What are the true drivers for the modern Procurement Professional ? October 2014
Reassign Experienced Procurement and Sales people optimising outcomes for buyers and sellers….
What are the True Drivers….. “Full Value” isn’t a very large part of the actual conversation and Procurement and/or Finance has never asked us to….. Spend More Money Buy More Things Take More Time
The Problem with Value “Full Value” is difficult to Articulate Interpret and Evaluate and therefore, difficult to reward/award
The Problem with Value “Full Value” is difficult to Articulate Interpret and Evaluate and therefore, difficult to reward/award
If “Value” isn’t a True Driver (at least most of the time) then what is? There are the 3 simple drivers that excite Procurement and Finance alike (especially finance) :
Procurement (and Finance) Drivers There are the 3 simple drivers that excite Procurement and Finance alike (especially finance) : Reduce
Procurement (and Finance) Drivers There are the 3 simple drivers that excite Procurement and Finance alike (especially finance) : Reduce – Cost, Space, People, Touch, Time, Risk
Procurement (and Finance) Drivers There are the 3 simple drivers that excite Procurement and Finance alike (especially finance) : Reduce – Cost, Space, People, Touch, Time, Risk Rationalise
There are the 3 simple drivers that excite Procurement and Finance alike (especially finance) : Reduce – Cost, Space, People, Touch, Time, Risk Rationalise – Suppliers, Spend, Users, Procedures Procurement (and Finance) Drivers
There are the 3 simple drivers that excite Procurement and Finance alike (especially finance) : Reduce – Cost, Space, People, Touch, Time, Risk Rationalise – Suppliers, Spend, Users, Procedures Simplify Procurement (and Finance) Drivers
There are the 3 simple drivers that excite Procurement and Finance alike (especially finance) : Reduce – Cost, Space, People, Touch, Time, Risk Rationalise – Suppliers, Spend, Users, Procedures Simplify – Processes, Controls, Requirements, Relationships Procurement (and Finance) Drivers
Procurement People Drivers - Subjective The People involved in the process are critical because of their…. Influence Direction Bias Interpretation Intent
Procurement People Drivers - Subjective Personal Motivators De-Motivators SuccessFailure RewardRetribution ValidationExposure ControlPanic
Procurement Role in the Organisation It has taken since the early 80’s to Educate and Escalate the importance Procurement from Purchasing Officer Responsible to an Operations or Office Manager To….
Procurement Role in the Organisation The Board Room…. The emergence of CPO’s at Senior Executive levels has empowered Procurement to take control of ALL expenditure in some organisations This trend is growing……
Procurement Role in the Organisation In this scenario the undertrained and highly volatile nature of sales has left the Sales Profession far behind…. Low level investment in the industry as a whole For each Procurement Professional, there are exponentially more Sales People that need career investment There is no uniform approach Nationally, let alone Globally
LOWINTERMEDIATE ADVANCED - Unco-ordinated practices - Compliance Gaps - Resource Intensive - Pockets of Expertise - Foundations Est’d - Improved Controls - Centre of Excellence - Broad Remit Across all Expenditures TransactionalTactical Strategic Buy Side Buy and Sell Side Maturity
LOWINTERMEDIATE ADVANCED - Unco-ordinated practices - Compliance Gaps - Resource Intensive - Pockets of Expertise - Foundations Est’d - Improved Controls - Centre of Excellence - Broad Remit Across all Expenditures TransactionalTactical Strategic Buy Side Buy and Sell Side Maturity Generally, Buyers are Here
- Price - Features - Script LOW - Cost - Advantages - Issues - Value - Benefits - Solutions INTERMEDIATE ADVANCED - Unco-ordinated practices - Compliance Gaps - Resource Intensive - Pockets of Expertise - Foundations Est’d - Improved Controls - Centre of Excellence - Broad Remit Across all Expenditures LOWINTERMEDIATE ADVANCED TransactionalTactical Strategic Sell Side Buy Side Buy and Sell Side Maturity Generally, Buyers are Here
- Price - Features - Script LOW - Cost - Advantages - Issues - Value - Benefits - Solutions INTERMEDIATE ADVANCED - Unco-ordinated practices - Compliance Gaps - Resource Intensive - Pockets of Expertise - Foundations Est’d - Improved Controls - Centre of Excellence - Broad Remit Across all Expenditures LOWINTERMEDIATE ADVANCED TransactionalTactical Strategic Sell Side Buy Side Buy and Sell Side Maturity Generally, Sellers are Here Generally, Buyers are Here
- Price - Features - Script LOW - Cost - Advantages - Issues - Value - Benefits - Solutions INTERMEDIATE ADVANCED - Unco-ordinated practices - Compliance Gaps - Resource Intensive - Pockets of Expertise - Foundations Est’d - Improved Controls - Centre of Excellence - Broad Remit Across all Expenditures LOWINTERMEDIATE ADVANCED TransactionalTactical Strategic Sell Side Buy Side Generally, Sellers are Here Buy and Sell Side Maturity Buyers Want to be Here
- Price - Features - Script LOW - Cost - Advantages - Issues - Value - Benefits - Solutions INTERMEDIATE ADVANCED - Unco-ordinated practices - Compliance Gaps - Resource Intensive - Pockets of Expertise - Foundations Est’d - Improved Controls - Centre of Excellence - Broad Remit Across all Expenditures LOWINTERMEDIATE ADVANCED TransactionalTactical Strategic Sell Side Buy Side Buy and Sell Side Maturity Buyers Want to be Here Sellers Need To Be Here
- Price - Features - Script LOW - Cost - Advantages - Issues - Value - Benefits - Solutions INTERMEDIATE ADVANCED - Unco-ordinated practices - Compliance Gaps - Resource Intensive - Pockets of Expertise - Foundations Est’d - Improved Controls - Centre of Excellence - Broad Remit Across all Expenditures LOWINTERMEDIATE ADVANCED TransactionalTactical Strategic Sell Side Buy Side Buy and Sell Side Maturity Buyers Want to be Here Sellers Need To Be Here
- Price - Features - Script LOW - Cost - Advantages - Issues - Value - Benefits - Solutions INTERMEDIATE ADVANCED - Unco-ordinated practices - Compliance Gaps - Resource Intensive - Pockets of Expertise - Foundations Est’d - Improved Controls - Centre of Excellence - Broad Remit Across all Expenditures LOWINTERMEDIATE ADVANCED TransactionalTactical Strategic Sell Side Buy Side Buy and Sell Side Maturity Buyers Want to be Here Sellers Need To Be Here Sellers Need To Be and Here Sellers Need To Be Here
Procurement 101…The 5 Rights Right Quality, the Right Quantity, at the Right Price, at the Right Place, at the Right Time.
Sales 101… At least…. Know the 5 Rights and Be able to articulate them in your offer
Who is the DMU In a world of acronyms, why not enjoy the process: Decision Making Units (also known as Buying Centres) are: Usually group(s) of employees, or members of an organisation, who are responsible for finalising major decisions (it may be represent by various stakeholders) Source: Para-phrased from Wikipedia
How to respond to a DMU Clearly describe the attributes of your offer as Benefits Outline the improvement in your prospects business Articulate the value explicitly matched to the need
How to respond to a DMU Clearly describe the attributes of your offer as Benefits Outline the improvement in your prospects business Articulate the value explicitly matched to the need
How to respond to a DMU Clearly describe the attributes of your offer as Benefits Outline the improvement in your prospects business Articulate the value explicitly matched to the need
How NOT to Respond to a DMU…. (In Our Settled Opinion) Avoid Corporate Clichés: Your Pain Points Our People Value Propositions Unique Solutions We Listen to your Needs! Best in Market Solutions Some of our Competitors Our Benefits
How NOT to Respond to a DMU…. (In Our Settled Opinion) Avoid Corporate Clichés: Your Pain Points Our People Value Propositions Unique Solutions We Listen to your Needs! Best in Market Solutions Some of our Competitors Our Benefits Also don’t oversell….. Eco Anything CSR Anything Sustainable Anything Driving Anything Partnering Anyone
What do Procurement People mean when they say… You came 2 nd overall………………………………………..
What do Procurement Managers mean when… You came 2 nd overall……………………………………….. You came 2 nd, 3 rd, 4 th etc
What do Procurement Managers mean when… You came 2 nd overall……………………………………….. I could throw a blanket over all the bids……………….. You came 2 nd, 3 rd, 4 th etc
What do Procurement Managers mean when… You came 2 nd overall……………………………………….. I could throw a blanket over all the bids……………….. You came 2 nd, 3 rd, 4 th etc You didn’t articulate your benefits
What do Procurement Managers mean when… You came 2 nd overall……………………………………….. I could throw a blanket over all the bids……………….. We made the decision on Price………………………….. You came 2 nd, 3 rd, 4 th etc You didn’t articulate your benefits
What do Procurement Managers mean when… You came 2 nd overall……………………………………….. I could throw a blanket over all the bids……………….. We made the decision on Price………………………….. You came 2 nd, 3 rd, 4 th etc You didn’t articulate your benefits We made the decision on Price
What do Procurement Managers mean when… You came 2 nd overall……………………………………….. I could throw a blanket over all the bids……………….. We made the decision on Price………………………….. We couldn’t see the value in your offer……………….... You came 2 nd, 3 rd, 4 th etc You didn’t articulate your benefits We made the decision on Price
What do Procurement Managers mean when… You came 2 nd overall……………………………………….. I could throw a blanket over all the bids……………….. We made the decision on Price………………………….. We couldn’t see the value in your offer……………….... You came 2 nd, 3 rd, 4 th etc You didn’t articulate your benefits We made the decision on Price
What do Procurement Managers mean when… You came 2 nd overall……………………………………….. I could throw a blanket over all the bids……………….. We made the decision on Price………………………….. We couldn’t see the value in your offer……………….... The evaluation process showed a clear winner……..... You came 2 nd, 3 rd, 4 th etc You didn’t articulate your benefits We made the decision on Price
What do Procurement Managers mean when… You came 2 nd overall……………………………………….. I could throw a blanket over all the bids……………….. We made the decision on Price………………………….. We couldn’t see the value in your offer……………….... The evaluation process showed a clear winner……..... You came 2 nd, 3 rd, 4 th etc You didn’t articulate your benefits We made the decision on Price You didn’t read the evaluation process
What do Procurement Managers mean when… You came 2 nd overall……………………………………….. I could throw a blanket over all the bids……………….. We made the decision on Price………………………….. We couldn’t see the value in your offer……………….... The evaluation process showed a clear winner……..... The evaluation committee decided…………………….. You came 2 nd, 3 rd, 4 th etc You didn’t articulate your benefits We made the decision on Price You didn’t read the evaluation process
What do Procurement Managers mean when… You came 2 nd overall……………………………………….. I could throw a blanket over all the bids……………….. We made the decision on Price………………………….. We couldn’t see the value in your offer……………….... The evaluation process showed a clear winner……..... The evaluation committee decided…………………….. You came 2 nd, 3 rd, 4 th etc You didn’t articulate your benefits We made the decision on Price You didn’t read the evaluation process You didn’t articulate your benefits
What do Procurement Managers mean when… You came 2 nd overall……………………………………….. I could throw a blanket over all the bids……………….. We made the decision on Price………………………….. We couldn’t see the value in your offer……………….... The evaluation process showed a clear winner……..... The evaluation committee decided…………………….. The best value bid was selected…………………………. You came 2 nd, 3 rd, 4 th etc You didn’t articulate your benefits We made the decision on Price You didn’t read the evaluation process You didn’t articulate your benefits
What do Procurement Managers mean when… You came 2 nd overall……………………………………….. I could throw a blanket over all the bids……………….. We made the decision on Price………………………….. We couldn’t see the value in your offer……………….... The evaluation process showed a clear winner……..... The evaluation committee decided…………………….. The best value bid was selected…………………………. You came 2 nd, 3 rd, 4 th etc You didn’t articulate your benefits We made the decision on Price You didn’t read the evaluation process You didn’t articulate your benefits We made the decision on Price
What do Procurement Managers mean when… You came 2 nd overall……………………………………….. I could throw a blanket over all the bids……………….. We made the decision on Price………………………….. We couldn’t see the value in your offer……………….... The evaluation process showed a clear winner……..... The evaluation committee decided…………………….. The best value bid was selected…………………………. We are happy to give you a de-brief…………………... You came 2 nd, 3 rd, 4 th etc You didn’t articulate your benefits We made the decision on Price You didn’t read the evaluation process You didn’t articulate your benefits We made the decision on Price
What do Procurement Managers mean when… You came 2 nd overall……………………………………….. I could throw a blanket over all the bids……………….. We made the decision on Price………………………….. We couldn’t see the value in your offer……………….... The evaluation process showed a clear winner……..... The evaluation committee decided…………………….. The best value bid was selected…………………………. We are happy to give you a de-brief…………………... You came 2 nd, 3 rd, 4 th etc You didn’t articulate your benefits We made the decision on Price You didn’t read the evaluation process You didn’t articulate your benefits We made the decision on Price I hope that they don’t want a de-brief
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