What is Supplier Identification and Why is it Crucial in the IT & Telecom Industry?
The growing IT & telecom industry has experienced a massive transformation over recent decades, and the advent of 5G, rising prevalence of remote work, and digital impact of the COVID-19 pandemic have propelled further change in the industry. Companies must employ sustainable solutions and data-driven strategies including, supplier identification and selection, strategic procurement, and benchmarking to efficiently capitalize on the various growth opportunities without losing traction due to the rapidly evolving market. The need for a diligent, collaborative, and supportive strategic partner has become increasingly evident through the transformation of the industry, and supplier identification helps companies ensure that their potential partners meet rigid performance metrics, reduce losses, enable sustainable growth, and provide a strong, cohesive business relationship. In the IT & telecom industry, the pace of change leads companies to require major hardware, software, and network service changes on a constant basis, leading to the rising need for good partners. It is crucial for industry players to learn the importance and various benefits of supplier identification in their market.
What is the Importance of Supplier Identification in the IT & Telecom Industry?
Controlling Expenses: Having a robust and cost-effective partnership can significantly reduce unnecessary expenses, enable the employment of various cost-reduction strategies, and help the company significantly improve savings. Additionally, the supplier identification process helps companies choose partners that offer fair and achievable prices, conduct fair business practices, and maintain cost-effective operations within their company and with strategic partners. A lack of trust or reliability on partners can lead to various departments and professionals making out-of-contract and maverick purchases due to dissatisfaction with the supplier’s offerings and services. As companies attempt to survive in the highly challenging industry, trust and controlled expenses are imperative to sustainable growth.
Improved Decision-Making: Evaluating the market, gaining a comprehensive understanding of various factors, developing the right strategies, and making the ideal decisions requires expertise, data, collaboration, and different perspectives. Through the supplier identification process, companies can ensure that their potential partners are capable of meeting these demands, matching their expectations, and providing impeccable strategic support. Additionally, the process helps companies make an improved decision regarding their partners by clearly stipulating all expectations, needs, and objectives. This process also helps suppliers and companies develop a strong, collaborative platform for their future relationships, and helps build trust and transparency.
Achieving Targets: In a growing industry such as IT & telecom, companies can often struggle to keep pace with their competitors, consumers’ demands, and market trends. However, a strong and supportive partner can significantly contribute to these challenges and mitigate various obstacles. Suppliers are often privy to major technological trends and changes before manufacturers and retailers, and can provide their partners with data-driven insights into the evolution of the market while providing them with the ideal products, services, and strategies to stay ahead of the curve and achieve their business goals. Supplier identification involves gauging the level of understanding, comprehension, and awareness a potential partner has regarding their industry, making it a more viable and effective selection process for CPOs.
Strategic Cohesion: Choosing the right supplier or business partner requires a comprehensive understanding of one’s own business goals and targets, as well as the suppliers’ strategic aims. During the supplier identification process, companies are required to gain and express a clear understanding of their strategic objectives, expectations, and needs, which directly translates into developing a partnership rooted in transparency, and helps companies choose partners that can help achieve the same. Further, it also helps companies effectively evaluate their potential partners’ strategic goals, make an objective comparison, and choose a partner whose targets align with theirs. In doing so, both parties can successfully achieve their goals, while enabling the other party to do the same, and overcome the impact of the rapidly changing market.
Improved Relationships: During the supplier identification process, companies are encouraged to maintain a clear idea of their requirements and expectations from potential partners, while maintaining transparency regarding business objectives, capabilities, and offerings. If efficiently reciprocated, the transparency between both parties establishes a robust foundation based on honesty and trust that is well-founded for future partnerships. Additionally, maintaining transparency regarding strategic goals can help companies align their needs, develop a sustainable relationship, and create strategies that help both parties achieve their targets efficiently. This can also enable both parties to improve individual operations, encourage stakeholders’ support, and improve customer satisfaction significantly, leading to profitability for both parties.
In 2020, the demand for fast networks, capable IT solutions, and differentiated network service providers rose exponentially due to national lockdowns, social distancing, and other policies announced by nations due to the COVID-19 pandemic. As healthcare matters worsened, the IT & telecom industry players sought to keep pace with the rapidly evolving market by employing lasting solutions and robust partnerships. An IT service provider based out of North America and offering services across the US and Canada witnessed a rapid surge in demand, but could not deliver the required hardware to improve their capacity due to a partners’ lack of risk management plans. This led to significant monetary losses, and the company began to lose ground to new competitors. To address this issue and develop a partnership with a supplier that followed similar policies, the company approached SpendEdge and chose to leverage our expertise in supplier identification. Our experts provided the company with actionable insights that enabled the identification and selection of an optimal partner who employed similar robust risk management strategies, and had aligned business targets and goals. With the new partnership, the service provider successfully regained their market share and leadership position within the industry, and coasted through the pandemic with ease, while increasing profitability substantially.