Supplier Relationship Management in daily practice

By Lisa Somers on 31-Oct-2017 11:33:00

IT-vendors often have a strong dominant position in their relationship with organisations and switching between IT-service providers involves high switching costs such as changing interfaces, reorganising processes, training people, and accelerated depreciation. In addition to direct costs, there is a risk of switching between service providers since a loss of production, sales and data may occur in case of failure. Therefore, these service providers can be seen as strategic providers which can have a high impact on the risks and costs of organisations (Kraljic, 1983). Kraljic indicates that a partnership may be the most appropriate strategy to mitigate these risks.

Topics: Procurement SRM
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