Leading Organizational Learning

Hewlett-Packard (HP) has moved even further into the enter-
prise environment with its newly merged Compaq skills as well as
the alliances (for instance, Disney) that Compaq added to the HP
mix. Although HP is certainly a supplier for Disney, the manage-
ment of the relationship is not at the purchasing level but rather at
the CEO level. The relationship is seen, managed, and valued as a
partnership or alliance, and that makes a substantial difference in
the way it delivers results.
The differences between outsourcing suppliers and supplier
alliances that are not outsourcing suppliers can be seen in Exhibit 8.3.
As you can see, the burden is greater on the buyer when work-
ing with multiple suppliers individually, especially if each is essen-
tial and viewed and managed as a supplier alliance. This means
that there must be clear processes for success metrics, regularly
measured mutuality, and analysis and quantification of competitive
issues (for example, the supplier works with a competitor and trans-
fers your information to the competitor). When dealing with

TRANSFERRINGKNOWLEDGE TOSUPPLIERS 87

Exhibit 8.3 Outsourcing Suppliers Versus Supplier Alliances

Outsourcing Supplier Seen Supplier Who Offers Partial Solutions and
as an Alliance Products, Not Turnkey, but Still Seen as an
Alliance

Contracts are long, with Contracts will continue to have integrated
quality provisions built in, aspects and could be lengthy; loyalty and
with highly integrated good pricing are bought by longer contracts
components and joint and lack of multiple-bid programs
development
The evaluation and choice The evaluation and choice process is less
process of the outsourcing onerous for both buyer and supplier-
provider is risky and partner; however, the integration of
complicated, requiring multiple supplier-partners into the supply
research, learning, knowledge, chain, since the total solution is not
and investment by both buyer outsourced or turnkey, will place a heavier
and outsourcer burden on the buyer to be sure that all
solutions can integrate and that the
separate suppliers can work together