SI Review: August 2012

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Straight Talk From the Customer

Going the Extra Mile

Suppliers’ out-of-the-box thinking boosts relationships, business

By Kirk Reade

As a global strategist for IBM, I am responsible for developing supplier sourcing strategies for contingent labor worldwide and working closely with our geography leads to assure our internal clients’ needs are met. We are an internally managed MSP with our own VMS tool.

We have more than $6 billion in spend annually and have built strong relationships with many suppliers across the globe. However, with the multiple lines of business within IBM and the demands from internal clients and external customers, we are always looking for unique solutions to interesting problems that arise.

As one of our suppliers likes to say, “Let’s jump off the cliff together and hopefully we will have it figured out before we all hit bottom.” That is the kind of relationship that we are looking for. And, I have two examples of this kind of relationship.

‘We’ll Figure It Out’

We had a contingent labor sourcing operation in Denmark that was internally managed, and it was determined that the best course of action was to take that operation and turn it over to a supplier to own. We reached out to several suppliers with experience in Denmark and in Europe, but for several reasons, none of them could provide the solution we were looking for.

I then reached out to a supplier with which we already had a relationship. This company did not have a current legal entity in Denmark and no corporate vision to grow there, but its management team said that if IBM needed them there, they would figure it out. Despite those assurances, we were concerned with the idea of using a supplier that has no history in Denmark, and clearly has no history with our internal clients in the region.

We decided to have the key leaders from Denmark come to the U.S. to meet our supplier at its corporate headquarters for a two-day workshop on how they would set up operations and perform as required. After those two days, everyone was on board with the concepts laid out and the timeline for a successful transition of the operations to the supplier. Two weeks later we all were in Copenhagen, Denmark, finalizing the agreement.

Today, that supplier is the single supplier for the four Nordics countries and remains on our key strategic suppliers list globally, with operations in North America, Europe and India. Many of the initial program concepts remain in place today, but we found much of it needed to change over time, and together we worked to find the right solution for our internal clients. The supplier’s flexibility and creativity is what won the day, and it continues to date.

Unexpected Solution

We had a critical need to support an IT call center in a smaller city in Japan where talent was in short supply. Our Japanese procurement team, our internal client and our global services sourcing team met to evaluate the situation.

The supplier pitched a way out that was not on anyone’s mind: hire and train a resource pool out of the Philippines. The three-month training would include necessary Japanese language skills, as well as the technical training necessary to perform the job. With the supplier’s global footprint and its sourcing footprint both inside and out of Japan, there was a strong case for this solution.

The program was implemented and the supplier, working closely with the internal client, structured the training program and hired the first group of call center workers. Today, the solution has proven to be successful not only on the delivery of skill but on the overall cost to the program. Again, having a supplier bring us an idea we would have missed, and delivering on that concept, is what we are looking for from our suppliers.

These are just two examples among many that I have seen over the past 10 years. We are proud to work with some great suppliers over the world. While the day-to-day CW staffing work will remain a critical part of our global sourcing strategy, we are always looking for new and interesting ideas on how to do this better and find solutions that fit rare requirements. The suppliers that can step up to the plate and work with us to figure it out are the ones we will look to grow with in the future.

Kirk Reade is global strategist for IBM’s Subcontract Services Sourcing Council.

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