Selecting and leveraging suppliers

Abstract

The evidence we have accumulated shows clearly: organizations that have the CEO and a multidisciplinary team involved in sourcing strategy and configuration make more effective decisions. The CEO ensures the identification of clear business needs and objectives, and the availability of in-house IT sourcing capabilities and resources. As we demonstrated in Chapter 1, the CEO brings brain and influence, but also responsibility to key risk areas, because getting sourcing strategy and selection of supplier(s) wrong can hit share price, disable business strategy, as well as being very costly operationally. Our first chapter focused on the CEO role and strategic advantage, the second on the power of relationships. In this chapter we focus on the supplier selection process, and acquiring the right supplier people and competencies.

I see myself in competition with all its other clients for the supplier’s prime attention and resources.

— John Yard, CIO UK Inland Revenue

It’s unwise to pay too much, but it’s unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do …

— John Ruskin