Nationwide’s customer operations division focuses on exceptional service delivery to our customers and in doing so has a key role to play in the performance management of strategic relationships with outsourced service providers. Historically, this had been managed by a combination of business operations and procurement, which led to a ‘transactional’ supplier agenda. The turning point was Nationwide’s appetite to drive for better value from third parties and effectively manage risks in a consistent manner across the society.
About six months ago, customer operations, along with the business services and information technology departments, partnered with procurement and external advisers to develop a policy and process framework we could use to manage the performance of third parties. This framework, which we began using in the past few months, provides guidance on governance, access to performance review tools, documents that assist with strategic management of relationships, together with the roll-out programme, which includes education and training packages that can be used inside the business and for third parties. To support the framework, there is an online tool, which third parties can access and upload information. We now have a consistent approach to:
- Who is responsible for what?
- Proactive management of commercial and service delivery risks
- Setting planned strategic objectives
Working with procurement’s supplier assurance team enabled greater alignment on how to create a foundation for third-party management that would drive further value in service delivery and cost efficiency.
Our experience of working with procurement has highlighted the value of working towards a common goal, with the recognition that, while we may view the third parties from different angles, the outcome is the same – the ability to work consistently to drive value aligned with strategic objectives for the benefit of the relationships.
Tips for procurement
Make sure business goals and areas of common ground are aligned. Procurement is tasked with delivering savings. Business performance focuses on service levels and process efficiency gains to the benefit of customers. So identify the common goals and let that be the focus. Allow for healthy discussion on challenging the areas of perceived conflict. These can be exploited as opportunities.
Recognise each other’s skills and expertise. Typically procurement focuses on commercial guidance versus offering help to solve business problems and vice versa. Making sure you are clear and agree on who is advising whom for problems helps a successful outcome.
Continuous improvement opportunities. As business requirements change, so commercial arrangements need to be amended. Partner on strategies, highlighting any risks and impacts that need to be resolved, and opportunities, agreeing owners. Be mindful that these could change over time, delivering different and sometimes better outcomes.
☛ Chris Shott is head of business performance and supplier management, customer operations at Nationwide Building Society
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