How does Effective Supplier Identification Help BFSI Sector Players Improve Procurement?
Entering into a new era of banking and financial services, many industry players have recently realized the need for modern solutions, strategies, and approaches to tackle current and upcoming challenges efficiently. Attracting, engaging, and collaborating with the right suppliers is challenging and requires a substantial amount of due diligence, comprehensive plans, and research-driven decisions. Supplier identification is one such data-driven and detailed approach to ensuring efficient adaptation and growth in the BFSI sector, and has helped various industry leaders in recognizing and working with the ideal suppliers for their needs, strategic requirements, business goals, and sustainable growth. The process helps companies gain an exhaustive understanding of their expectations and needs from a potential partner, enables clear and effective negotiation, promotes collaborative growth, and provides parties with the necessary information to achieve sustainable success. It also helps companies successfully implement strategic procurement, develop robust partnerships, streamline supply chains, overcome industry risks, and create comprehensive procurement strategies.
What are Key Best Practices for Supplier Identification?
Spend Analysis: Having clear insight into all expenses, savings, and costs can help a company assure efficiency, and make business partnerships more informed and collaborative. Clarity regarding the current spend, budget, and forecasts can help companies understand their base cost and price expectations from a potential partner. Additionally, having a detailed spend analysis helps establish trust and transparency with stakeholders, between departments, and most importantly, with potential suppliers and vendors. This best practice also helps mitigate various risks and uncertainties during the supplier identification process, including potential budget, savings goals, profitability targets, and overall quantitative performance expectations.
Market Research: Understanding the market trends, changes, fluctuating dynamics, challenges, and risks is crucial to making well-informed business decisions, surpassing competitors, and developing beneficial terms of contract. It is crucial for businesses to have the capabilities required to closely analyze their market, and develop data-driven strategies, plans, and offers for potential suppliers and vendors. When entering a business deal or partnership, having an understanding of one’s own market, and the partner’s market is imperative to developing a fair, achievable, and efficient contract. A comprehensive understanding of the factors influencing the suppliers’ market and impacting the organizations’ markets can help minimize uncertainties, set realistic expectations, overcome industry risks, and prepare for all potential challenges.
Strategic Clarity: Entering into a partnership is challenging, requires comprehensive knowledge regarding the market and industry, and clarity regarding the company’s goals and targets. When a business is aiming to begin a new partnership, it is crucial to ensure that both potential partners are aiming towards similar success and have similar expectations. To successfully achieve this, the company must be certain of their strategic and business aspirations, the ideal path forward, their upcoming targets, and the future of the organization. When this clarity has been achieved, the company can utilize the information during the supplier identification process and find the suppliers, vendors, or partners that fit their requirements, and deliver as per their needs.
Predetermined Criteria: Maintaining a clear idea of company expectations and comparing all suppliers’ offerings on the same basis can be challenging. The ideal approach is to develop a set of predetermined criteria, as per the expectations deduced during the research and strategizing stages, and compare suppliers on that basis, to develop an equivalent and clear standard. While different potential partners may meet different metrics, standardization can help companies determine the ideal choice for their business. These metrics include cost, compliance rates, transparency, quality, business objectives, and any other criteria that would be relevant to the goals and targets of the company.
Building Credibility: Supplier identification is long-drawn and complex, and companies will often interact, discuss, and negotiate with multiple potential partners throughout the process. To maintain a transparent, robust, and potential partnership it is crucial for businesses to build credibility from the beginning, and encourage a strong relationship in every interaction. Building credibility also encourages patience, understanding, transparency, and better terms of contract in the case of a selected candidate. Additionally, in case an option is not selected, an established positive relationship may lead to a partnership later, and better insight into the suppliers’ market, expectations, and issues or risks, as well as provide a potential standby suppliers when needed.
The digital transformation of the BFSI sector left many old banks uncertain of their future and the best way to achieve success in the evolving market. Rising demand for digital interfaces and services, reducing dependence on traditional infrastructure and establishments, and evolving technologies made it increasingly challenging for companies to maintain success and market share. A leading private bank in the US faced a similar challenge and struggled to keep pace with the FinTech start ups across their states of operation. To identify the best suppliers and implement strategic procurement in their growing business, the bank approached SpendEdge and aimed to address their supply chain shortcomings. Our experts helped the company understand the optimal approach to the changing market atmosphere, provided expertise in the supplier identification process, and provided them with the information required to find and partner with the ideal partner. Entering a contract with the right partner helped the company find and adopt the most recent technologies, offer customers the most modern services, adopt an omnichannel approach, and reestablish their lead in the competitive financial market.