DeltaBid welcomes this guest post from Lourdes Coss, procurement professional and author of Procurement Methods: Effective Techniques. She walks us through five steps to creating a transparent vendor communication model that works within the bounds of strict organizational policy.
Procurement officials are responsible for developing good vendor relationships to maximize benefits for the organization, yet sometimes they have to do so while complying with strict communication rules. Often, they are also charged with being the watchdog of end-user vendor communications. Strict organizational laws or policies may at times challenge the pursuit of mutually rewarding business relationships. These laws or policies are often the reaction to experiences colored by past improprieties, either apparent or real.
The Benefits of Developing Positive Vendor Relationships
We all know that communication with vendors is essential to developing good business relationships. The sharing of information is beneficial to both parties and provides a base of knowledge over time that facilitates growth. Leveraging vendors’ market knowledge, trends, resources, and expertise supports an organization’s educational model. On the other hand, this model, generally in the public sector, could mean toeing the line of ethical behavior as defined by the organization.
Good relationships happen over time and so does the accumulation of information. Given this fact, it makes sense to assume that parties would want a lasting relationship so that they can reap the benefits of the time invested. Therefore, jeopardizing an opportunity of a lasting relationship for a short-term gain may seem illogical. This assumption would be true except for the fact that relationships involve people and that imperfections creep up at one time or another. We have seen how a moment of weakness or the self-interest of a few individuals have changed the way business is conducted in an organization. When boundaries are crossed, regardless of whether intentionally or not, consequences are very similar. Taking vendor conversations to the areas where shades of gray blur judgment may challenge even the strictest communication model if not monitored.
If communicating effectively is at the center of good vendor relationships and taking into account past experience is also essential, then an objective approach incorporating the wisdom of the experiences in a communication model would provide a balanced path. Finding the balance between polarized positions may be an opportunity to not only develop communication models that can be managed, but also build your own internal relationship with end users.
The procurement professional can assist in establishing the communication parameters to help reduce or dismiss the appearance of unethical behavior while maximizing the benefits of the business offering. Optimizing results for the organization while avoiding the appearance of improper conversations will require some preparation. Perhaps a place to start is by being present and intentional about vendor communication. Intent and presence can be summed up into five steps.
5 Steps to a Transparent Vendor Communication Model
Seek to understand the industry.Understanding the industry will help you communicate on a similar level with the vendor. Some areas are volatile and changes occur on a daily basis. Others, not so much. This may impact the frequency of communication, how closely the vendor will need to work with the end user to keep on top of that market volatility, and what type of information will be shared. If you are new to the industry, research and/or learn from peers the essentials before establishing communication models that may box everyone in and hinder the business itself.
Define communication boundaries.Rules of engagement and the dissemination of those rules will provide transparency to the communications. For example, a discussion of market trends may bring about the conversation of the organization’s future plan. The caution signal should go up when the discussions about the future involves revealing details of upcoming procurements not publicly available to others or an opportunity to contribute to the specifications that will be included in a future procurement. Creating an understanding of the type of communications permissible will help establish the boundaries necessary to comply with organizational policies and/or laws. Engage your end user and vendor in the development of the communication plan. This might not always be possible, but their input could be helpful.
Educate and obtain agreement.Educate and get agreement from the vendor, end-user personnel, and any stakeholders. Do so with stakeholders either expected to have ongoing communications with the vendor or that may have interest in certain communication. There is no need to reinvent the wheel. Reuse models when appropriate, educate parties and get their agreement to adhere to the communication model.
Facilitate relationship building.Facilitate communication and issue resolution. Encourage the development of a transparent business relationship so that any of the parties can stop conversations that may fall in the gray zone. This will make you, the procurement professional, the facilitator as opposed to the gatekeeper.
Check in regularly and hold everyone involved accountable.Monitor progress on the business deal with both the vendor and the end user. Let them know that you are intermittently checking in on progress and issues. This will keep you within sight and in mind! Both parties will be more likely to check in with you as the procurement officer if they know that you are engaged and ready to assist them.
Absent the intent to obtain personal gain, it comes down to education. In times when things have gone very wrong in a business deal, it’s easy to take strict measures to keep the situation from reoccurring. Strict measures tend impede business and are often ineffective. Perhaps the focus could be in the vetting process and establishing effective communication models upfront, getting commitment from all parties to abide by the model established, monitoring the relationship, and acting as the facilitator so that you stay in the picture throughout the term.
When both parties are getting out of the relationship what they need to consider the relationship successful, there is an innate appreciation for each other, which is the foundation of trust. Vendors value long-term relationships and unless there is a bad apple, any short term or personal gain would lose its charm when the long-term relation is the price to pay.
About the author: Lourdes Coss, MPA, CPPO
Lourdes is a procurement professional and author of Procurement Methods: Effective Techniques, a guide for procurement professionals. She has 27 years of procurement experience working for large pubic organizations in the U.S. where she has successfully led major procurement transformations resulting in cost savings, increased operational efficiency, and enhanced procurement capabilities for the organizations. Lourdes welcomes connections via LinkedIn.