Tech and digital procurement are key enablers of digital transformation. So, for digital transformation to be truly effective, you need to create and nurture a strong Procurement Department that is aligned with your objectives. In this article, we examine how your procurement department can enable the assembly of a strong external organisation – the vendors and suppliers that act as true partners.
As internal (client) and external (agency/vendor) collabration lines start blurring, digital transformation challenges the whole concept of an organisation as we know it. Just as a strongly structured internal organisation is a crucial enabler for digital transformation, so is your external organisation – the agencies, vendors and suppliers that help successful digital transformation to take place.
Strong, collaborative relationships with strategic partners (i.e. your vendors and suppliers) can allow for high added value, enabling businesses to:
When it comes to choosing strategic partners that can accelerate and enable digital transformation, the following four pillars are key contributors to success:
The Request For Information (RFI) and Request For Proposal (RFP) tender process helps you to identify strong partners that are the best fit for purpose. Of course, it is a tiring, yet crucial, process. But in order to succeed, the selection process needs to:
BUILD A SOLID RFP BRIEF
DEFINE A LONG-LIST OF POTENTIAL VENDORS:
Paying attention to fitness-for-purpose is more important than getting “the best” supplier in a specific field. For example, a vendor’s ability to meet your future needs is probably even more important than their ability to meet your current requirements. Furthermore, you need to ensure that the vendor is the right size for your account. This will help you to ensure that your account gets a high level of focus and that the vendor can deliver on scope.
ISSUE A PRELIMINARY RFI
In the form of a short email communication to your long-list of potential agencies, which helps you better assess their suitability to the tender through a few top-line screening questions – this will save precious time on both sides and will make the RFP more effective.
ISSUE AN RFP BRIEF
To identify your vendors short-list. This will be focused on technical and operational qualifiers, size ratio and commercials. Clarify all the commercial and legal ground rules beforehand. Make sure an NDA is issued and signed ahead of issuing the RFP.
APPLY SELECTION CRITERIA
Focus on operational and commercial aspects as well as team culture and chemistry. The latter is often overlooked, but is crucial for long-term relationships.
CHOOSE YOUR VENDOR:
Identify the appointed company and start working on finalising the contracting phase.
Once you’ve selected the vendor, it’s time to establish the commercial relationship. You will need to ensure alignment between business objectives and vendor remuneration.
You will also need to ensure a crystal-clear intellectual property (IP) ownership structure: this is particularly crucial when discussing software development and system integrations – make sure you receive expert legal advice on contractual terms thought this process.
Once the contract has been finalised and signed, it’s time to start working with your vendor. Often, this is the most overlooked part of the process.
Keep in mind that most strategic change-driving collaborations start with some sort of “teething pains” at the beginning of the project. In order to minimize these issues, it is crucial to plan an on-boarding process (e.g. discovery workshops, induction sessions, etc.). This will help you to manage the expectations of all parties involved.
Remember: whether client-side or agency-side, everyone involved is a human being. Therefore, emotional intelligence and empathy need to be thoroughly deployed to maximise the efficiency and efficacy of your new collaboration. Large partnerships in business terms are comparable to “organ transplants”. They entail new processes and ways of working together with a new external team that need to be absorbed into your existing organisation.