There are 8 core elements that go to determine whether a supplier has what it takes to be an ‘Intelligent Supplier’.
Our experience of working on over 500 complex service delivery relationships has provided us with a great degree of insight into both sides of the relationship. Much of this work centres around bringing parties closer together by aligning their objectives, establishing where priorities and aspirations meet, and of course, where and why they do not.
The formula to a practical, insightful and collaborative team of client and supplier is not fixed, but from the evidence of successful relationships, these eight core elements are the foundations that will assure a profitable, value for money strategic partnership that can be built upon.
The 8 Core Elements Of An Intelligent Supplier
1. Understanding, supporting (and challenging) the Client’s Business and Operating Strategy
An intelligent supplier is one that is prepared to offer solutions and innovations that may provide a more productive or effective way of achieving their intelligent client’s business outcomes. Note that this is not only about the supplier being ‘intelligent’, but that the client must also be ‘intelligent’. Our research has shown that even the most skilled intelligent supplier will come up against ego-filled client barriers should they attempt to challenge a less than intelligent client, or offer up independent ideas for value improvements. Click to read more.
2. Supporting the Client’s (often changing) Business Objectives
An intelligent supplier is one that is able to show that it not only supports its client’s contracted objectives, but that it also is willing and able to adapt to the changing demands of a client relationship. These relationships can last for many years – in some cases, they last for decades (PFIs for example). There are, therefore, plenty of opportunities for technological, economic or end-user preference change, as well as to find ways to add value over and above what is expected of both of you in the agreement. Click to read more.
3. Evidencing ‘Commercial Trust’
An intelligent supplier is one that exudes and inspires commercial trust. They almost always consistently deliver on their promises, accept responsibility when things don’t go as planned, and offer solutions and innovations when things change on the project. A supplier evidences their commercial trust through proving that they went above and beyond their contracted requirements to innovate or adapt to a client’s changing expectations. Click to read more.
4. Constructive Critical Friend
An intelligent supplier is one with the confidence to question aspects of a client’s expectations that it feels could benefit from improvement, chiefly the KPIs they must agree to support and achieve. An intelligent supplier places the prospects of the relationship above all else, doing all it can to ensure that there is clarity and a plan of action that it has independently analysed and optimised against known opportunities and risks. Click to read more.
5. Managing the Innovation Process
An intelligent supplier is one which recognises that innovation is not simply about idea production, but is instead based on the capacity and willingness of the supplier to test, review, and implement those ideas, and to determine their value to the relationship. An intelligent supplier will also realise that an important part of innovation management is the collaboration it has with its client, drawing them into the process, and having the means to evidence benefits achieved while innovating for other clients. Click to read more.
6. Aligning your Contract Terms to Changing Circumstances
An intelligent supplier is one that appreciates the importance of a periodic review and adjustment of its agreement with its client to adapt to the changing needs of the relationship. Without such a process built into the contract, and committed to by both parties, it often moves out of step with the needs of all concerned, even pulling both parties in directions they know to be wrong. Click to read more.
7. Client Engagement Function
An intelligent supplier is one that realises just how important it is to form proper connections with their client-side counterparts, not as a necessary evil to keep them happy, but as a means to a more aligned relationship where both sides are able to pull harder together in the same direction. Such close working relationships enable parties to better ‘understand’ one another, to maximise the opportunities posed by collaborative working. Click to read more.
8. Service Area Domain Expertise
An intelligent supplier is one that is able to evidence its expertise in a specific area through the work it has done with other clients. The supplier should be able to show it has risen to challenges, identified and solved complex problems, and has the capacity to do so time and again when required. Click to read more.
Conclusion
Each individual element of the eight we’ve mentioned is important in its own right, but the key point to remember is that, in our extensive experience and as evidence has demonstrated, all eight need to be present for your supplier to have what it takes to be an intelligent supplier.
With this in mind, clients should be developing the behaviours, governance, systems and processes required to capture this information/knowledge at every stage of their relationships, to create a value audit trail to show what has been done to determine whether the strategic partners you are working with are driving the most effective value. Such evidence will offer added confidence when in a BAU state, and qualified reasoning should the perception of service delivery levels start to become misaligned.
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