Innovation Is Risky – But What’s The Risk Of The Same Old Supplier Relationships?

Sourcing and Vendor Management professionals aren’t known for their high risk tolerance. In fact, most focus a significant portion of their time reducing risks in their supplier base, protecting the business from supplier-related risk.

That’s admirable and necessary. Of course the business shouldn’t be subjected to predictable and preventable risk events. But let’s think for a minute about what risks we’re really avoiding: Are we avoiding the unnecessary risks that we could see coming? Or are we so focused on reducing any risk that we’re not able to take advantage of new opportunities that could transform our businesses?

Innovation has once again become a business imperative — because of the shaky economy, not in spite of it. Many SVM professionals tell me that being innovative in both what you buy AND how you buy it is what will make sure their businesses stay viable regardless of the economic situation. Innovation requires us to think about new technologies, and most likely new suppliers. It also requires us to think differently about how we manage those supplier relationships.

So what are the new supplier-related risks we face in this innovation-focused environment? We asked Jason Busch, Azul Partners, one of our keynote speakers at the SVM Forum this week, this question. He recorded his answer for us here:

And if his response leads you to have follow-on questions, don’t forget to tweet them with the hashtag #SVM12. We’ll ask him for you during the forum.