In the procurement situation, the focus is often on transition since it is so vital to be able to change supplier without interrupting the business. It is also important to make sure that the organisation can manage a transition process in addition to the day-to-day business operation.
Normally, the suppliers have a well-polished message with a proven delivery model, clearly defined control points, good references, well-developed tools and an aggressive time plan. The client’s responsibilities in the project are often less explicit in order to strengthen the supplier´s position in the procurement process.
Then, when the client finally decides to change supplier, the moment of truth has come. In our experience, the described transition process is a challenge in many cases and it must be carefully planned and handled with a great deal of respect. Technology often fails, the project time plan isn´t kept, the project turns out to be more expensive than planned and there are too many compromises. As a customer you don´t want to admit your mistakes and return to your previous supplier for a new contract period.
There are three major reasons for the problems we find in the transition phase: the supplier has the wrong project manager, the customer has an unrealistic expectation that the supplier fixes everything, and the customer’s lack of awareness that the governance process already starts in the transition project. The most common mistake with the project manager is lack of senior management involvement in his/her own organisation. Also, the project manager often underestimates the fundamentals of the deal and the new contract. On the client side it is crucial to have your own (or hired) experienced project manager who identifies possible problems early and who has a clear understanding of both the client’s and the supplier’s responsibilities in the project.
Many people think that the existing supplier will make things difficult during the transition. This is not the case in our experience. Suppliers know that their market reputation can be at risk if they don´t manage an exit project properly. Technicians from the existing and the new supplier often work very well together, focusing on solving possible technical issues without letting other business-related issues get in the way.
So, should you hesitate when it comes to changing supplier and enter a transition project? In our opinion you should of course be willing to change your supplier if you aren´t satisfied. But you must secure a good supplier team with the appropriate resources allocated to it and be willing to mobilize internally. A transition project doesn’t manage itself.
Our advice is to make preparations for the introduction of a new supplier preferably some time before a procurement starts, to manage the whole process with a great deal of respect and to bring in external expertise in appropriate parts of the project. You reap what you sow.