be an extremely illuminating metric that can help drive holistic business improvement.

 

Considering The Whole Ecosystem 

Even the smallest of organisations will have a range of suppliers, and large multinational companies will have many, many more.   When a project initiates a change to a system or process, this can have a direct impact on a supplier.   Imagine a Financial Services company that utilises a third-party (outsourced) call centre.   Even the smallest of changes to a process or system will directly affect the outsourced call centre staff—and if they aren’t informed and bought in, problems are likely to accumulate.  If a major process change is forced upon them, they may begrudgingly continue to operate but may start looking at the contract for a get-out clause.
It isn’t just outsourced services that need to be considered. Take the following examples:

 

Conferences and events: Conferences often ask for audience But how many conferences ask for speaker feedback?  Yet speakers often travel to dozens of conferences, and have rich insight that could help the event to grow.

Procurement: Organisations often (quite understandably) have very rigorous and robust procurement processes.  But how often does anyone ask the suppliers that have to interact with this process whether it could be improved? Has anyone checked whether supplier invoices are being paid on time? Or at all?!

IT System implementation: After implementing a new system, organisations may issue a user satisfaction survey. But how often do they issue a designer and developer satisfaction survey to their external development partners, asking how the project worked for them (and what could be improved)?  And we’re not just talking about a ‘post implementation review’ here – where senior members of the team document lessons learned—but soliciting insight from the people directly involved in the project.   (NB: Good agile-style retrospectives will attain this feedback throughout, which is a significant advantage)

 

These are just three examples.  Whatever your industry, it is likely that suppliers are a crucial part of the ecosystem, and we ignore them at our peril.  They often hold deep insight gained not just from working with our organisation, but with others too.  They can often suggest improvements, and let us know what the ‘industry norm’ is—enabling us to choose to either follow it or differentiate.

 

It is easy to see suppliers as subservient and dispensable.  Yet to do so creates a transactional culture where neither party wins.   Suppliers that provide any kind of strategic goods or services can be considered a partner, and a key stakeholder in projects and organisational change.  Involving and engaging them is key—and understanding what success looks like from their perspective (and including this when building our balanced business scorecard) can help. Spreading the net wider and fostering an understanding of a wide range of perspectives helps us to define and measure our successes.

 


What are your views on measuring supplier satisfaction? Are there any other angles that should be considered on projects?   Please add a comment below, and lets keep the conversation flowing!

 

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About the author:

Adrian ReedAdrian Reed is Principal Consultant at Blackmetric Business Solutions, an organisation that offers Business Analysis consulting and training solutions. Adrian is a keen advocate of the analysis profession, and is constantly looking for ways of promoting the value that good analysis can bring.

To find out more about the training and consulting services offered at Blackmetric, please visit www.blackmetric.com

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