Often an organization may need to switch from one supplier to another. The existing supplier’s quality of service may be dipping or the technology product they’re offering no longer serves the business needs or the organization is growing and the supplier isn’t capable of scaling their services to keep up with it. Whatever be the reason, transitioning from one supplier to another is not easy. An organization should have a sourcing transition plan just as it needs a disaster recovery plan. When exiting a contract with a supplier, it is important to focus more on what the organization aims to achieve in the first place. When the goal is known, it becomes clear what the existing service provider is not able to offer. It also makes clear what the organization needs to seek in a new supplier or a new product. Ideally, a contract should take into account the changes that may come across in the organization in the future and it should prepare both parties to adapt to these changes and work together to achieve the required outcomes. But it is not always possible for the supplier to adapt and evolve. That is when a transition becomes necessary. A successful sourcing transition requires four key considerations: assessing the organization’s requirements, minimizing disruption during the transition, ensuring that any skills, knowledge, technology, or manpower lost in the transition are sufficiently replaced by the new supplier, and monitoring to ensure that the new suppliers are delivering the desired outcomes.
01. Define Business Requirements: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
02. Transition Strategy: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
03. Strong Governance: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
04. Challenges Faced: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
05. Minimizing Disruption: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
06. Knowledge Transfer: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
07. Monitor New Supplier: departmental SWOT analysis; strategy research & development. 1 Month
01. Define Business Requirements: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
02. Transition Strategy: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
03. Strong Governance: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
04. Challenges Faced: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
05. Minimizing Disruption: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
06. Knowledge Transfer: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
07. Monitor New Supplier: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
01. Create a task on your calendar, to be completed within the next month, to analyze Define Business Requirements.
02. Create a task on your calendar, to be completed within the next month, to analyze Transition Strategy.
03. Create a task on your calendar, to be completed within the next month, to analyze Strong Governance.
04. Create a task on your calendar, to be completed within the next month, to analyze Challenges Faced.
05. Create a task on your calendar, to be completed within the next month, to analyze Minimizing Disruption.
06. Create a task on your calendar, to be completed within the next month, to analyze Knowledge Transfer.
07. Create a task on your calendar, to be completed within the next month, to analyze Monitor New Supplier.
The process of switching from an established incumbent vendor to a new one is one of the more challenging (and frequent) challenges that procurement professionals frequently encounter. All levels of your organization will be impacted by this choice, and more often than not, a lack of compliance at one level has the power to sabotage the entire endeavor. This workshop’s goal is to show you how to anticipate these potential obstacles, respond to them, and position your business to successfully navigate this period of transformation.
Buy-In at Management’s Level:
It might be challenging to get authorisation to switch from a long-standing incumbent vendor. You’ll frequently need to give your leadership group with a solid, persuading case study. In all levels of business, the adage “if it ain’t broke, don’t change it” holds true. Be prepared to offer a clear route that can result in considerable savings and advantages to the organization’s total cost of ownership if this move isn’t the result of subpar vendor performance. Gaining the support and affirmation of this group can be accomplished in large part by making a good impact on the bottom line.
It’s crucial to maintain open lines of communication and transparency during the transition once the new vendor has been accepted. In the past, keeping management at ease has been mostly accomplished by providing them with an implementation roadmap that highlights important milestones. Once the roadmap has been given, it should be thought about providing updates via biweekly (or monthly) meetings to share any revisions as vendor implementation progresses.
Buy-In at the Local Level:
Anytime a vendor transition is carried out, it’s critical to have clear and unambiguous communications because this endeavor will only be as successful as the IT team makes it. This endeavor will fall flat on its face if your local buyers and IT staff aren’t adequately instructed and trained on how to engage with the new vendor and make purchases.
First and foremost, comprehensive transparency throughout the entire process contributes to building local respect and pride. For instance, implementation is a difficult procedure that frequently encounters numerous unanticipated challenges. It will help foster ownership and teamwork at the local level to be upfront about these potential issues and to ask for input and solutions at the outset.
Structured communication channels can be used to increase transparency and encourage compliance.
For instance, doing this task successfully has been demonstrated to depend on these two processes. The dissemination of internal memoranda outlining this change is the first phase, followed by in-person meetings with account managers from the new vendor, which is the second step. In addition to establishing a clear channel of communication to help restate the main themes mentioned inside the internal memo, the face-to-face encounter will aid in building relationships.
Although there isn’t a clear-cut approach for switching vendors, these steps should assist point your team and broader project in the proper direction. Just to be clear, openness and communication will be essential to making sure that implementation is effective.
key steps to vendor transition (and exit) success
There are critical issues to take into account when switching service providers, each of which is crucial to the success of your future service delivery.
1. Determine the needs and complexity of the project or service in detail.
How well do you comprehend the business results you hope to achieve? Are they fully expressed and quantified (within reason)? Do you, on the other hand, have clarity regarding the operational facets of the service you wish to transfer to another supplier in order to attain those results?
It is crucial that you conduct a thorough analysis of how the service is currently given, monitored, and maintained when that service or project is transferred to another provider in order to fully comprehend the complicated workings of all outsourced services or complex projects. Then, to aid in clarity of interpretation and prevent internal or external misconceptions, record it using process maps and use cases.
In order to raise standards and save costs, it is crucial to evaluate how effective the current process and processes have been as well as how they might be improved. This can only be accomplished by maintaining the correct talent with adequate thoughtfulness and awareness for the workings of the organization in order to recognize what’s best for the service provided today and into the future. This is necessary to ensure that everyone involved has a clear understanding of the situation and to offer them the knowledge they need to encourage innovation that could lead to the creation of additional value.
It’s crucial that oversight be properly preserved after you’ve transferred responsibilities to your new service provider. Some of an organization’s technical skills should have been kept as part of an intelligent client role, however this practice has been known to occur (ICF). Instead, in order to function without the proper critical-friend challenge, they rely too heavily on their outsourced service providers. While it is not the client’s (or service users’) place to dictate to the provider “how” to run its services, it is not in the client’s best interest to allow their own internal expertise to wane to the point where management of the outsourced service becomes significantly diluted and less effective.
We would always advise a client to keep a team of ICF experts with the necessary resources on staff to maintain the necessary level of knowledge and skill.
2. Strong governance prevails.
The success of any handover depends critically on your ability to control every piece on your unique transition chessboard. It is crucial to cultivate the proper kinds of cordial connections with departing providers so that they voluntarily share knowledge that may have taken them years to accumulate and procedures that may have required a lot of trial and error to perfect. Your new staff will be able to get started right away and limit disturbance throughout the move if you can foster a collaborative environment. A strong commitment to open communication, the correct client-side staff, and a clearly defined hierarchy are necessary for this.
An Asian-headquartered chemical manufacturing organization with an 80-year history and facilities in over 20 countries wants to assess IT risks for its operations in the Americas.
The company’s American IT team attended an Info-Tech session with the express objectives of learning more about IT risk management, identifying important issues, formulating plans to decrease priority risks, and improving communication with executive leadership about IT risk issues.
Summary & Success
• Consolidated IT’s “suspicions” about risk issues into a single, concrete working document.
• Developed a substantial working list of risk mitigation opportunities.
• Helped gain team buy-in and overall organizational commitment for more intensive risk management activity going forward.
3. Analyze the resources needed for the transformation.
A service transfer to a new provider might be successful or unsuccessful depending on how well it is planned in advance. By the time the transition occurs, it is critical to have adequately resourced, gathered