Strategy for choosing a new supplier

Jan 25, 2018 10:30:00 PM / by Henrik Schøtt Kjærgaard


Choosing a new supplier can be done very quickly - if you want. Just pick up the phone and call the first one that comes up when you search for 'new vendor' online. Might be the same one who has contacted you frequently in the past. This may not, however, give you the best possible outcome.

The experience of our customers suggests that the best and most effective place to begin is with a strategy. This is not a ‘back of the envelope’ job, either, but should ideally involve relevant stakeholders across the company. You need to make sure that you fully understand your needs, and know what you want to achieve by changing supplier or choosing a vendor for a new system. 

The strategy for choosing a new vendor or supplier should be based on, and therefore fit closely with, the company's overall strategy. It should, however, also be specific to the new system project. It also needs to be open and visible internally and externally, so that all stakeholders can help ensure that you are moving in the right direction.

The road to improvement less travelled

It is fair to say that most people facing a system change choose either the most popular supplier or the one that is the cheapest. There is then a tendency to choose from what the supplier offers rather than thinking about what you need as an enterprise. This is, clearly, the easiest solution, but it is not necessarily the one that will give your company the system and functionalities you need.

You may need to take the ‘road less travelled’, and having a strategy is a good way to help you decide whether this is the case. It is not easy, but we guarantee taking time to develop a suitable strategy will be worth the effort. There are plenty of people who have changed systems without having a strategy, and will tell you that everything is fine (though it may be worth asking them how their new system is working in detail). With a clearly defined strategy, however, you will find that you are able to explore all the issues, and really get to the heart of your decision—understanding what you want to achieve.

Stakeholders and opinions

Developing a strategy will ensure that all stakeholders know where you are heading, and will also give potential providers a chance to meet your needs without having to become mind-readers. It will, therefore, support the business in the strongest possible way.

You may also want to ask external advisors or consultants for their opinion. If so, choose someone with plenty of experience in the field. If their experience is anything like ours, they will tell you that supplier choices are best where there is a clear strategy. The strategy forms the backbone of the project. You would, after all, not start building a house without any idea of how the final result should look.

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