The typical Consultancy-Internal Client-Procurement Flow needs to change, says Paul Vincent. Procurement Professionals must deliver business value much earlier in the buying cycle.
Two key challenges need to be overcome for a Procurement Professional to become ‘The Knowledgeable Buyer.’ The first is the simple question of inclusion. You have to move from being engaged at the end of the line to close things out, to being involved when a need is first identified. However, to become an integral part of the end to end buying process, Procurement Professionals need to show that they can effectively aid a stakeholder in their decision making and relate most appropriately to the supply market. The second is a question of approach. You obviously have to protect corporate terms and conditions to ensure that the business achieves best value for money, but you have do this by implementing effective processes, not unnecessary bureaucracy.
Making it happen
‘The Knowledgeable Buyer’ has to focus their involvement and influence on achieving successful engagement outcomes, not simply squeezing an extra 1% from the costs which may turn out to be counterproductive. An ‘outcome’ rather than ‘deal’ focus will naturally help ensure you achieve best value for money. Achieving successful engagement outcomes means being proactive and having your radar switched on at all times:
Anticipate Business Improvement needs: They will rarely feature in a category strategy, so you have to be able to predict where needs may emerge during the year ahead by identifying those parts of your organisation which face the biggest challenges. You need to leverage your management chain to learn about emerging problems and track the organisational movements of key executives – especially at certain times of the financial year.
Monitor the political landscape: Who seems to have inherited a problem? Who needs to be rescued or wants support?
Tune into the urgency of business needs: When Business Improvement needs do emerge, they’re not suited to a long, drawn out selection exercise, so a high degree of supply filtering must be done in advance. You therefore need to recommend the selection process that is most likely to deliver the ‘best fitting’ choice. You’ve also got to keep in mind that Business Improvement engagements are almost always phases of work, and not all those phases need to be bought at the same time or indeed from the same firm.
Help shape the scope of work: Internal clients can sometimes be blindsided by the scale of the challenge and spend insufficient time on root cause analysis, so you should be alert to the impact this can have on the scope of work required and help to qualify perceived needs. Share knowledge of past projects and/or external case studies to offer advice on engagement options. The critical thing is to help them define the specific outcomes required.
Recommend the ‘best fit’ supply options: Who has your organisation used before and how did they perform? Are they still just as capable now or has something changed? If an alternative choice is required, you have to know how widely to cast the net.
Contribute to setting the key milestones: The core principle here is obviously payment by outcomes or results, but this needs to be appropriately applied. Projects need to be realistically achievable and to take account of the ‘real’ baseline.
“The knowledgeable buyer will focus their involvement and influence in achieving successful engagement outcomes.”
Support the delivery of project outcomes: Once a supplier has been selected, you have to help create the environment for success by practically supporting ‘on-boarding.’ This includes staying on top of how things are progressing and spotting potential issues before they become escalations.
Ensure there’s a feedback loop: It’s important to remember that no Consultancy wants to be known for unsuccessful engagements. So a feedback loop is vital. Tie feedback to payment if you can, but be reasonable and remember, feedback is a 2-way street. Things can’t change overnight, but the benefits will be enormous. You’ll become a trusted business advisor and your organisation’s Business Improvement programmes will achieve their optimum outcomes.