Credit Matters Blog

Creating The Best Virtual Business Relationship

Kim Radok 16 November 2014


One of the key objectives of management, or should be, is a focus on creating the best possible and most efficient customer-supplier relationship. Unfortunately, many of the changes made which are claimed to improve these relationships are implemented with other objectives in mind. The implementation of virtual business relationship facilities is one of the key areas where we see changes made which are often proven to be less than perfect for these reasons.

The reasons why changes often do not work as well as anticipated for any business process are varied and many.

However a major factor any failure of changes is the ethos behind the implementation of the changes. Let us take management's stated reasons behind the proposed changes to any customer-supplier relationship functions. The stated ethos is to improve the customer-supplier experience and make it more efficient. The truth is usually more monetary based and focused on cost reduction. Any improvement in the "customer-supplier experience" is welcomed, but was not necessarily the key objective of the changes.

The question which we really need to address is: how do we cut costs and enhance the customer-supplier experience? After all, both objectives are essential in maintaining a modern competitive business.

When changes are considered to any business processes, a proper risk analysis of the change should always be completed. Today, I do not believe such analysis is completed adequately on many occasions. Furthermore, I would also suggest, that even when the analysis is completed, due respect to the risks of the change are not adequately addressed. History always shows us when there is more emphasis on one factor of change over another a lop-sided analysis report is produced with negative ramifications later on.

The implementation on changes we make to our business processes requires a great deal of care. It must not be forgotten, when making these changes, you are also asking your customers and suppliers to change their business practices to continue the business relationship. Such changes do impact on business relationships, particularly when going from people to people interface facilities to a virtual interface facility.

Simply assuming your customers and suppliers will fall in to place and accept the changes, is wilful thinking. I say wilful deliberately because not all of your customers and suppliers will comply with your directions for change. As we note from history and our own business experiences, stories are plentiful on the results of failed business process changes. The last thing you need is to lose a valuable customer or supplier because of a failure to consider the needs of other stakeholders.

Moving forward, I suggest the key factors in creating the best possible virtual business relationship include the following.

1  An unbiased and professional risk analysis of the proposed changes - not an analysis based on achieving the objectives for one group of stakeholders.

2  If the changes are substantial, input from key stakeholders such as suppliers, customers and employees should be sought as appropriate. You would be wise to seek evidence to prove the implemented changes will actually work be accepted. Experience shows the costs of making further changes because the first change did not work, are usually considerable.

3  Adequate training and support for all affected stakeholders is provided.

4  Written confirmation from all the stakeholders with the confirmation they understand and can operate within the specifications required for the new changes.

5  Adequate trouble shooting facilities are offered to the stakeholders. Such facilities are backed up with information which includes the name(s) of the people accountable for working with the other stakeholders, telephone numbers and specific email contact points. Generic procedures and point of contact resources, plus staff who are not held accountable for their performance, is a recipe for further problems and costs later on.

6  The recording of all problems for later review and to improve the process in the future.

Creating the best possible virtual experience for all stakeholders involved in your business is one of the key attributes of a successful business. Just like any other business process, the implementation of a new virtual business process requires careful consideration. If you do not get the process right, the costs will continue to be felt for years ahead. Get the process right, and the customer-supplier experience will be efficient and effective with all stakeholders benefiting from the change.