You may be familiar with the concept of the Intelligent Client and the Intelligent Client Function (ICF), but what about the ‘Intelligent Supplier’ – would you know what to look for to determine if your strategic provider is operating as an Intelligent Supplier? Would you recognise the Intelligent Supplier Behaviours required for a successful relationship?
What is an Intelligent Supplier?
An Intelligent Supplier is a supplier-side team that appropriately responds to, supports and critical-friend challenges their client’s business vision, outcomes, objectives, strategy and behaviours. Intelligent Supplier behaviours support collaboration and innovation with their clients to ensure client business outcomes and objectives are achieved, while also ensuring they can legitimately, openly and honestly achieve their own objectives too.
What are Intelligent Supplier Behaviours?
How can you be sure you are working with an Intelligent Supplier? Our experience of optimising 500+ strategic supplier relationships has taught us that Intelligent Suppliers inherently display eight key behaviours. The key to understanding if you are working with an Intelligent Supplier is that they should be able to evidence each of these eight behaviours, or characteristics:
1: Understanding, supporting and challenging the Client’s Business and Operating Strategy
The supplier can evidence that its intentions, methods and behaviours all align to understand, support and develop the client’s business and operating strategy, so that the client is likely to achieve its business vision within the time and costs it anticipated at the outset.
2: Supporting the Client’s (changing) Business Objectives.
The supplier can evidence that it has achieved not only the client’s contracted objectives, but is helping the client to enable broader or realigned business objectives that it may not be expressly contracted for. In other words, the supplier is adding value over and above the contracted relationship.
3: Evidencing ‘Commercial Trust’
The supplier can evidence from its other clients that they do appropriate due diligence and ‘ask the right questions’ of their clients in new project work or change variations. In other words, the Supplier demonstrates ‘Commercial Trust’ behaviour. [see FAQ: ‘What is Commercial Trust in Strategic Supplier Relationships and Is It Important?’]
4: Constructive Critical Friend
The supplier can evidence that it has and will continue to challenge its client’s contracted KPIs if they are driving either its own or the client’s behaviours in a way that prevents it from achieving the client’s objectives in the appropriate manner.
5: Managing the Innovation Process
The supplier can evidence that it regularly provides the client with innovations to pilot. It can evidence an engagement model to encourage the client to actively participate in the innovation process at the senior executive level and that it has an active lessons–learned capability.
6: Contract terms re-shaping and development
The supplier can evidence that the contract terms it has for the majority of its clients provide the foundations to drive good behaviours between both parties and are fair and equitable. It demonstrates and can evidence that it works with its clients to review and re-shape the contract every six months and realign to potentially changing client objectives.
7: Client Engagement Function
The supplier can evidence that with its existing clients, it actively engages with the client’s ICF team and works with them to re-shape and ensure service delivery remains aligned with the client’s business outcomes.
8: Service Area Domain Expertise
The supplier can evidence, from the results it has achieved with other clients, that it has deep domain expertise for the technical services it operates.
Conclusion – Why are Intelligent Supplier Behaviours important and who benefits?
Good Intelligent Supplier Behaviours provide the foundations for quickly building commercial trust with the client. The client is then encouraged to open up additional commercial opportunities. The supplier and client work on innovation projects together, driving greater cost savings across BAU services for the client whilst improving the supplier’s operating margins and cash flow.
Want to Learn More?
You may be interested to learn more about where and how the role of the Intelligent Supplier fits in to the Best Practice Group methodology for successful strategic supplier relationships. See the related article: How Should I Manage Strategic Supplier Relationships?
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