Blog

Five things to keep in mind when changing supplier

Jan 10, 2018 11:45:00 AM / by Henrik Schøtt Kjærgaard

 House-of-Improvement-Five-Things-When-You-Change-Supplier

When you need to change systems in your business, there are several things you need to consider.

The five most important are probably:

  • Strategy
  • Decision criteria
  • Requirements specification
  • Supplier selection, and
  • Implementation plan

 These form a series of steps that you need to take.

Strategy

Your first step is to define your supplier change strategy. This should be based on your company strategy, but specifically cover your change of supplier. This strategy will drive the whole project, and if you get it wrong, you risk losing all the benefits, or worst, having nothing happen at all. The questions to ask include: What do we want to achieve? Do we want better quality or efficiency? What manual processes do we expect to be able to develop? What should the system support? Who will benefit from a new system? Do we want to change the intersections between central and decentralized? Are there any processes we can cover globally?

Decision criteria

Once you have developed your strategy, it is time to look at the criteria for the final decision. For example, is it important for you that the new system is from the same supplier as existing systems? Would you prefer an international supplier, or a smaller player? Of course the price will be an important factor, but try to evaluate the alternatives as far as possible using non-financial criteria, at least in the first instance.

Requirement specification

So far so good. Now you need to define the company’s requirements for the system. This will include functional, technical and commercial requirements, and unfortunately it is not possible to just scribble down five or ten things off the top of your head. To get the most relevant suppliers involved, your requirement specification must be extremely detailed—much more so than most companies expect.

Supplier selection

Once all of these things are done—and not before!—it is time to choose your supplier. It is important to include all possible suppliers; that is, any suppliers who meet the requirements and decision criteria you set in the preparatory phase. For the avoidance of doubt, this means not only those vendors who rank high in a Google search, have called you several times and / or are cheapest. The money you might save at this stage will probably be spent later anyway. Choose the supplier who best meets your requirement specification and other decision criteria and also has a reasonable price. And while we are talking about this, do not underestimate the need for specialist competencies in contract development. That will certainly save the company money in the long term.

Implementation plan

You have done all the preparation, and chosen a supplier. Unfortunately, this is just the start of a much larger process. Now you have to get the new system up and running in the company, and that requires a plan. You need to think about how your new system will work with your existing systems and processes. You must consider what should be prepared in relation to existing systems, and who will need to be involved, as well as who will do what and when. You also need to ask when the project will be completed and how it will be implemented. Take the time (and use enough resources) to produce a meticulous project plan, and avoid any unpleasant surprises along the way. This will mean that the transition from one system to another is significantly easier than if you leave the implementation to chance.

 

If you are struggling with any aspect of this, some of our other blogs will look at each stage in more detail.

Topics: Vendor Selection, HR Tech, Strategy, Change Supplier