By Marc Pettican, President of Barclaycard Commercial Payments
The procurement landscape is continuously evolving, and as a result so are the needs of procurement professionals. No longer does cost reign supreme: businesses today are increasingly prioritising quality of service over cost when engaging service providers.
As a result, this shift has seen a growing appetite for longer-term partnerships built on trust and transparency.
In light of this changing landscape, I’ve drawn on my experiences and outlined five ways procurement leaders can enhance the relationship they have with suppliers as well as the benefits, beyond cost, that a fruitful partnership can bring to your business.
1. Remember your supplier is a relationship you should nurture
Businesses that view the connection between themselves and their supplier as a mere transaction are unlikely to reap the full benefits that a partnership can bring. In truth, interactions must be beneficial for both sides for the relationship to prosper. Creating a stronger, deeper association – based on a joint understanding that you are both partners – will allow for the relationship, and ultimately your business, to thrive.
2. Keep up the communication
Next, remember that communication is king. Whilst it can sometimes be viewed as a burden, businesses that communicate openly stand to gain the most from the supplier relationship. This can be as simple as understanding what your supplier needs, their requirements, and their ways of working – all of which will help to mitigate any potential bumps in the road.
Having a clear line of communication can also uncover hidden opportunities. As your company grows, you’ll need to be sure that your suppliers can grow with you. This could be by learning more about their products and services – or understanding their own plans for moving forward. The good news is that businesses are waking up to this. Three quarters (76 per cent) of procurement leaders told us they now communicate more openly with suppliers about their business strategy, while almost half (48 per cent) contact their preferred suppliers at least once a week.
3. Make sure you understand each other’s strategic priorities
Alongside communication, understanding each other’s strategic priorities is key to ensuring a smooth and efficient relationship. In fact, when exploring how procurement professionals felt they could improve the supplier relationships, the number one response was a better understanding of each other’s strategic priorities.
One simple step to do this is identifying a moment in time to communicate with your suppliers. You need to be clear with your suppliers what you want to achieve by this time next year. So, get talking!
4. Build a relationship based on trust and transparency
Trust and transparency are crucial to a successful buyer-supplier relationship. In fact, it ranked as the third most important attribute for procurement leaders when engaging service providers. The first step is to set parameters with your suppliers – and agree to stick to them. Then, if something isn’t working, be quick to identify it and be honest with your supplier on why you think it’s falling short.
Transparency and clear communication of your goals and concerns will help build a stronger partner by your side – which ultimately will enhance your business and its overall efficiency.
5. Make the most out of the tools you have available
The good news is that there are various tools out there to enable procurement leaders to enhance the buyer-supplier relationship. One example of this is the Precisionpay Hub, which has been recently launched by Barclaycard Commercial Payments to help businesses build and improve supplier interactions. The new service removes the obstacles in the existing procurement process, making it easier for buyers and suppliers to interact and get the payment process and terms to suit them both.
Investing in the right tools for the job will help you focus on your supplier relationship, confident that you’re upholding your side of the arrangement.
As quality of service continues to rise up the list of priorities for procurement leaders, the buyer-supplier relationship has never been more important. By putting these tips into practice, you’ll go some way to ensuring a fruitful partnership in 2020 and beyond – and who doesn’t want that?
- The above is based on Barclaycard research exploring the changing procurement landscape. Fieldwork involved polling 512 UK senior managers and above who are procurement decision makers in companies with at least 250 employees, and who have a turnover of at least £6.5million.