There are three characters in this article. The enterprise company, sometimes referred to as the client. The vendor, representing large suppliers and the SME, representing the vendors that provide specialized skills, learning and expertise needed by enterprise companies.
This year saw the launch of the UK Public Sector’s G-Cloud, a platform designed to improve economies of scale and innovation in government by allowing better access to a wider landscape of technologies and services from vendors (suppliers) often referred to as SMEs. The objective is to level the playing field and allow UK Government departments the opportunity to work with the growing populace of specialized vendors that will in turn help them deliver the change needed to ultimately serve the public in a more effective and efficient manner.
This year has also been one of growing skepticism by large enterprise companies about the sustainability and viability of looking to only a handful of large vendors to meet the needs of introducing new thinking and/or more specialized skills. The economic roller coaster in the EU, for example, has caused many large financial services companies to re-evaluate their investment in expensive strategy initiatives where millions were paid out but little innovation was achieved in transforming the business and IT to compete.
The trend towards leveraging frameworks, models and methodologies that introduce higher degrees of agility and lean thinking are growing and both enterprises and large vendors are looking to understand how they can make this work for them. What does all this mean in a time when large companies want to spend in order to innovate but are hesitant due to a lack of seeing how change will happen?
I regularly go back to one thing a client has said to me over and over;
“I want everyone (my vendors) doing what is right for me.”
This really says it all and makes the point simple to digest. Enterprise companies want their vendors to work together so that the objective is about serving the client needs and not the vendor’s P&L goals. It’s a bit unorthodox, I know, but as vendors isn’t that the reason we’re in business – to serve the client and to provide them with skills, competencies and learning that will help them achieve their goals?
The Sandbox is something I discuss with enterprise companies and colleagues often. It’s not a framework or a model, it’s a belief, an approach, an initiative and really a mindset of how we can improve our relationships and results as clients and vendors. The Sandbox is an analogy most people understand. The idea of children playing in a sandbox is accepted and expected. Yes, sometimes there are children in the sandbox at the playground that don’t play nice and tend to throw sand at the other children in order to do a land grab and take it over but for the most part everyone plays well or rather in their own area of the sandbox.
For enterprises, the Sandbox represents an opportunity to assess their vendors and their respective needs as an organization looking to cut costs, deliver better and faster, introduce new platforms, technologies and thinking and advance as best as possible; all by being more deliberate about shaping a Sandbox strategy that brings their vendors together and gets them leveraging each other’s strengths on behalf of the client to accelerate results.
A colleague of mine recently made the observation that the two main levers pulling at the client-vendor relationship are often price and sales. Clients want the best price, vendors want to make the best sale. Clients also want access to specialized skills and expertise and many of their large vendors don’t have these since it would be a detour from their existing business models, therefore clients often introduce new players in order to access this expertise. The more vendors on the field, the more challenges between them and it often translates into a negative impact for the client both financially and from a productivity perspective.
This “commercial strain”,while common, is often the catalyst for relationships that are challenged and not as productive as they can be. It is also the reason why vendors become territorial and protective about what they do with the client and for the client. The client ends up having to play vendor chess instead of having “everyone doing what is right for them”. Vendor management should be about building collaborative, strategic and leveraged relationships between vendors on the client’s behalf not only about processing contracts and resource management.
The Sandbox gives us some ideas and talking points that we can use to shape a better working relationship between all parties.
What the Sandbox means:
For the Enterprise:
- Access to the best thinking and skills available in the market
- Ability to gain expertise for their own people
- Getting their vendors to work alongside the SME and even introduce them into the equation
- Open and direct dialogue not influenced by the wrong behavior or objectives
- Remove the “serve two (or more) master” mindset that sometimes prevails
For the Vendor:
- Access to new thinking and skills without investing into a long-term approach that might not yield good results
- Help the client by introducing the SME through their commercial channel to ease the process and respond to the need
- Improved “trusted advisor” status by demonstrating the willingness to collaborate more on the client’s behalf
- Greater success of longer, more valuable engagements
- Faster achievement of marketable results to strengthen the brand
For the SME:
- Deliver faster, more valuable and tangible results for enterprises that need to respond more effectively to the market
- Ability to serve a larger enterprise audience
- Align with vendors that desire to innovate and grow their brand equity
- Demonstrate the value of the available expertise and learning that an SME can offer
- Build long-term, sustainable relationships and engagements with enterprises and vendors together
So how do we get there? It starts with a conversation and an evaluation. Maybe it begins with looking at the one project that “needs to be successful” and understanding how an approach that incorporates the right mix of experience and expertise just might bring a radical result. This could then become the blueprint for the next project and eventually a program of work.
I believe in the Sandbox approach because our team lives by it and has been involved in several examples of where it has worked very well. More importantly, the clients we serve want it as well and the desire for more of it is steadily growing into a need to have it.
See you in the Sandbox!