Strategic Supplier Relationship and Contract Management
What we deliver
Strategic supplier management services that deliver maximum value. Our integrated, multi-disciplinary teams specialise in simplifying the management of highly complex contracts and detailed technical services delivery, which accelerates collaborative innovation and reduces on-going BAU costs between you and your supplier. We build good contract management capabilities in your team for ongoing success.
How you will benefit
Faster achievement of your outcomes. Evidence of our working with over 500 complex supplier relationships, demonstrates that a mature approach to genuinely collaborating with your suppliers, means you will often achieve very specific business outcomes in less than half the time you had originally expected.
Significant cost savings. The right client side strategic approach gives strategic suppliers more opportunities where they can widen their involvement in new service/solution areas for you. In turn, there is less supplier resistance to finding innovative ways to reduce BAU costs of existing services.
Supplier accountability to provide on-going maximum value. Our deep experience of both technical services delivery and contract law, means we understand the supplier’s “Expert Responsibilities” to provide best value, even when not documented in the written contract. Used collaboratively, we assure a win-win outcome for both parties.
Assessing what your internal team already does really well
Step 1 : Review alignment of your business outcomes
We review the business outcomes you are looking to achieve and your internal stakeholder expectations as to how you perceive that your complex supplier relationships will help your organisation accelerate achieving those outcomes.
Step 2 : Assess example outcomes of existing strategic relationships
Having reviewed your business expectations and outcomes, we’ll then look at a few examples of your current complex/strategic supplier relationships.
Between us, we can discuss how you feel about whether you are achieving what we have evidenced as being the ten key ‘behavioural principles’ that we see in the most successful complex / strategy supplier relationships.
We’ll also look at where the evidence supports your perceptions and where it does not. These principles are:
- Objectives being met. Your supplier is helping you to achieve your project objectives consistently, which in turn, means this is enabling you to achieve your business outcomes.
- Critical friend supplier. Your strategic supplier is both supporting and challenging you to work with them strategically to achieve on-going maximum value.
- Inherent commercial trust and good ethics. Both you and your supplier operate to high professional ethical and personal moral standards. In turn, the supplier delivering services to a high consistent standard, builds commercial trust between everyone.
- Sustained collaboration and innovation. You govern the relationship in a highly collaborative manner, that results in great innovation between you to optimise critical service delivery and streamline complex project solutions.
- Reduced service cost. Sustained collaboration and innovation in service delivery is driving significantly reduced costs for BAU services.
- High reputation with your peers. The ability to drive on-going service innovation and reduced BAU costs greatly increases your reputation with your executive peers.
- Internal team aligned. Truly collaborative operating governance means your internal senior stakeholders are all aligned as to the outcomes they are achieving from the relationship.
- Services always aligned to outcomes. Having a 6 monthly re-shaping process to check that business objectives and outcomes are still current and where they are not, to re-state/re-generate them, and then adjusting services/solutions to meet these updated objectives and outcomes, means your expectations are being sense checked and service re-aligned to meet these changing expectations.
- Flexible/agile contract structure. As part of reshaping/realigning services, the contract terms and schedules allow for reshaping of the supplier’s delivery of services and solutions, based on a value for money assessment at each reshaping cycle.
- Evidenced based results. Firstly, that the KPIs you have in place reflect the real value your organisation is achieving from the strategic supplier relationship you have in place. Secondly, that your process of validating performance, service/solution cost and ROI data means that it will stand up to independent scrutiny so that senior executives on both client and supplier side can rely on that data for improving performance on an on-going basis.
Step 3 : Examine your existing strategic management process
We’ll review your existing strategic supplier relationship and contract management process against the BPG ‘Optimise’ model (an evidenced ‘what good looks like’ model from over 500 complex supplier relationships) having first aligned the model to your business outcomes.
We can determine which aspects of your existing relationship and contract management process are already doing well and are aligned to your business outcomes.
We’ll also assess where it would help to improve alignment to generate even better value. The eight principle foundations of the Optimise model that will help you drive the ten relationship characteristics (behavioural principles) above, include the following :
- An Articulated Business Vision. The organisation has clearly articulated specific business objectives it will achieve once the service/solution has been implemented.
- An Intelligent Client Function (ICF). An ICF team that demonstrates strategic, commercial and partnership behaviours an Intelligent Supplier expects.
- An Intelligent Supplier. A supplier that understands the ‘holistic’ objectives of an Intelligent Client and strategically supports them.
- Clear Service Delivery Requirements. Clear articulation of the ‘use cases’ and business objectives the client is seeking from the supplier and its solution to enable for it.
- Supplier Expert Responsibilities. Clarity of an Expert Supplier’s “Duty to Warn” and how that impacts the pre-contractual due diligence responsibilities between the client and the supplier.
- Fit-For-Purpose Contract. Contract terms that are reverse engineered from the business objectives, to support ‘enabling’ behaviours.
- Buying Governance. Procurement governance that drives the right foundations to assure a fit- for-purpose solution/supplier is procured.
- Relationship and Contract Management. Strategic Relationship and Contract Management that assures on-going benefits are realised for the life cycle of the relationship.
Step 4 : Benchmark your internal client team skills
Aligned to your specific business outcomes, we’ll benchmark what the most appropriate strategic supplier management skills that are required from your internal team, to ensure you encourage your suppliers to support your business objectives in the most optimum fashion, quickly. The key internal team skills that we assess and align to your business outcomes, are :
- Thought Leadership & Strategy. (a) How effective the internal team is in establishing and forecasting the strategic supplier services/solutions available to support your own organisation’s effectiveness in serving its clients and (b) its ability to plan, implement and mobilise that strategy.
- Innovation/Service Re-Shaping. The governance processes in place that captures changing organisational objectives and outcomes, good existing operating practice, where existing operating practice needs to be realigned to drive better value and the process of updating written contracts and schedules so they continue to align to (a) the changing business objectives and outcomes and (b) the supplier services/solutions being delivered.
- Commercial Trust and Ethics. The clients perception of the degree of Trust and Ethics that are being achieved by the supplier, from the supplier’s services/solutions that are being delivered to the agreed outcomes, on time and to budget. Separately, the supplier’s perception of the degree to which the client’s dealings with the supplier are being conducted in a commercial trust and ethical manner.
- Fit-for-Purpose Contracting Skills. The degree to which the client team (and its external advisors) have contractual structures in place that drive ‘enabling’ and ‘innovative’ behaviours between client and supplier to allow on-going maximum value to be derived over the lifetime of the relationship.
- Expert Supplier Responsibilities. The degree to which the client team understands the supplier’s “Expert Responsibilities”, implied by recent case law, have been incorporated into the requirements definition, procurement, contracting, project management, operating and performance optimisation process.
- Commercial Negotiation Skills. The depth of domain expertise within the client team in leveraging and optimising ‘Interest Based’ negotiation skills to drive maximum value between client and supplier on a win-win basis.
- Buying Governance. The degree to which the internal team has developed a procurement process that starts with the ‘end in mind’, ie. how the procurement process will operate a due diligence process that can safely assure a suitable fit for purpose service/solution is likely to be implemented on time and within budget.
- Objectives/Process Alignment. How much knowledge the internal client team has of (a) the key objectives the organisation is aiming to achieve and by when, (b) the governance process of identifying changing market forces and which client objectives need to be realigned, as a result, (c) what operational processes and supplier services/solutions need to adapt to meet the changing objectives and (d) the governance and contractual documentation that will need to be amended in the event of objectives and supplier service / solution changes.
Step 5 : Validate data accuracy of supplier performance, costs and ROI
We’ll review the performance data, cost information and return on investment you hold for your strategic suppliers and determine, against our internal reference framework based on over 500 complex / strategic supplier relationships.
From this, we’ll determine between us which data stands up to robust independent scrutiny and which data is more subjective. Within the context of the available data, we assess its relevance, accuracy, timeliness and punctuality, accessibility and clarity, comparability, coherence and completeness.
Step 6 : Define a roadmap that defines your optimum ‘Future State’
The roadmap takes into account:
- Your business plan of outcomes you want to achieve and by when
- The degree to which any complex project services/solutions are necessary to achieve your business outcomes
- Where your existing supplier relationship and contract management process is already aligned to supporting your business outcomes and where some realignment of it will generate further value for you
- How your existing processes of procuring new strategic relationships, remediating and improving existing relationships and the exit and transition of relationships into new service/solution provision aligns with your business outcomes.
- We’ll also look at whether any realignment of your existing processes will assure better fitness for purpose of those strategic relationships. Within this area, it’s normal to consider how appropriate court-case-precedents that involve strategic relationships and the supplier’s “Expert Responsibilities”, will impact your creation and updating of policies involving:
- Roles and responsibilities between you and strategic supplier, including individual internal job descriptions and OKRs
- Operating governance
- Relationship and contract management governance (to assure the supplier’s “Expert Responsibilities” are not inadvertently diluted and undermine your contractual protections)
- Your competency framework for the Intelligent Client Function Team, including the interdependent elements of cross-functional roles and responsibilities
- Team capability building including training, coaching and mentoring aligned to agreed business outcomes
- Overall process modelling aligned to the ‘Future State’ (target operating model)
- Output schematics. The outputs will include and explain the preferred key options, key milestones, what is already working well for you, and where improvements can be made that will help to optimise maximum value in your strategic supplier relationships.
Other considerations for Strategic Relationship Management
Typical hurdles in the management of complex supplier relationships
There can be challenges in encouraging organisations to take strategic supplier management for complex solutions and services, seriously. These include:
- An unwillingness from the client key decision makers to support a strategic supplier management strategy because of the investment involved
- Key decision makers having fears about their strategic management strategy not being successful – a perception of wasted investment
- A lack of internal client stakeholder agreement over pragmatic expectations to be achieved by having a successful strategic supplier management strategy
- Poor internal visibility of the end-to-end strategy process including a lack of understanding how to measure its success over what time scales and key milestones
- Client worries regarding internal reputations within their own organisation in the perception of the strategy not being successful
- A lack of coal-face experience in implementing a strategy that can independently evidence a good return on investment
- Not knowing how to practically govern strategic supplier relationships and instead, ‘reverting to type’ in an aggressive, position-based approach from the client to the supplier rather than a mutual interest-based approach that provides the foundations for win-win outcomes.
- Lack of timely client decision making through poor process governance for a strategic relationship
- Poor facilitation management between client and supplier.
Some successful relationship management examples
Successful examples of sectors we've managed strategic relationships in
Why the BPG Optimise process drives significantly better value
The BPG ‘Optimise’ Method is evidenced from over 500 complex supplier relationships. It shows there are 8 characteristics present in every successful complex relationship. We can help you successfully implement these quickly to improve service innovation, supplier relationships and drive down BAU costs. Its foundations lie in two areas :
- The really great stuff. Across more than 500 complex relationships, we’ve been fortunate enough to be involved with client organisations that really ‘get it’. They drive exceptional value in their strategic supplier relationships. We’ve helped to develop excellent exemplars of business cases, service/solution requirements, procurement, negotiation and contracting strategies, fit for purpose agile contracts, operating governance that continually aligns the contracts and service/solution requirements to business outcomes every 6 months, and really insightful ways of innovating new ways of working and significantly cutting the costs of BAU project delivery.
- The ‘not-so-good stuff’. Our “Expert Witness” experience, giving evidence in court of which party (supplier or client) has caused the problems being experienced, poor behaviours, misaligned contracts produced in a silo and not aligned to the business objectives, contract terms that the courts interpret the responsibilities of differently to the ways the solicitors drafted them, originally expected and so forth.
The greater value this experience provides to you. Having seen the very ‘nasty’ end of complex / strategic supplier relationships that have gone wrong through our expert witness work for the courts, we’ve also seen how the courts interpret good and great behaviours as well as poor ones.
A strategic supplier’s “Expert Responsibilities” implied by the Courts and often not documented in the contract terms, requirements or project schedules, means that traditional methods of defining requirements, the procurement and contracting process, operating and project governance and delineating roles and responsibilities between client and supplier, are often not contractually enforceable from a practical perspective.
The BPG ‘Optimise’ process takes into account these “Expert Responsibilities” implied by Courts, and assures a much more strategic relationship, that drives collaboration, innovation and great value between client and supplier.
Strategic supplier relationship and contract management is only one element of the BPG ‘Optimise’ method
Evidenced by over 500 complex relationships, the ‘Optimise’ method can be implemented quickly to improve service innovation and drive down BAU costs.
Share Great Practice
Experience of over 500 complex supplier relationships, means we can share great practice with you that really works.
Drive maximum value
Strategic Supplier Relationship and Contract Management helps support the 10 characteristics that drive maximum value in complex supplier relationships.
A brilliant project outcome
This is part of the ‘Optimise’ process; a proven method assuring a brilliant project outcome and an excellent supplier relationship.
5 steps to a great new relationship
See the 5 steps to making sure new complex supplier relationships work really well.
Clients that we support
Most of our clients are already highly experienced in complex supplier relationships. Click here to see how we help them take these relationships to the next level.