We truly are in the era of Core Competencies, where best of breed vendors are supplying a broad range of services to our businesses. There are niches within niches so that you can find a vendor that is a perfect match. As a result, there are more to manage than ever.
Last time I wrote about How to Choose Friends that aren't grizzled ex-motorcycle gang oilmen. But after sitting through Managing a Multi-Supplier Environment with ServiceNow at Knowledge 14, Fran Fernandez' and Stephen Mann's (@stephenmann) talk really reminded me of one thing: Vendor/Supplier management is really about relationships. And you need to be able to get in and get out quickly.
Two slides really stood out.
They illustrate a common trend: relationships require care and feeding to be successful, and it is important to terminate abusive relationships. But how do we know which are which? Is it time to cut and run, or fight to make it successful? It's easy to let emotion win over data. The amazing thing about the new Service Integration and Management (SIAM) improvements to ServiceNow is that data can now be used to evaluate these relationships!
While SIAM is a new, evolving and complex area, one element we rely on constantly is assessments.
Scorecards
ServiceNow uses scorecards to assess our vendors and suppliers quarterly. We evaluate Cost, Quality, Delivery, and Engagement (e.g. Support/Service). In some segments, we also score Technology, Financial Stability, and other metrics that apply to specific supplier types. You wouldn't use the same yardstick to measure a datacenter as you would a programmer.
Nobody is good at everything. The best teams have individuals that complement each other's strengths and weaknesses, and the same goes to vendors or suppliers. The scorecards allow you to identify and target weaknesses to address. One vendor in particular provided high levels of service in most categories, but was delivering inaccurate data once the jobs were completed. We were able to have candid conversations about the deficit, which ultimately led the supplier to increase accuracy from 75% to 99%+.
Quarter over quarter, the data helps remove irrational "It broke; fire someone" knee-jerk overreaction and provides a feedback loop to improve whatever can be fixed. This feedback loop also identifies suppliers that refuse to improve so that you can target them for replacement.
Honest Reflection
Imagine a marriage counselor who sought relationship perspective from one partner but not the other; the other partner would quickly become disenfranchised. Nobody likes 24/7 criticism and we all wish to be treated fairly.
At ServiceNow, we also ask our vendors and suppliers to scorecard *us* each time we scorecard them. Perhaps we aren't providing enough lead-time for certain deliveries, or aren't supplying detailed requirements. Our vendors and suppliers need an opportunity to let us know where our own issues are, and these assessments also let us track our own progress over time.
These new tools and capabilities will give you the ability to quickly assess the performance of your relationships and identify target areas of improvement, or demonstrate with hard data that it is time to move on sooner rather than later.
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