• Our mission
• Our approach
• Business benefits
• Intelligent Allocation
• Expectation Management
• Our solution

Our mission

River Dynamics helps organisations to optimise the price performance of their service providers and maximise the efficiency of the business processes required for supplier interaction. Our supplier management and optimisation system, Intelligent Supplier Management (ISM), can be used to manage any type of service provider.

Our approach

The key assumptions which underpin our approach to managing suppliers on the system can be applied across all supplier types. These are:

• The performance of suppliers (against any set of performance indicators) is variable, with some suppliers outperforming others.
• If performance indicators are clearly stated, and allocation decisions are substantially based on performance against the performance indicators, then suppliers will improve their performance in order to receive more work.
• This approach will only be accepted by suppliers if the complexity of individual jobs is considered when assessing supplier performance.

Business benefits

ISM helps our customer achieve the following business benefits:

• Cost reduction
  Reduce both the direct costs (the professional fees and disbursements charged by the supplier) and the indirect costs that are influenced by suppliers. Indirect costs can be substantially higher than the direct costs, so impacting these can deliver a much better return for the purchaser than just focusing on direct cost savings.
• SLA compliance
  Automatically capture, as part of the business process embedded in the system, each supplier's performance against all SLAs.
• Management information
  A sophisticated reporting module provides real time reports on all aspects of the portfolio of jobs being managed, supplier spend and performance. Alerts highlight jobs that need review. A performance dashboard provides real time information showing precisely how each supplier (internal or external) is performing, on every performance measure.
• Process efficiency
  Both internal and supplier staff benefit from having a streamlined and repeatable business process. All data relating to suppliers and jobs is in one place.
• Process compliance
  Ensure that both internal and external staff fully comply with designated processes, and that rules concerning maximum billing rates, job status reporting, etc. are enforced.
• Better outcomes
  By incorporating supplier KPIs that are linked to better business outcomes, and rewarding good performance against those KPIs, outcomes that can be influenced by suppliers will be improved.
• Eliminate panel leakage
  Ensure that new jobs are only allocated to suppliers who are eligible to receive the work (e.g. they are on the appropriate panel, they have the necessary certifications).
• Optimal supplier performance
  By rewarding suppliers who perform better than their competitors by allocating relatively more jobs to them, each supplier will perform at their peak, on every job. Even where there are single supplier arrangements, supplier performance improves significantly because it is so easy to monitor performance and non-compliance.

Intelligent Allocation

Intelligent allocation rewards better performing suppliers with more job allocations. Intelligent allocation uses customer weighted performance scores (common performance metrics used are cost, timeliness, quality and business outcome) to make supplier recommendations at the point of work allocation. The normal business process is for the purchaser to reward the highest scoring supplier by allocating more work to them (although they can allocate the job to any qualifying supplier and enter a reason for doing so).

A supplier performance dashboard is available to both the purchaser and suppliers to allow all parties to view relative supplier performance. The dashboard quickly highlights where suppliers need to improve their performance in order to receive more jobs. When suppliers view the dashboard, the names of the other supplier companies are de-identified.

Expectation Management

Some supplier jobs types are highly standardised which makes the use of absolute performance measures appropriate. However many supplier job types are highly complex and variable. For these job types suppliers cannot be compared fairly on absolute measures of performance such as average cost or average duration. A supplier might well argue (quite reasonably) that, on average, they are more expensive and take longer to complete jobs because they receive the most complex jobs.

Expectation management allows the purchaser and supplier to negotiate agreed outcome constraints for a job. The performance of the supplier is then compared to the relative performance against these outcome goals. In this way, jobs of differing complexity can be compared to each other and absolute metrics do not need to be used as the sole measures of performance.

Our solution

ISM is a highly secure web-based system that connects purchasers of services with their service providers. The entire business process, from allocating jobs to submitting and approving invoices, is conducted online. There are a number of system functions that are common to most implementations and which deliver enhanced process efficiency and compliance, and substantially better management information including:

• A task based workflow capability that tells users when all key deliverables are due.
• A document repository that allows any file to be uploaded and shared by users connected to a job.
• A messaging system that allows secure messaging between users.
• The ability for suppliers to provide regular updates on the status of long running jobs which feed into "red flag" reports highlighting "at risk" jobs that need review.
• Online invoicing capability that validates invoices at the point of entry (ensuring that the invoices do not breach the purchaser's business rules).
• A management reporting system.
• A performance dashboard is available to both the purchaser and suppliers. This shows the relative performance of all suppliers against the weighted KPIs, and quickly highlights where suppliers need to improve their performance in order to receive more jobs.
• A supplier discount management module that allows suppliers to offer discounts against their normal fee rates, in return for a greater proportion of allocations.
• The ability for the purchaser to perform qualitative assessments of the work performed by the suppliers.
• The ability for a supplier to enter a plan for the actions that they will complete as part of the job with reminder tasks being created as required.
• A panel management capability that allows the purchaser to maintain supplier panels and ensure that jobs are only allocated to suppliers who are on the appropriate panels thereby enforcing procurement compliance.
• A complete set of configuration tools that lets the customer maintain the system once implemented.