Executives who blame their suppliers for poor sourcing management are often incorrect, according to an IT sourcing expert who warned that businesses must have clear plans before involving suppliers.
Sean Pepper, an independent consultant who has experience as in-house head of vendor management at both Lloyds TSB and ABN Amro, said many organisations were “unhappy” at the value they derive from suppliers. But, he said, the onus for the shortfall “is really on the business much of the time”.
Speaking to Computerworld UK ahead of Forrester’s Sourcing and Vendor Management Forum in London on 16 and 17 November, Pepper advised businesses to “engage vendors better” and conduct projects within a realistic framework of their own supplier management capabilities. He will make the industry keynote speech on the second day of the conference.
“A lot of the time, when things go wrong with sourcing management it’s not down to supplier actions,” Pepper said. “Some businesses come away with the idea that their suppliers are evil, when they hadn’t decided what they themselves wanted and were effectively asking the vendors to be clairvoyant.”
He explained that many businesses “fail to understand they are bringing the supplier into their organisation”, and “overestimate” the capabilities of their suppliers.
Companies also tended to “sleep source”, he said, bringing in suppliers without thinking of the overall impact to operations and vendor management. They would benefit from much more thoroughly assessing their core business demands, what activities would be impacted by new sourcing, and how systems would be integrated, he said.
Businesses needed to clearly plan how often they would review progress, whether daily, weekly or monthly, he said, adding that using simple scorecards with “three to eight clear criteria” was an easy step to improving vendor management. Agreement on governance, between the business and its suppliers, was also crucial to sourcing success.