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Vendor Relationships Trends and Implications for 2002

February 8, 2002

Workforce has been talking to HR professionals and HR vendors to find out howthe relationships between HR and the suppliers of HR products and services arechanging, if at all.

What's happening in your company that contradicts or confirms these trends?Read the quick synopsis below. Then to give your opinion, click on the VendorRelationships Survey.

Workforce will tabulate these results and include them - and selectedcomments - in the next version of this article.

  1. Vendors need to prove their ongoing stability.
    Successful companies do not want to be at the mercy of an unstable orfinancially troubled vendor.

    Therefore, ongoing financial viability moves to the top of the checklist ofcriteria in vendor selection - and is key to maintaining existing vendorrelationships.

  2. There is less margin for error in the delivery of a vendor's products andservices.

    As organizations continue to look for increased productivity, efficienciesand cost savings, they are putting increased demands on their suppliers todeliver the right product (or service) on time, on budget and within exactspecifications.

    Because the HR departments cannot afford mistakes, they will not toleratethem from vendors. Every vendor will need to increase or maintain its qualityand get it right the first time.

  3. Customers are looking for new capabilities from their vendors.

    As companies look at everything from improved process efficiency to improvedmarketing results, they will be open to new ways of doing business.

    Customers will turn to their vendors for new capabilities, new relationshipsand new partnerships to fulfill their needs. Today's HR department cannot beheld back by the lack of options from a current vendor.

    Long-term vendor relationships will be threatened if the vendor cannot keepup.

  4. Customers are starting to react to the impact of delayed expenditures.

    Many companies put off major and even minor expenditures in 2001 inanticipation of an economic recovery in 2002. In order to stay competitive, manyof these expenditures can no longer be delayed.

Source: MargaretMagnus, Publisher, and The Workforce Editors, January 2002.