Every business needs great suppliers in order to be able to scale up successfully. Regardless of your current business position, your team’s ability to select the very best suppliers to build your technology function is absolutely vital.
The success of a business is determined by the quality of the suppliers it relies on. Trusted and reliable suppliers can bring a wealth of great value and support. It’s an area that is never more important than when you first start to build your technology function and get that initial idea into the market.
However, it also applies to established businesses who are looking to build new products.
I believe there are 12 areas to consider when trying to choose the very best supplier for your business.
Let’s take a look:
1. Know what you want
The key to working with great suppliers is for them to be able to fully understand your vision. It’s then being able to implement that fully to produce a successful end outcome. The way to ensure this happens is to be really clear about your exact requirements from the outset.
It’s extremely important that from the very start you write everything down and create visuals where appropriate. This ensures that what you’re wanting to achieve is explicitly communicated to your supplier, before a contract is drawn up.
Once you’re happy that the supplier fully understands the brief and you’re happy with their ways of working, draw up the key objectives and milestones in the contract. This keeps everything transparent.
By doing this, your idea and vision won’t get lost in the initial enthusiasm and eagerness to get the project moving forward.
Great suppliers will embrace this way of working and respect your professionalism and understanding of how to achieve excellence from the start.
2. Be aware of the intentions behind suppliers offering lots of free work
Some suppliers offer free work as part of a package to entice you on board. This can sometimes work really well, for example, if they’re giving you a taster in the spirit of the proposal before you financially commit. But if it feels like it’s more than an initial taster, it’s critically important that you ask yourself exactly why they’re offering to work for free.
Is it because they need to pick up more work? If this is the case, you need to think about why they aren’t busier. Busy, successful, established companies won’t need to offer this, so question a supplier if they offer a lot of work for free.
It may be that they’re new and trying to increase their customer base but it’s always worth investigating the company further by doing a credit check and an online search for reviews.
3. Get referrals
Investing in a supplier is often a large financial commitment so don’t jump in before you’ve really researched their background.
It’s important that you get honest feedback to be able to make those key decisions. An easy way to do this is to contact other people who have used them before. By directly approaching customers, you’re able to quickly validate the credentials of the supplier in question.
If the supplier has a glowing report from previous customers, they’re more likely to do a great job for you.
4. Build redundancy into your suppliers
People often think that the fewer suppliers you use, the smoother the process will be, but this isn’t always the case.
Consider using multiple suppliers across different delivery platforms to ensure that if something goes wrong in one area, it won’t affect the entire project.
If one supplier fails, you already have another supplier lined up to potentially step in and deliver the project.
By building redundancy into your suppliers, you’re not only protecting the project delivery, but also minimising the financial risk.
5. Document the way you want to work
Clarity is key!
In order to get the best suppliers, you need to understand them as much as they understand you. Be crystal clear from the outset about organisation and logistics because if these aren’t set in stone early, there will be problems further down the line.
- What hours do you want to work?
- How often do you want status updates?
- When do you want to meet?
- If they’re based in a different country, can they accommodate meetings at times to suit your time zone?
In order for projects to remain successfully on track, I believe you should have a call with your suppliers at least twice a week and be fully engaged in active conversation for regular daily updates.
Constant communication is the key to successful end outcomes.
6. Ask what they need from you
This may seem like an odd question at first, but it’s really important that you ask suppliers exactly what they are expecting from you. This gives you the chance to see that they understand you and your needs for the project.
The truth is, suppliers need access to your team’s knowledge and expertise in order to successfully deliver a project.
Suppliers can’t work in black holes. By this I mean that suppliers must fully appreciate the people and resources that you’ll need to provide to them to carry out the project, and equally you need to know what they need in order for you to plan and budget accordingly.
If there’s a mature and considered response when you raise the question of what you should have in place in order for them to proceed, it will show you that they’re confident in working in the way you need them to. It also helps to validate whether this supplier could be a great culture fit for the project you want to deliver.
7. Have a trusted advisor to validate quality
How can you ensure the quality of the product you’ve produced? The answer is to find a trusted advisor who can give you valuable and, crucially, unbiased, feedback.
Suppliers may provide you with a great product, but you need to ensure that it’s been well designed and coded before it’s then delivered to your technology function.
A trusted advisor will be able to give you the honest feedback you need in a few hours a month or more, depending on your needs.
This process is something that can be done in a small test project with the supplier before the main project is agreed, or if the project is already underway, at the point of delivery and before implementation into your business.
Either way, it gives you a safety net and that’s really important.
8. Agree service levels in advance
It’s vital that the service levels that you expect after the work has been delivered are clearly written in the initial contract. This not only avoids confusion, but it gives you a solid platform to ensure that problems are addressed in the time frames originally agreed.
Here’s a good rule of thumb to use for clarity:
- Low level issue: resolved in a week
- Medium level issue: resolved in a day
- High priority issue: delivered in half a day,
9. Allow agility in the project
Let’s focus on what this really means when it comes to suppliers. In essence, it comes down to whether you choose to go down a fixed price route or a more flexible rolling contract.
Fixed prices can be great if they’re a good deal for everyone, but it doesn’t give you the agility to move and change directions if the project changes after the fixed contract has begun.
In all cases, link specific outcomes to specific milestones. Use these to then draw up a payment plan. This allows both sides to see how they’re delivering and payments are tracked against expenditure and value.
This is much easier with a flexible monthly payment plan. It’s not to say it can’t be implemented on a fixed term plan, but you’d need to speak to the supplier for individual terms as fixed fees are often used for specific purposes with little room for manoeuvre.
It’s often the case that the initial cost that you save on a fixed term contract is worth less than the increased productivity of having the ability to pivot and change direction if needed along the way.
10. Clarify what’s included
Don’t sign a contract until you’re absolutely clear on exactly what is going to be delivered, and when.
Clarify all the key delivery questions. Some important ones include:
- Who’s providing the design resource?
- Who’s managing the project?
- How much time do they need from you? (In my experience, double it!)
- What impact will it have on my business?
- If you’re working with an offshore team, will the logistics of this meet your needs?
11. Pay suppliers in advance and pay them well
It’s important that the supplier is quoting a price that means you are the highest priority. Or in other words, be aware if there are certain client tiers/rankings and know where you stand (ideally as their main priority).
It’s important that you are in the forefront of the supplier’s sights and they make your business a priority. From your point of view, you need to make sure that they are being paid at a level which makes them responsible to you and crucially, you have invested enough for your business to get the priority it needs and deserves.
12. Get the ‘value’ feeling
Short test projects and early engagement with the supplier is a great way to find out whether they are someone you want to work with.
If they perform well, it makes you feel good that they’re bringing lots of value to the business and the business will achieve because of this.
I hope you’ve enjoyed today’s topic. It’s all about giving you the tools and advice to make sure that you are equipped with the knowledge to choose the very best suppliers.
Here’s a video of me talking about the topic in more detail:
Please let me know about your suppliers and how they’re helping to scale your business by messaging me over in my Facebook group.
My group page is full of helpful advice, as well as showcasing all of my previous blog posts and podcasts on rewiring your business for scale up success.
I also go live each week on a different topic.
Please also subscribe to my podcast – here’s the link to Itunes and you can also find it on most other podcast apps. I’d love you to leave a review!