How to cultivate a partnership approach with your supplier How to cultivate a partnership approach with your supplier

How to cultivate a partnership approach with your supplier
16 Mar 2018

If you are worried about your ability to implement a global payroll system, why not consider something different - a true partnership approach with your global payroll vendor? This article will explain how this kind of approach can work to your benefit. 

What is a partnership approach?

Adopting a true partnership approach means developing a close relationship with one particular global supplier. There is often a mutual understanding that you will not subject them to a competitive tender as long as they provide you with attractive pricing and great service. 

How does this differ from more traditional approaches?

The traditional procurement model for global payroll typically consists of a request for quotation, long-list, short-list and beauty parade to select a winning provider. This approach allows you to identify a vendor that meets your needs at a competitive price. It also ensures you comply with your corporate procurement policies, which helps your project gain internal approval. 

What is the downside of the traditional approach?

The traditional approach has a major downside. In a competitive tender, your providers are understandably always in full-on sales mode. This means they may not be inclined to volunteer information that could be helpful to you but which casts them in a negative light. This means you are less likely to gain a rounded picture of your chosen vendor and their capabilities.

For example, you may not have the opportunity to obtain in-depth briefings about their offerings or quiz their internal experts on gaps and future developments. It may not be possible to gain an in-depth understanding of their shared service facilities or a true insight into the benefits you could realistically achieve.

Another issue is that vendors will minimise any sales costs on their side if they are not confident of winning your business. The danger here is that you, as the client, spend a lot of time and energy focusing on features that will never be used. 

In what circumstances does it make sense to use a partnership approach?

If you are likely to opt for one particular supplier, there are few downsides to the partnership approach. This can happen based on a number of scenarios, for example, if there is only one provider that meets your needs. Or you have a strong existing relationship with a given vendor, which make it unlikely you would want to move. Or a key decision-maker has a clear supplier preference, for instance, your chief financial officr will only countenance using a particular provider.

In such cases, there are many benefits to be gained from openly partnering with your preferred vendor. These include:

  1. Obtaining a deeper understanding of their services

Your chosen supplier will be much more open about providing you with a detailed insight into their services. Global payroll is a complex business that takes time to fully understand. You may find you need to ask the same question twice before completely understanding the answer, but in a partnership, you can do exactly that. 

Your chosen vendor will be more inclined to give you a lot of time and access to its internal experts. This situation provides you with the time to find out what you need to, reflect on their responses and go back if you still have any knowledge gaps. 

  1. Enabling more realistic implementation plans

When genuine trust exists between you and your supplier, you can develop more robust and realistic implementation plans. Many projects suffer because clients do not understand the full resources required to implement global payroll properly.

But in a partnership relationship, your vendor is free to share their vast experience of client implementations in order to help you improve your project. They can advise if you need to fill any gaps in your support team, or if your rollout plans are realistic, for example. 

  1. Having more flexibility 

Global rollout plans are always prone to change. Sometimes what has been learned from your vendor can be used to help improve those plans. In a partnership approach, providers are likely to be more open and flexible about accommodating those changes.

  1. Gaining access to better client references 

Client references are a precious commodity for providers, but they tend to be wary of asking the same client to provide references on too many occasions. As a result, they only offer you their best reference sites if they are really confident of winning your business. 

Gaining access to the experience and knowledge of these reference sites is invaluable as it is the best way to test your project assumptions in advance. It will enable you to learn from organisations who have gone through similar experiences and establish whether your vendor really can deliver. It is also a good way to get some great tips to help you avoid making the same mistakes that others made before you.

How can you still obtain great pricing in this scenario?

An obvious question in this context is how to obtain great pricing if you are effectively locked into a single supplier? Just remember that, because it is you who is the client, you will always have significant leverage and can still always walk away. Importantly, however, never go ahead unless the business case works for you. 

 

John Galvin is founder and CEO of award-winning international expansion company Galvin International, which has offices in the US and UK. His firm helps clients expand globally by providing one-stop commercial and compliance services in more than 100 countries. John is a former multinational CFO with over 20 years of international commercial and finance experience, and was named Global Consultant of the Year 2016/17 at the inaugural Global Payroll Awards.

If you are worried about your ability to implement a global payroll system, why not consider something different - a true partnership approach with your global payroll vendor? This article will explain how this kind of approach can work to your benefit. 

What is a partnership approach?

Adopting a true partnership approach means developing a close relationship with one particular global supplier. There is often a mutual understanding that you will not subject them to a competitive tender as long as they provide you with attractive pricing and great service. 

How does this differ from more traditional approaches?

The traditional procurement model for global payroll typically consists of a request for quotation, long-list, short-list and beauty parade to select a winning provider. This approach allows you to identify a vendor that meets your needs at a competitive price. It also ensures you comply with your corporate procurement policies, which helps your project gain internal approval. 

What is the downside of the traditional approach?

The traditional approach has a major downside. In a competitive tender, your providers are understandably always in full-on sales mode. This means they may not be inclined to volunteer information that could be helpful to you but which casts them in a negative light. This means you are less likely to gain a rounded picture of your chosen vendor and their capabilities.

For example, you may not have the opportunity to obtain in-depth briefings about their offerings or quiz their internal experts on gaps and future developments. It may not be possible to gain an in-depth understanding of their shared service facilities or a true insight into the benefits you could realistically achieve.

Another issue is that vendors will minimise any sales costs on their side if they are not confident of winning your business. The danger here is that you, as the client, spend a lot of time and energy focusing on features that will never be used. 

In what circumstances does it make sense to use a partnership approach?

If you are likely to opt for one particular supplier, there are few downsides to the partnership approach. This can happen based on a number of scenarios, for example, if there is only one provider that meets your needs. Or you have a strong existing relationship with a given vendor, which make it unlikely you would want to move. Or a key decision-maker has a clear supplier preference, for instance, your chief financial officr will only countenance using a particular provider.

In such cases, there are many benefits to be gained from openly partnering with your preferred vendor. These include:

  1. Obtaining a deeper understanding of their services

Your chosen supplier will be much more open about providing you with a detailed insight into their services. Global payroll is a complex business that takes time to fully understand. You may find you need to ask the same question twice before completely understanding the answer, but in a partnership, you can do exactly that. 

Your chosen vendor will be more inclined to give you a lot of time and access to its internal experts. This situation provides you with the time to find out what you need to, reflect on their responses and go back if you still have any knowledge gaps. 

  1. Enabling more realistic implementation plans

When genuine trust exists between you and your supplier, you can develop more robust and realistic implementation plans. Many projects suffer because clients do not understand the full resources required to implement global payroll properly.

But in a partnership relationship, your vendor is free to share their vast experience of client implementations in order to help you improve your project. They can advise if you need to fill any gaps in your support team, or if your rollout plans are realistic, for example. 

  1. Having more flexibility 

Global rollout plans are always prone to change. Sometimes what has been learned from your vendor can be used to help improve those plans. In a partnership approach, providers are likely to be more open and flexible about accommodating those changes.

  1. Gaining access to better client references 

Client references are a precious commodity for providers, but they tend to be wary of asking the same client to provide references on too many occasions. As a result, they only offer you their best reference sites if they are really confident of winning your business. 

Gaining access to the experience and knowledge of these reference sites is invaluable as it is the best way to test your project assumptions in advance. It will enable you to learn from organisations who have gone through similar experiences and establish whether your vendor really can deliver. It is also a good way to get some great tips to help you avoid making the same mistakes that others made before you.

How can you still obtain great pricing in this scenario?

An obvious question in this context is how to obtain great pricing if you are effectively locked into a single supplier? Just remember that, because it is you who is the client, you will always have significant leverage and can still always walk away. Importantly, however, never go ahead unless the business case works for you. 

 

John Galvin is founder and CEO of award-winning international expansion company Galvin International, which has offices in the US and UK. His firm helps clients expand globally by providing one-stop commercial and compliance services in more than 100 countries. John is a former multinational CFO with over 20 years of international commercial and finance experience, and was named Global Consultant of the Year 2016/17 at the inaugural Global Payroll Awards.