Supplier Category Management Best Practices

Telecom Category Vendor Management Best Practices

Telecom Category Supplier Management involves focused, strategic, planning by both sourcing and IT teams to perform effective supplier management.

Providing strategic vendor sourcing services involves procurement and IT initiated RFPs, contract negotiations, contract renewals, supply chain consolidation, project support and is no small task for any team.  In addition to strategic vendor sourcing, vendor management includes analysis of pricing models, cost comparisons, breakeven analysis and return on investment models for transactions under consideration for product and/or service purchase decisions married with contract renewal decisions and contract expansion or contraction decisions.  Overlay this with day-to-day activities which include subcategory spend management, strategic sourcing, contract negotiations, performance management, renewal and optimization management and procurement consulting and supporting IT leaders and their initiatives.   Finally, supplier management has significant interfaces and engagement with the C-Suite CFO, COO, CTO, Business Leads and SVP’s.

Managing Compliance with Contractual Terms and Conditions and Vendor Management Score Cards

As part of supplier management and engagement with internal partners, one of the focus areas is to understand vendor performance, opportunities and concerns across your “vendor ecosystem” and the products and services purchased.  These focus areas should be summarized into agreed areas each with its own agreed weighted scale such as:

Performance: When the product or services are implemented do they actually behave or function as originally described per the contract and warranty Key Performance Indicators.  Obtain outage details to understand the root cause analysis.  Focus on the outages with significant downtime that impacted business performance.

SLAs and KPIs: Per the contracted Service Level Agreement define and track a measurable way of summarizing SLAs and KPIs ensuring the products and services inline with the agreed terms.

Supply order fulfillment capabilities: Measure how well are orders being fulfilled track the number of days from order to agreed completion date, whether services are shipped or delivered per the PO or SOW.

Vendor billing accuracy:  Work with finance to understand from purchase order, change order or disconnect submission, to supplier invoice is the supplier sending a correct invoice or are there lots of inconsistencies mistakes or incorrect amounts etc.

Pull these focus areas together into a supplier score card summary and work with leads internally across each of the noted areas i.e. Finance, Service Delivery, Procurement, Network Operations to obtain the truth, not their biased opinion, and work to produce a score either against an expected agreed baseline goal with your vendor or against the averages across other suppliers with similar products and services.

Vendor Workshops

As part of Vendor Management goals – develop a regular meeting cadence with your “strategic suppliers” and lead vendor management meetings including organizing and scheduling meetings, developing agendas and aligning appropriate stakeholders.  Leverage your supplier score card to form the basis of some of the topics to cover such as:

Vendor performance evaluation: develop and work together in partnership with your vendor to approve any action plans resulting from critical service performance failure issues.  Don’t just focus on the bad, focus on the good and works working and identify where the outliers are with goals of eliminating these issues.

Contract and Commercial Competitiveness:  Discuss and agree benchmarking timelines or re-visit any re-pricing requirements as a result of a change in demand or market shift in the price of goods, make use of existing contractual mechanisms for cost/price change. Outline up and coming contract renewals, contract rationalizations, amendments, addendums and service modification requirements with the potential of expansion into broader strategic initiatives.

Vendor billing and internal audit obligations: Outline and discuss any billing issues and open disputes.  Work towards being these issues to resolution and fixing the cause so that do not continue to occur.

Current and future state network plans:  Prepare and manage annual category, subcategory and supplier level investments for products and services for reporting and inputs into IT budgeting and strategic planning process. Carveout time to discuss plans to transform or implement new technologies.  This gives your supplier a great opportunity to not only understand your goals and objectives but also present and sale their solution.

Bring It All Together

Working together in cohort with internal teams and your suppliers can lead to fruitful successful relationships that thrive.  Implementing a Vendor Management program with an outline of relationship expectations, goals and objects with guardrails that keep the relationship on track will be the keys to any successful vendor management program.  Your ability to build and manage relationship (e.g. intrapersonal skills, communication skills, problem solving etc.) across the organization coupled with your ability to influence multiple stakeholders with broad and varied business objectives must remain at the forefront.