Wake-Up Call! Business Agility Is Not a One-Man Game
In the current era, organisations are hardly self-sufficient, but part of a supply chain or at least relying on multiple suppliers. In transformations towards Business Agility, this means that the lack of inclusion of suppliers in such a transformation can become a deterring factor. In this article, we'll take you through five ways to mature and change the collaboration between client and supplier, but also provide you with possible collaborations with new suppliers.
In our transformations, we see that much effort goes into increasing the client's ‘Business Agility’. Business Agility is the ability of an organization to quickly react to market developments and changing client needs to continuously be at a competitive advantage. This requires the ability to quickly generate, validate and pivot on new ideas. Often, this means enhancing how our client can execute a strategy, reduce time-to-market, and increasing collaboration between the organization's operations and development sides. Our experience teaches us that such a journey attracts much of our client's attention. However, we should not underestimate that in the current era, organizations are hardly self-sufficient. They are often part of a supply chain or rely on one or multiple suppliers. This brings up the question if organizations are Agile enough if they do not include their suppliers in their transformation. In other words, if we strengthen one link in a chain, will the whole chain be more robust?
We think the contrary is true; if you keep your old client-supplier relationship while changing your organization, the relationship will, in the end, work counterproductive in your ambition to achieve Business Agility; it will only form an anchor in your journey towards Business Agility. The ideal state would be that the organization periodically looks ahead with its suppliers, plan together what is needed, and exchange resources and experiences where possible to increase knowledge and ensure collectively maximized power. However, this situation is complex and somewhat extensive, and not every supplier is fit to participate in such a collaboration. Therefore, this article will give you five simple ways to mature and change your methods of collaborating with your supplier to strengthen the different links in the chain. It can be read both as a growth model in which relationships can grow and as a model to see what kind of agreements you can make with new suppliers.
Starting the conversation
What seems to be a tiny step is a significant change for traditional contract management and client-supplier relationships. As most client-supplier relationships exist in contracts, where Service Level Agreements (SLA) trumps communication, the room for true collaboration is often limited. You can imagine that SLA are time-intensive and therefore not the main ingredient for Business Agility. Based on the third principle of the Agile Manifesto, "Customer Collaboration over Contract Negotiation," we seek to spark the collaboration by starting the conversation. Easy improvements such as knowing the availability of developers, scheduled maintenance and launches, or shifting deadlines result from open communication. With our clients, we see that easy solutions like these will bring the quickest results, and we advise you to put this into practice as soon as possible. This can be applied to every supplier but will most likely be sufficient for suppliers that only deliver an occasional service or product to your organization.
The lack of transparency between client and supplier can be a limiting factor. Especially with suppliers that have regular releases of significance, where the client must act as well, the big unknown of when such a release is coming and the absence of estimation of how much work will follow from it has an impact on the planning abilities. Therefore, we call upon transparency. We can safely assume that both organizations have a general roadmap available, in which the client describes the desired future state and the point where the supplier wants to develop his product/service. The next step is to share these. This practice perfectly suits suppliers with changing service intensity, for example, a recruitment supplier. Regularly comparing roadmaps can help foresee when a higher intensity is needed. The experience shows that this also opens opportunities to have additional conversations about future collaborations, as the supplier gains insights into the direction the client wants to move and starts including his customer in his product development (pretty Agile, huh?).
Joining the cadence
If the relationship starts to strengthen or many dependencies exist between the client and the supplier, sharing the roadmaps only will not suffice anymore. Joining the quarterly planning event will allow both organizations to manage these dependencies and changes that arise from the roadmaps and, in the end, have a better idea of what and when to expect in the coming quarter. Providing the roadmap and attending the quarterly planning event regularly moves the supplier to work in cadence. Even if the supplier doesn't work in an Agile fashion, executing Sprints and releasing in small batches, the critical principle of quarterly planning, managing dependencies, and quickly responding to change through open and transparent communication will still bring both organizations much value. In practice, we often see that the client and supplier arrange regular meetups or working sessions during the quarter to tackle any early impediments. You want to consider this practice when you closely collaborate with your supplier, but not on a day-to-day basis; for example, the client requesting new functionalities on an application at the supplier that provides the application.
Sometimes the relationship becomes or already is mature enough that supplier and client are increasingly looking to improve one another. Based on trust and mutual understanding, both organizations can agree to exchange expertise and resources to achieve this. Initiatives that we introduced to our clients are, for example:
- Temporarily positioning a team in the counterpart's organization to learn and work there on a day-to-day basis
- Organizing regular meetups to tackle cases together
- Sharing specific knowledge
This agreement aims to strengthen both parties' relationships and is also the start of creating your network of suppliers. It would be best if you considered this practice with suppliers that provide daily services for a more extended period. For example, suppliers that will build and manage platforms or long-term sourcing of people or products. However, before making such arrangements, it is essential to create a shared vision of success between all parties and ensure alignment on interests and input of resources; a rowing boat only goes forward if everybody rows in the same direction.
Creating the network
Until now, we are still focusing on single relationships between client and supplier, but if we want to strengthen all the different links in the chain, we can create horizontal connections between already existing relationships. By allowing and enabling other suppliers to join forces in periodically planning, sharing practices, knowledge, or resources, they can also provide additional input. It may also improve how they run their operations based on the information of other parties. You want to initiate this when multiple suppliers benefit from working together. Be aware that, at first, parties may be reluctant to open their organization for others to learn and possibly take advantage of information. Therefore, it is critical to define the goal and the importance of this initiative, but also to make sure that parties that join the network are there to provide and not there as freeriders.
Business Agility begins with your journey but catalyzes by the inclusion of your suppliers. After reading this article, you might conclude that not every client-supplier relationship is significant or mature enough to make such investments. And we still agree! Our advice would be to look where and with whom you can implement the different practices and take it from there, start the conversation and look for the possibilities. We, most definitely, are looking forward to hearing about your experiences and will always be open to discuss or think along on this road.