Maintaining successful vendor relationships is crucial to gaining the competitive edge in the contact center industry. Every business relationship comes with its own unique set of challenges, especially when you have one or more vendors involved. As a contact center veteran for the past 25+ years, on both the BPO and owner/operator sides of the coin, I have an intimate understanding of the importance of vendor relationships and effective vendor management.
In the past several years, I have focused on consulting in the contact center space and have worked with many clients who struggled in their vendor relationships. Often, we see red flags such as reactive management, lack of transparency, poor communication and broken processes. These can attribute to high attrition, reduced efficiencies and lost revenue—all of which negatively impact your bottom line.
Is your vendor able to stay on track with project deliverables, milestones and strategic goals?
You may be wondering: How do I address these red flags? What are some practical ways I can improve my vendor relationships?
Follow this guide and I will share some of my best tried-and-tested methods to set up strategic vendor relationships from the get-go. I will also share some best practices for vendor management which will ensure that you get the best out of these relationships. By establishing consistent relationship management processes, you will be well on your way to making the most of your partnership through controlling costs, risk mitigation and driving service excellence.
Choosing the Right Vendors
This is a no-brainer, but I can’t tell you how many companies fall short on choosing the right vendors. Have a plan in place based on actual needs. Your needs have to be driven largely by:
- The user experience (i.e., your customers)
- Operational requirements
- Your long-term vision for your business
- Ease of integration with your system
- Ease of scalability
- Flexibility of pricing
- Cultural fit
Also, consider what your definition of success is and the parameters that will define the measure of that success.
Research the key players in the market prior to sending out RFPs. This is one area that you really cannot afford to scrimp on. If market research isn’t your forte, consider bringing in outside expertise in the form of a consultant who can help you navigate the process with ease. This will help you avoid common pitfalls in vendor selection which include selecting vendors based on price, not clearly defining user and vendor requirements, and not properly vetting your potential vendors.
Setting Expectations
Once you’ve narrowed down potential choices, it’s important to set up your expectations from the very beginning. Have key stakeholders and end-users present at the initial discussions, not just for the buy-in, but also to iron out potential challenges. It’s important to have a document of user and vendor requirements that clearly outline your expectations. Ideally, this should be completed before the vendor selection process. If you already have your vendor, but feel like your expectations are not being met then consider creating this document to ensure you are on the same page.
Discuss your expectations as well as guidelines for the evaluation of vendor performance. Clarify and establish roles, schedules and timelines. Create milestones for periodic check-ins to evaluate progress, pick up on potential challenges, as well as to ensure that the deliverables and the budget are both well on track. This will help you stay on top of your vendors without undue micromanagement.
The Importance of Communication
An article by Purchase Control stated: “According to ‘2017 Global SRM Research Report’ by State of Flux, people and their soft skills are the core of SRM (supplier relationship management).” The same article also recommends to “create a documented process that will help guide your team through the management and administration of suppliers. In a large organization this can include Flowcharts, SOPs, Policy Documents and agreements, or simply a 2- to 4-page document that covers all of the points of agreement for you and the vendor… 37% of supplier relationship specialists have a higher level of engagement from suppliers when they engage with them in this way, and this creates a stronger bond with the vendor.”
Communication is a two-way street, and so is transparency. It is important to see your role as part partner and part “relationship manager.” Take the time to call up vendors or meet with them one-on-one on a regular basis. Demonstrate openness to hearing about potential challenges, in addition to the wins, and promote a culture of timely information exchange as well as teamwork and the sharing of ideas.
Ongoing Performance Management
The general aim with vendor management is to track quality, reliability, as well as overall performance. Validate the information you receive from your vendors. Also, ask yourself these important questions:
- Is your vendor able to stay on track with project deliverables, milestones and strategic goals?
- How responsive is your vendor to issues and do they understand the importance of customer service?
- Are they open and transparent about challenges?
- Are they able to take on feedback and switch gears when needed?
Consider having audit processes in place that allow you to objectively evaluate your vendor’s performance.
It is important to see your role as part partner and part “relationship manager.”
The Collaborative Model and Why It’s Important
Strategic vendor management can be taken up to an entirely different level if you start looking at vendors as potential collaborators. For instance, what additional value does your vendor bring to your business over and beyond the traditional business relationship? The 2016 Strategic Partner Index Survey offers some key statistics and defining behaviors for identifying collaborative vendors that are well worth looking into.
When it comes to successful business outcomes, it is important for you and your vendors to work together toward short-term and long-term KPI goal attainment. More importantly, it’s crucial that you involve your vendors in your strategy sessions. When you create a culture of collaboration with your vendor(s), you will be able to identify specific deficiencies and areas of improvement. It will also help you to establish and implement procedures and processes to improve key areas such as representative selection, training, retention, WFM, etc.
Key Takeaways
In conclusion, I know that lasting vendor relationships are not driven by contracts and handshakes. They are built on consistent relationship processes. It is important to engage with customer-centric vendors who are willing to work collaboratively on a win-win model. Successful vendor relationship management is built on the foundation of:
- Clear and timely lines of communication
- Proactive management
- Transparency at every step
- Passion to take on the “root” of organizational issues to provide lasting solutions, and not just a temporary Band-Aid
Remember, it takes two to tango. You have every right to expect clear communication from your vendor, but it’s also important for you to reciprocate. By allowing your vendor relationship to be a two-way street, you create a culture of collaboration, teamwork and trust. When you maintain positive vendor relationships and effective vendor management processes, you are able to improve operational performance, staff satisfaction and the customer experience.