third parties
signal that it will be possible to build strong and effective relationships will be a major indicator of future success. The value of the service a supplier
will provide can be assessed using factors such as their approach to quality control and risk management, and their complaints analysis procedure. Clear objectives and targets should be set and continually assessed in order to measure value, perhaps by first offering a trial or probationary period, if feasible. In addition, suppliers can be asked to demonstrate the value added to other clients as examples to show the worth of their service to your business. There are now many examples of risk and reward sharing partnerships, particularly in the supply of goods and services to the public sector. Price comparison sites in the
commercial world, other than for commoditised products such as stationery or utilities, are not yet the norm. Purchasers must still research products, services and providers before contracting. Suppliers must ensure they understand this need and respond accordingly. Supplier management strategy and execution has changed significantly and how suppliers secure business has had to adapt to survive. Relationship is still a critical success factor but now far more objective decisioning tools are underpinning purchasing choice.
enSuring a valuable Supplier/client relationShip Choosing a supplier in the first place is a difficult task in itself. But the real challenge comes after the selection process when it is time to kickstart the working relationship to ensure the very best results. So how can everyone get the most out of their supplier relationships? Once you have chosen a supplier to
work with, it is important that you know the account managers and the business they work for inside out. All clients, no matter what their business, should have a good working knowledge of who works for them, their business model and how each of the suppliers operates. This can be managed via detailed reviews that are formally documented and development of the business relationship on a wider basis
than the day to day running of an account, as well as more informal ad hoc reviews. The first thing to do having been
through the supplier selection process is to draw up a clear Service Level Agreement (SLA) to set out the requirements expected of the supplier. The outline of this may have formed part of the tender process but it is likely that it will need to be finessed once a decision to work together has been made. This ensures all parties involved agree to specific standards which the task in hand can be measured against. Continual assessment and detailed audit programmes looking at adherence to the client SLA help to manage a supplier. This should cover all aspects of a suppliers operation and ensure that any risks associated with the programme being followed are adequately mitigated.
“THE VALUE OF THE SERVICE A SUPPLIER WILL PROVIDE CAN BE ASSESSED USING FACTORS SUCH AS THEIR APPROACH TO QUALITY CONTROL AND RISK MANAGEMENT.”
The inherent risks of using an outside
supplier in your business also need to managed. This can be done through the audit programme and also the SLA as all potential risks should be covered and addressed. Ensuring that new employee screening covers the same standards at the supplier end as it does with your own operation is crucial where sensitive activities are going to be undertaken on your behalf. It is important that you have shared core values and supplier buy-in to your business goals. Successful client/ supplier relationships are usually those built on the solid foundations of business partnership and a mutual aim of working together for the benefit of all parties. One area that must not be forgotten in the supplier-client relationship is
34 mortgage introducer SEPTEMBER 2010
regulation. All of us working in financial services must adhere to strict regulatory requirements and Treating Customers Fairly (TCF) is crucial in all areas of our businesses. The need to ensure that this is embedded into the suppliers operation is crucial, particularly when suppliers are delivering services on your behalf. Delegation of delivery to a third party does not mean abdication of responsibility and compliance accountability will remain with the purchaser, unless explicitly and legitimately transferred to the supplier. Sharing best practice and working with the supplier is fundamental to both parties success.
ongoing aSSeSSment Assessment does not end with proven adherence to the SLA at an annual review. There are several different variables that should also be measured on an ongoing basis to evaluate third parties. This can include KPIs such as turn times, quality of files provided and the overall quality of service. This ongoing evaluation can then be used to support future contract decisions and the volume of business offered to different suppliers. To further monitor suppliers, holding
panel meetings, audits, mystery shopping and site visits are also extremely important. Bringing suppliers together at panel meetings where possible to share best practices and also their insights is a successful tool in driving forward both relationships and also the performance in that area of your operation. These evaluations of a supplier help decipher the task at hand and the quality of work being done, as well as ensuring adherence to the SLA set out at the start of the contract. Managing third party suppliers can
be time-consuming. Companies, at whichever part of the customer experience they sit, should have clear knowledge of who works for them and how each of the suppliers operates. By setting clear guidelines at the outset and having robust evaluation procedures, they can ensure that they are getting the most out of each third party supplier and that they are adding value to the business and appropriately managing risk. n
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