What are the true drivers for the modern Procurement Professional ? October 2014

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

In reality, it’s a

subjective process in

an objective world

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


• Reduce



• Reduce – Cost, Space, People, Touch, Time, Risk




• Rationalise



• Rationalise – Suppliers, Spend, Users, Procedures





• Simplify





• Simplify – Processes, Controls, Requirements, Relationships


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-MotivatorsSuccess Failure

Reward Retribution

Validation Exposure

Control Panic

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….


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……


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

LOW 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

Transactional Tactical Strategic

BuySide

Buy and Sell Side Maturity


- Unco-ordinated

practices

- Compliance Gaps




- Improved Controls



all Expenditures


BuySide


Generally, Buyers are Here

- Price

- Features

- Script

LOW

- Cost

- Advantages

- Issues

- Value

- Benefits

- Solutions

INTERMEDIATE ADVANCED

- Unco-ordinated

practices

- Compliance Gaps




- Improved Controls



all Expenditures




Sell Side

BuySide



- Price

- Features

- Script

LOW

- Cost

- Advantages

- Issues

- Value

- Benefits

- Solutions


- Unco-ordinated

practices

- Compliance Gaps




- Improved Controls



all Expenditures




Sell Side

BuySide


Generally, Sellers are Here


- Price

- Features

- Script

LOW

- Cost

- Advantages

- Issues

- Value

- Benefits

- Solutions


- Unco-ordinated

practices

- Compliance Gaps




- Improved Controls



all Expenditures




Sell Side

BuySide

Generally, Sellers are Here

Buy and Sell Side MaturityBuyers Want to be Here

- Price

- Features

- Script

LOW

- Cost

- Advantages

- Issues

- Value

- Benefits

- Solutions


- Unco-ordinated

practices

- Compliance Gaps




- Improved Controls



all Expenditures




Sell Side

BuySide


Sellers Need To Be Here

- Price

- Features

- Script

LOW

- Cost

- Advantages

- Issues

- Value

- Benefits

- Solutions


- Unco-ordinated

practices

- Compliance Gaps




- Improved Controls



all Expenditures




Sell Side

BuySide




- Price

- Features

- Script

LOW

- Cost

- Advantages

- Issues

- Value

- Benefits

- Solutions


- Unco-ordinated

practices

- Compliance Gaps




- Improved Controls



all Expenditures




Sell Side

BuySide



Sellers Need To Be and HereSellers 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 offeras Benefits

• Outline the improvement in your prospects business

• Articulate the value explicitly matched to the need

BenefitsAdvantages

Features

Success





BenefitsAdvantages

Features

Success

Apply the “So What”

test for each

Benefit you express





BenefitsAdvantages

Features

Success

Apply the “So What”

test for each

Benefit you express

Does it“Increase Pleasure”

or “Decrease

Pain”

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 2nd overall………………………………………..

What do Procurement Managers mean when…

You came 2nd overall………………………………………..You came 2nd, 3rd, 4th etc



I could throw a blanket over all the bids………………..

You came 2nd, 3rd, 4th etc





You didn’t articulate your benefits




We made the decision on Price…………………………..









We made the decision on Price





We couldn’t see the value in your offer………………....


















The evaluation process showed a clear winner…….....















You didn’t read the evaluation process







The evaluation committee decided……………………..


























The best value bid was selected………………………….






























We are happy to give you a de-brief…………………...
















We are happy to give you a de-brief…………………...








I hope that they don’t want a de-brief

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What are the true drivers for the modern Procurement Professional ? October 2014