Kanika Datta: Good clients make for useful vendors

SWOT

There is a certain brand of mobile phone that I have resolved never to buy. Likewise, there is an American IT brand, an airline, an infrastructure multinational, a global FMCG company and a TV channel that are on my personal blacklist.

Are these products that haven't delivered their promise to me as a customer? No, they represent some of the companies that I "experienced" as a vendor. In my mind, they are distinguished by some wilfully ill-mannered executives who ultimately did little to enhance the reputations of the corporations they represented.

Reams have been written on the importance of vendors as partners in a world in which business is becoming progressively collaborative. As a recent article in Inc.com put it, "Increasingly, a successful company is less a standalone entity than a seamless network of alliances and partnerships." Today, the demands of cost-competitive growth dictate that businesses increasingly outsource their operations. Typically, many of these outsourced operations are defined as "non-core". Cumulatively, however, they determine a corporation's competitiveness just as much as its "core" operations.

Would multinationals be able to survive without outsourced payroll operations, for instance? Can car manufacturers do without the component makers? What would banks do without their commercial call centres?

Indeed, India's entire ITeS business is predicated on the model of business partnerships. It is significant that the larger, more reputed ITeS service providers choose to position themselves as "partners in business transformation" for their clients.

The term "partnership" is critical. It suggests a healthy, inclusive and collegial dynamic within a business network that can create a momentum of all-round growth. Businesses essentially are, and always have been, a network of human relationships at every level. Though IT has become the chassis on which companies are run, the quality of businesses relationships count more than ever.

Consultants will tell you that the challenge for most companies today is getting your vendor to treat you the way you treat your customers""like a true partner. One often overlooked but critical factor in this equation, however, is how companies treat their vendors. Can vendors consider themselves "true partners" of their clients if they are routinely ill-treated?

Admittedly, the line distinguishing a demanding client and a rude one can be thin in any vendor-client relationship. But in any case, inefficient service attracts its own harsh penalties in today's acutely competitive markets. Equally, however, the proliferation of businesses gives efficient vendors a choice as well.

In India, the importance of vendor relationships is yet to be fully appreciated. To be sure, many clients in my experience were well aware of the distinction between demanding optimal service and unpleasant behaviour. So even the most pernickety of them could make service delivery motivating, enjoyable and, most importantly, inclusive.

Executives in the companies mentioned at the start of the piece had clearly not understood this. They tended to view vendors in the literal sense, as contracted delivery agents, making the small change of daily business unpleasant and uninspiring.

Should the views of vendors matter? Aren't the opinions of employees, customers, analysts and journalists more important? Perhaps, but corporations often overlook the fact that all the people who come in regular contact with them are indirect ambassadors and custodians of their reputation (including, famously, the shoe-shine boy).

And as the world becomes more socially aware and globally linked, the reputation value chain is becoming just as crucial as the commercial value chain.

As global corporations have discovered, the Internet has proved a potent determinant of corporate reputation. It is also a truly democratic medium that makes no distinction between differing classes of stakeholders.

So, just as companies can ill-afford unhappy employees, they can hardly allow themselves the consequences of sub-optimal vendor relationships. And just as employees have emerged as key stakeholders in the current battle for talent, so vendors will emerge as critical partners in an increasingly networked business world.

"Business success depends on collaboration," said the Inc.com article. In today's business world, the adage that there is no such thing as the unreasonable client has worn thin. Clients have just as much responsibility towards making a relationship work as their vendors.

The views here are personal