I have been involved in an increasing number of discussions recently concerning the future of the client/supplier interface, especially in respect of the nature of the so-called ‘Intelligent Client’ role. The recent perceived wisdom has it that suppliers need and depend upon their customers having a fully functional and engaged ‘intelligent client’ function if they themselves are to be successful. Quite what the nature of this ‘intelligence’ is (beyond selecting ‘them’ as suppliers that is, of course) I am not entirely sure, though. And there are now some cracks appearing in the logic of this argument as well.
The story being told by some suppliers has now subtly changed. As they have expanded their global reach and deepened their skill sets and capabilities, it is increasingly common to hear them complain that they need closer engagement with the core business directly, and also need to be entrusted with more and more of the ‘smart’ high value work such as portfolio strategy and performance management. They also expect to fully deploy their information systems so that they control all of the data of the extended operational chain and can provide ‘seamless’ and comprehensive reporting. Otherwise, so the argument goes, they are being restricted to the commodity work so how can they be expected to really make a difference and innovate? Taken to its logical conclusion this leaves the ‘end-user’ or internal corporate real estate role as little more than a governance and contract management function, with perhaps a bit of core business relationship management and interface thrown in for really sensitive work early on in it’s gestation. But in this scenario it is clear to see why the ‘end-user’ corporate real estate function as we know it today could disappear altogether and be replaced by a ‘procurement-plus’ function, increasingly referred to as strategic sourcing. After all this is already happening in many other back office business service areas through business process outsourcing.
The alternative and natural reaction to this is to maintain control (including the key information) and all of the important high-value ‘smart’ work within the ‘end-user’ internal team. In so doing though, suppliers may be correct in claiming that they are being restricted to all the low value, low margin commodity work… so don’t blame them that nothing surprising or new is forthcoming. And can any individual ‘end-user’ team really compete with the capability of a sophisticated supplier for whom such expertise is core business?
Which of the two routes therefore leads to the best sustained performance from the enterprise’s perspective?