The age-old mantra about the vendor being a partner to the customer got a better spin at the Nasscom India Leadership Forum 2011.

Matt Idle, Credit Operations Director, British Gas opined, “Today, it’s about strategic flexibility. A vendor has to understand his client’s value creation chain and also realize that he is not a mere part provider; he should be willing to take risks and deliver outcomes. “  

Services buyers would want to sit on the table with a vendor that has the appetite, ability and the capability to comprehend its value creation cycle and also drive that value.  Service providers need to understand the needs of the customer’s customer and drive value towards meeting those needs.

Clarifying the service provider’s ideas on partnership, Rajesh Nambiar, GM Services Integration Hub-East, IBM listed out the following :

1.    Increasing prominence of emerging markets as the key driver of growth demands frugal innovation.
2.    Reduction in financial leverage makes operational performance more crucial.
3.    Increased and prolonged uncertainty in the global economic environment requires more nimble operating models.

Citing the new levers of value creation, Nambiar added the following conditions for partnership to exist: 

1.    Companies need to share their models with their vendors and not keep their know-how in locks.
2.    Strategic flexibility , rather than economies of scale, is the key for managing uncertainties of global economic environment.
3.    Resource productivity than resource possession is the key for delivering value through operational performance. 

Nambiar ended, “Vendors should collaborate with customers in strategic decision making. For them, flow of more work spells sharing of business risk in value creation.”  

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