• Tuukka Ihalainen

The true test of Partnership

Updated: 6 days ago

Signs of possible global pandemic were there. However, governments and businesses were nowhere near prepared for it. 

Immediate and primary focus is naturally on treating infected people, controlling the spread of the virus and scaling healthcare system to respond the rapidly growing demand. Only as the employees are safe companies may analyze the damages to the company internally, along their supply chain, to customers and in the market in general. 

Social media, including LinkedIn shows posts and articles on how to adapt to the sudden changes and the disruption caused by this pandemic. On this note, I find it difficult to find valuable insights as no one was really prepared for this scenario – as appears only natural. Here are few that I found interesting and useful:   HBR; Steve Blank *


https://hbr.org/2020/03/a-5-day-plan-to-keep-your-company-afloat?


https://www.bain.com/globalassets/noindex/2020/bain_brief_a_ceo_plan_for_coronavirus_actions-to-take-now.pdf


https://bcghendersoninstitute.com/sensing-and-shaping-the-post-covid-era-c282cd227a4f

At Melkki, it is business as usual to help our clients to identify and improve the efficiency in the digital supply chain. We help clients to select the right partners to drive business value and outcomes. Now that we experience the pandemic and there are sudden changes in the business environment, many companies have shifted the focus from thriving to surviving*. This calls for and pressures the digital supply chain alike. 

Survival = (speed of your understanding of the situation) x (the magnitude of the pivots/cuts/lifeboat choices you make) x (the speed of your time to make those changes)* What I find bothering is that many suppliers in the digital supply chain are using their term partner in their press releases and marketing brochures, which is an OK practice upon agreement. However, I would argue that many companies realize that these are the times that reveal whether you have a true partner or just another supplier for a company. Partnership is long term relationship. For our clients it means that in difficult times both parties take the opportunities to cut costs if required and when the tide turns, partnership is open to grow. Agreement to cut costs should be possible even if the contract does not specifically cater for it. Suppliers holding on to their terms and vendor locks are damaging their reputation.

The IT services and outsourcing market became a buyer’s market in a blink of an eye after companies started layoffs, site shut downs, and operations and projects closures. In this regard, the margins of IT services companies will also be hit indirectly by the virus in the short term. New deals are done with lower prices than before the crisis. While smart companies looking for a new partner can take advantage of the situation, partnership that are truly valuable or strategic are now called upon their capabilities to communicate, renegotiate temporary ways to navigate the situation and the set the scene for the partnership to grow after recovery. Companies in turn should turn to their partners, and us if needed, to ensure they are doing all necessary to manage their efficiency goals are well-suited for this unusual setting, and to plan for the growth ahead. 

Melkki has extensive experience to serve clients with all things related to operational efficiency, change program management, and IT supplier portfolio management. Let’s ensure the bang for the buck, we are happy to help you with re-organizing or re-negotiating your IT supplier portfolio.

For better partnerships, with or without the pandemic.

Yours,

Tuukka



#corona #sourcing #digitalsupplychainefficiency


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