The benefits of implementing a ‘Two Supplier’ strategy


For many businesses, the idea of using a single outsourced supplier to assist with credit management remains a relatively new concept, let alone using two. But the ‘Two Supplier’ strategy can have significant benefits in creating choice and flexibility, improving quality, strengthening contingency plans and competitive pricing.

Choice and flexibility

Whether it be a trace agent or High Court Enforcement Officer, the two supplier strategy is one that has allowed Lovetts to compare service levels and performance, ensuring we maximise and enhance our debt collection success over the years. Equally, as a supplier of debt recovery and legal services we have always been happy to work in this way, recognising that the different strengths and perspectives we and indeed our competitors provide offer different ways of doing things.

Improved quality

A study by ISG Director Michael Kushner describes the use of multiple suppliers as an ‘agile’ practice and one that has evolved from a maturing outsourcing market. Sarah Burnett, research director for Public Sector BPO at Nelson Hall, says that the introduction of a second supplier represents “a desire to adopt best-of-breed for a particular process or domain and ensure access to superior capability”. In other words, healthy competition is still a key driving force behind business innovation.

Stronger Contingency Plan

Having two or even more suppliers offering the same service allows companies to better protect themselves against unforeseen circumstances, e.g. if a supplier goes out of business or they are unable to supply what was agreed at the last minute. It’s another reason why an increasing number of companies have made it a companywide policy to always contract two suppliers for the same service.

Competitive pricing

And of course, having multiple providers in the same area can only help with cost-efficiencies. The common apprehension here is that this practice implies ‘playing one party off against the other’ to drive down costs, but this is not necessarily the case. By assessing what individual service providers are delivering in a professional and impartial way, you’ll be able to better understand where third-party investments are most effectively being made.

Ultimately, being open to a two supplier service strategy and beyond keeps your business open for growth and development, and it’s a way of working that Lovetts is experienced in both as a buyer and as a service provider ourselves.

If you are interested in trialling Lovetts services, we are offering the opportunity to send Letters Before Action (LBAs) for FREE throughout November 2018 to all current and new clients.

21 November 2018