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Sunday, November 14, 2010

Letter S: The Simple test: results are true and fair versus comply with the rules - Unknown

This is the second aphorism pertaining to the contract. A healthy sourcing relationship constantly applies the Simple Test. Avoid slavish adherence to a contract clause. It is much better to solve the business problem first and then spend the time to amend/delete the contract clause. It is easiest to behave in this manner if there is adherence to principle rather than rules based standards.

The Twin Evils of Sourcing: paying for nothing and paying twice for the same thing.
All customers want to avoid the twin evils of sourcing. If there is a contract clause which over the lifecycle of the relationship means that the customer is paying for nothing, spend the time to make the contract change to fix this. One principle of the service business is that there is a tipping point for customer loyalty. Once the tipping point has been exceeded it does not matter what the next offer is, the customer will not work with that provider and vice versa.

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