What is The Seprio Wheel?

The Seprio Wheel was created to illustrate the best practices sourcing and vendor management lifecycle.

The Seprio Wheel Overview

  • Sourcing

    The best time to involve sourcing professionals is as early as possible. The sooner you have someone who lives and breathes sourcing to guide your team, the better.

  • Vendor Management

    Most companies don’t handle sourcing correctly, much less vendor management. If sourcing properly is a 101 course, then contract management, vendor performance management, and vendor relationship management are 201, 301, and 401 respectively.

  • Best Practices

    At the center of the wheel is the Best Practice Engine. This is the culmination of Seprio having been in business for 20+ years and the 100s of years of combined experience of its staff, all coming together for your benefit.

Stage 1

Sourcing

The top half of the wheel is the sourcing process, and we like to joke that it doesn’t begin where it says “Negotiation starts here”, or even at the first “Discovery” wedge on the left. It begins 3 websites to the left of this one, back when the business team first uttered the words “maybe we should think about buying a new product”. But it was too hard to draw that, so we went with this.

It formally begins with “Discovery” and “Assessment”, where we work to identify what the business team is trying to accomplish, what they need, what they want, and what the market has to offer. Then it moves directly into Strategy Development where all of those things are rolled up into a strategy document that describes the agreed-upon goals and objectives and the sourcing strategy to accomplish them. Your ‘must-haves’, your ‘we’d sure like these’, and your drop-dead date all are included, so everyone is on the same page.

Then we move into Leverage Development and RFx. Leverage is the currency you use to motivate your vendors to give you what you want (and…hint…it’s not always money.) The best way to maximize leverage is to have competition, and the best form of competition is the even-handed and fair competition created by using an RFP, RFI, or RFQ (aka RFx). If we can do an RFx, we should. If not, there are ways to create almost-as-good competition. This is where the strategy comes to life and the foundation for the negotiation is laid.

Finally, the negotiation and contracts. You can’t have one without the other. Negotiate a great deal but neglect the contracts, that great deal might be dust in the wind. Focus on the legal terms but neglect the commercial terms, you’re leaving money on the table. You’ve designed your strategy and maximized your leverage. Use it.

If you’ve done these things, and done them consistently across all of your new purchases, renewals, replacements, terminations, etc., you’ll experience the primary benefits of Sourcing: Visibility, Consistency, and Cost Savings/Risk Reduction. When you know what your organization is buying, and you know they’re buying those things using consistent best practices, you can relax a bit, confident in the knowledge that your organization is getting the best price and the best contracts. Congratulations, you’ve done it!

Signs this is for you:

  • You’re wishing you had an objective third party to validate that you’re getting the best price and fit for your situation

  • Don’t have time or expertise to have an in-house team do an RFx.

  • You need to provide a due diligence report to the executive team to justify your choice of vendors and/or solutions.

  • Don’t want to hurt relationship with vendor, but need a better price.

  • Your team has a good RFx process, but you want to optimize it and make sure they are utilizing best practices for RFx’s in the future.

  • Your team doesn’t have an existing RFx process, or the current process isn’t cutting it.

  • Uncertain of risk exposure without needing a lawyer to simplify it.

  • The pricing structure is a nightmare to understand.

  • Don’t feel comfortable engaging in negotiations with a vendor.

  • Currently negotiating with a vendor, wanting the best deal possible.

  • Contract renewals around the corner, looking for better savings

Got a question specific to your situation? Let’s get it answered.

Stage 2

Vendor Management

That’s only 1/3 of the story, though. All of the stuff we just described is great…it really is. But, what good is having a great contract if you can’t find it, or track to its key dates and terms? How useful are caps on year-over-year price increases if you don’t review invoices against the contract to ensure the caps are being honored? How useful are comprehensive service levels and KPI’s if you don’t have a mechanism for monitoring those? And how much is your company losing if it’s not maximizing the value of the relationships you have with your vendors? That’s where Vendor Management comes into play.

Contract Management is like Vendor Management 101. You need to be doing this. Your contracts should be in a central repository that tracks key dates, terms, invoices, payments, etc. It’s impossible to manage all those dates in a spreadsheet, so please stop trying. There are systems designed to do this for you, easily and simply (we know…we have one).

Vendor Performance Management is the 200-level form of Vendor Management. This is where you are intentional and diligent about ensuring that your vendors are doing what they promised. This is vendor- and deal-specific, but it likely entails making sure your vendors are tracking to their project timelines, or costs, that they are fulfilling their service level guarantees, and/or that they are managing their key performance indicators.

Vendor Relationship Management is graduate level Vendor Management. We use it as a sort of placeholder for all the things you’re going to learn you need to do with your most critical service providers. We say “you’ll know it when you see it”, because it will be specific to you, and to your vendor relationships. It’s all the things you’re going to do to ensure that the value of the hard-earned relationship you’ve built is fully recognized. It’s where your ‘vendors’ become ‘partners’.

And then, as quickly as that, we’re back at “Negotiation Starts Here” (or 3 websites ß that way), ready for your renewal, or vendor replacement, or termination, or whatever your business needs.

Signs this is for you:

  • Don’t have time or expertise to have an in-house team do an RFx.

  • You need to provide a due diligence report to the executive team to justify your choice of vendors and/or solutions.

  • Don’t want to hurt relationship with vendor, but need a better price.

  • Your team has a good RFx process, but you want to optimize it and make sure they are utilizing best practices for RFx’s in the future.

  • Your team doesn’t have an existing RFx process, or the current process isn’t cutting it.

  • Uncertain of risk exposure without needing a lawyer to simplify it.

  • The pricing structure is a nightmare to understand.

  • Don’t feel comfortable engaging in negotiations with a vendor.

  • Currently negotiating with a vendor, wanting the best deal possible.

  • Contract renewals around the corner, looking for better savings

Got a question specific to your situation? Let’s get it answered.

Stage 3

Best Practices

We’ve seen the processes, and now we’re to the chewy nougat in the middle, the Best Practices. This is the Seprio difference, what sets us apart. Since 2000 we’ve been working for small companies with little leverage, for huge companies whose name is the leverage, all the time honing these skills, these tactics, and this mindset, and they now exist for your benefit. We can’t tell you what they are, in part because it’s kind of our most valuable asset, and also because it’s in our DNA and can be hard to explain. It starts with seeking, every time, a win-win solution. Vendors are people too, just trying to do their job. Understanding where they’re coming from, and working to accommodate that, while getting what is important to us, is what negotiation is all about, and it’s what will help foster an even stronger relationship with that vendor. We’ve also found that developing a best practice sourcing and vendor management program doesn’t require immediate, transformational change (something your business people are often intimidated by). It can be done gradually, organically, by winning those business people over, one by one, as they see the benefit of following the process. A lot of the time, our Clients don’t even realize they’re using a best practices sourcing and vendor management program, they just know they’re working with Seprio on their deals, and we think that’s the best way to effect change. But if you’re interested in moving faster, we do have The Green Notebook, in which we compare your current state to our best practices, and we show you the gaps.

Signs this is for you:

  • You need to provide a due diligence report to the executive team to justify your choice of vendors and/or solutions.

  • Don’t want to hurt relationship with vendor, but need a better price.

  • Your team has a good RFx process, but you want to optimize it and make sure they are utilizing best practices for RFx’s in the future.

  • Your team doesn’t have an existing RFx process, or the current process isn’t cutting it.

  • Uncertain of risk exposure without needing a lawyer to simplify it.

  • The pricing structure is a nightmare to understand.

  • Don’t feel comfortable engaging in negotiations with a vendor.

  • Currently negotiating with a vendor, wanting the best deal possible.

  • Contract renewals around the corner, looking for better savings

 

What are you here for?

We’d love to chat about your situation.