Paul Vincent - CPG Event 10th November - The Knowledgeable Buyer

Slide 1

IBC Consultancy Purchasing Group Event

10th November 2010

The ‘Knowledgeable’ Buyer

Paul Vincent

Slide 2 The ‘Knowledgeable’ Buyer – Paul Vincent [10th November 2010] Consultancy Purchasing Group Event

"Attitude is a little thing that

makes a big difference"

Winston Churchill


I encounter a common image of procurement...

Windows on the World


• Procurement don’t have a say in the operational budget

• Procurement don’t understand the business need

• Procurement don’t know what ‘good looks like’

• Procurement might give the work to someone else

• Procurement only care about price

...and some corresponding core beliefs


Best to leave engagement with procurement until it is unavoidable !


Perceived Role of Procurement =



Traditional Procurement Flow

Internal ClientSpecification

Supply MarketNegotiation/Contract

ProcurementSourcing Exercise

Understanding the order of things

Typical Consultancy Procurement Flow

Consulting FirmGreat Idea

Internal ClientNeed/Cost

Internal ClientNeed/Budget

Consulting FirmProposition/Cost

ProcurementFormalise Deal/Contract

The Role of Procurement


The key challenges in managing this category

• Becoming an integral part of the end to end buying process• Ensuring procurement are involved at the right time• Relating most appropriately to the supply market

Inclusion

• Delivering real business value to internal stakeholders

Contribution


• Adequately protecting corporate terms and conditions• Ensuring the business achieves ‘best value for money’ • Implementing effective processes not unnecessary bureaucracy

Approach


Internal ClientNeed/Cost

Consulting FirmProposition/Cost

Consulting FirmGreat Idea

Internal ClientNeed/Budget

Procurement Facilitate Discussion/Selection

& Contract Terms

The ‘Knowledgeable’ Procurement Flow


A ‘knowledgeable’ buyer will focus their involvement and influence in achieving successful engagement outcomes

This approach will guarantee best value for money


“Quality means doing it right

when no-one is looking"

Henry Ford


Instinctively ‘anticipates’ business needs

• Business improvement needs will rarely feature in a category strategy

• Predict where needs may emerge during the year ahead – identify the parts of your organisation who face the biggest challenges

• Leverage your management chain to learn about emerging ‘problems’ or ‘pressure points’

• Track the organisational movements of ‘key’ executives – especially at certain times of the financial year

A Knowledgeable Buyer – Business Improvement Services


Intuitively ‘monitors’ the political landscape

• Who seems to have inherited a problem?

• Who seems to be causing a problem?

• Who needs/wants ‘rescuing’?

• Who wants/needs support?



Tunes into the ‘urgency’ of business needs

• When Business Improvement needs emerge they are NOT suited to a long drawn out selection exercise – a degree of supply ‘filtering’ must be done in advance

• Buyers need to recommend the selection process that is most likely to deliver the ‘best fitting’ choice

• Business Improvement engagements are almost always ‘phases’ of work – but not all phases need to be bought at the same time and from the same firm



Helps shape the ‘scope’ of work

• Internal clients can sometimes be blinded by the scale of their challenge and spend insufficient time on root cause analysis. Buyers 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 and possible best practice

• In particular help them to define the specific outcomes required



Recommends the ‘best fit’ supply options

• Who has your organisation used before and how did they perform?

• Are they still as capable or has something changed in their organisation (e.g. key person left)

• Could/should they be re-engaged?

• If an alternative choice is required –how widely should you cast the net?



Contributes to ‘setting’ the key milestones

• Core principle - payment by outcome/results but...

– Needs to be appropriately applied

– Plan needs to be realistically achievable

– Needs to take account of the ‘real’ baseline



Supports the ‘delivery’ of project outcomes

• Practically support ‘on-boarding’

• Once supplier has been selected ‘help’ create the environment for success

• Stay close to progress – don’t just wait for the client to keep you informed

• Spot potential issues before they become escalations



Ensures there is a ‘feedback loop’ in all cases

• Firms are often only as good as their last project in your organisation

• Consulting firms don’t want to be known for unsuccessful engagements

• Tie feedback to payment if you can – but be reasonable about it

• Feedback is two way – expect issues to be created by internal clients too



“He who asks a question is a fool

for a minute; he who does not

remains a fool forever"

Chinese Proverb

A Sensible Consultant will develop a positive relationship with a Knowledgeable Buyer

Slide 19

IBC Consultancy Purchasing Group Event 10th November 2010

The ‘Knowledgeable’ Buyer

Thank You