There is a light at the end of the COVID tunnel, and whilst none of us have a crystal ball to show what the future holds, we can be certain that our businesses need protecting and bolstering.
This is a great chance for IT Procurement and Commercial Teams to partner with the business to deliver on efficiency opportunities and mitigate internal and external risks.
We have seen many different approaches across our customers, from putting all spend and projects on hold to forging ahead with significant investments already underway, as they will be of no benefit half finished. What is clear that there will be a focus on the technology area of every organisation, what is being used, who the suppliers are, where are the significant areas of spend and what can we do without.
Taking the time to properly evaluate the answers to these questions and the many more that then follow is imperative in delivering a clear and focused plan of action. If you are able to identify the common pareto that 20% of suppliers cover 80% of the spend, then you are well on your way to getting things under control. However, on the surface it may be clear, but once the lid is lifted some significant capital investment may have been withdrawn and once favoured suppliers may no longer appear on the agenda. Frequently, there is also a disconnect between the priorities of the Technology versus Commercial teams.
Supplier risk is also a consideration that has come to the fore with COVID. We have experience with many customers that have an insignificant spend with a supplier, but if that supplier disappeared or couldn’t deliver the service their business would falter, do you know who they are? Knowing how suppliers manage their resources, technical, physical and human, mitigates business risk, shows they are sustainable and builds a trusting relationship, whilst ensuring your own business is protected.
Combining the analysis of supplier expenditure and risk provides a holistic view of the technical supply chain, there will be clear opportunities to provide quick fire benefits, followed by mid-term opportunities that require some level of investment of cash and/or resource, and then the long term sizeable benefits that need significant planning and resource to deliver.
As IT procurement specialists, using a combination of market review, supplier management, contract consolidation and negotiations we work with customers throughout the review and delivery cycle to obtain the benefits identified.