We understand how comfortable and easy it can be to work with a supplier with whom you have a long-standing relationship. So many companies avoid re-evaluating long-standing associations for this and a variety of other reasons.

However, we see great benefits in taking a closer look at these arrangements rather than staying in your comfort zone. You need to ensure that your business still receives the same level of quality and value as when you started your relationship.

The better you know your suppliers – and, more importantly, the better they know you – the more you will benefit from top-notch services, special rates and better conditions.

Reasons to re-evaluate a relationship with a supplier include the following:

• The vendor does not provide industry-specific solutions for your business.
• The supplier does not offer the latest solutions available.
• The seller has changed personnel.
• These are all valid reasons to see what other options are available for your business.

Supplier management: best practices

Before choosing a partner, find out about the health of their business and whether they have a bad reputation with the companies and people they have done business with. Are they growing or losing employees (this can give a clear indication of how your partnership will go) and are they offering services that will really benefit your organization?

You also need to have a clear understanding of what both parties expect from each other. Know who you will be working with and what each team member’s role will be. Understand how much “lifting” you need to do. If you end up doing more work than you pay for – if, for example, you bring services and solutions to the table that you want the vendor to implement – ​​you definitely need to re-evaluate the deal.

Continuously monitor and track performance. Set up key performance indicators (KPIs) and use tools, such as a dashboard, to ensure you stay on top of how your suppliers are meeting (or not meeting) your standards and delivering value to you .

Reassess annually. Businesses evolve, change and grow, and you won’t always need the suppliers you have today, and they won’t always be able to meet your needs. We understand that employers often stick with one provider because they’re comfortable and they’ve been with them “lifelong,” but we’ve found that using this approach does an organization a disservice.

Case Study: Benefits Broker

We were referred to a medium-sized company in North Bay by a third-party human resources consultant. The employer had worked with its benefits broker for 20 years and was comfortable with it. Initially, we performed a compliance audit of their benefits program and found several areas where the company was non-compliant.

From there, we analyzed their systems and processes to determine which were outdated and inefficient. Based on our findings, we were able to demonstrate that the relationship no longer served the employer’s needs. This deep dive into their practices ultimately saved the client time, money and efficiency.

Pay

Businesses may outgrow payroll vendors or choose one payroll vendor that is too large to provide adequate service and support for what is needed. Payroll is often a hot topic when we talk to employers about it, but many don’t want to undertake the search for a new provider because they think it will take too much time and energy.

However, by not assessing what is working and what is still needed, a business can risk having bigger problems, especially when compliance penalties unexpectedly show up.

When there is a disconnect between a company and its supplier, the relationship must be a priority, either trying to fix what is not working or making a decision that will protect the best interests of the company. This makes things much easier for the long term business.

Technology

Having a partner who understands the need for up-to-date technology is essential. If there’s one thing the pandemic has reminded us of, it’s that change, sometimes very rapid, is needed. Whether or not you need computers, IT support, or a special machine to create a widget, you want to work with someone who understands your business and has the right technology to support it.

The question you should ask yourself when reassessing a vendor relationship is: Is there anything I’m not doing that I should be doing to be more effective?

A successful relationship includes great communication, and supplier partnerships are no different. We’ve seen comfort keep many businesses in dangerous territory, but while they can understand the need to go ahead and seek out high-end vendors who specialize in their industry, they’re often shocked to see what services and what assistance they weren’t okay before. It can’t hurt to just watch.