Let’s Dance, Partner!


Have you noticed how many companies are eager to claim that they have “partnered” with a customer who is using their products or services? Partnered? What does partnered really mean? Does it simply mean that one company bought something from another? An attorney will tell you that a partnership has some special meanings in the law. But that kind of partnership is not what the public relations people were thinking about. Has the term “partnering” simply become an overused and now meaningless cliché? Has it been stripped of any real meaning by the advertising agencies and marketing communications departments? Partnering indeed!

The announcement of a partnering relationship is supposed to create the impression that the relationship between the customer and its supplier is something a whole lot deeper than a mere commercial transaction. This is something really special. It is a marriage announcement!

Presumably the parties to this arrangement first learned to dance – that is, to talk to one another and spend time together. Then they dated. Perhaps the customer actually visited the supplier’s factory or offices, and certainly the supplier visited the customer’s facilities. Finally the future customer actually bought something. At last, this was the wedding, the marriage! And the couple wandered off into the sunset, hand in hand, happy ever after.

But wait, is this a marriage of interests or is it really just a commercial transaction, fluffed up for a press release? Partnering sounds better than A bought something from B.

OK, so the “partnering” word is sadly overworked. It is hard to conceive of a utility “partnering” with its supplier of ball point pens or hard hats. But there are some cases where there must be a marriage between the supplier and the utility. AMR is a prime example. Yet it is amazing how many utilities don’t seem to get it. It is amazing how many utilities don’t understand that the selection of an AMR vendor creates a 15 year marriage, whether the utility likes it or not. It can be a good marriage or a bad marriage. The marriage can start out well, and remain cordial and productive. Or it can start off badly and end in a nasty divorce a few years later.

There are utilities that blatantly abuse their position as potential buyers – even before the “first dance”. They begin by inviting parades of vendors to make “dog and pony show” presentations, again and again. They follow this by writing poorly conceived RFPs (Request for Proposals) that require AMR vendors to produce massive and very costly proposals, although a much simpler RFI (Requests for Information) would have done the job at this stage. This process too often begins before the utility has even figured out what it is really looking for, or whether there is any budget available. It escalates. Next come more costly presentations, and more RFPs and more proposals, even by vendors who really do not have a chance. No wonder the attrition of AMR suppliers is so high!

Utilities sometimes forget that the vendor has a business to run and a payroll to meet. A few utilities forget that if an AMR vendor cannot make a reasonable profit, that vendor will simply not survive. The streets are littered with failed AMR companies that “gave away the farm” as they tried to penetrate the market. Too many utilities have unreasonably squeezed the vendor on price and other terms, to the point that the vendor eventually fails, leaving utilities stranded with equipment that is no longer supported. That is a “lose-lose” strategy!

Enlightened executives of well-managed utilities will ensure that their AMR vendor of choice is making a reasonable profit – every step of the way. These executives are smart enough to know that a relationship that starts off badly often gets worse. They know better than to demand unreasonable and very costly concessions from a struggling vendor with the arrogant view that “they need us more than we need them!” They work to build strong and mutually profitable relationships with good vendors.

The most successful relationships between utilities and AMR systems suppliers are built on trust, candor and open co-operation. A utility steals part of that vendor’s chance for survival by allowing a vendor to prepare a costly proposal when there is no realistic chance that that vendor will be selected. A utility that asks the AMR vendor community to spend hundreds of thousand of dollars on presentations and proposals, and then never buys anything, has very questionable ethics.

OK, so we see that the word “partnering” does have its place after all. If there ever was a place where partnering is essential, it is in the procurement and deployment of AMR systems. The seeds for a promising relationship between the utility and the vendors that serve it start with the very first dance, and all the interactions that follow. A long and happy marriage depends upon the relationship being a win for both parties!

If you would like to comment on this Viewpoint, please write to the author at cm@smart-energy.com

The views expressed here may be unpopular, politically incorrect, heretical or simply humorous. The views expressed may be ideas that all of us have had but didn’t care (or dare) to articulate. The opinions expressed are those of the author alone, but are probably shared by many who have yet to say so.