Project outcomes are often largely determined by the way the procurement process is run and a client engages with the supplier. Paul Roddis gives the vendor’s perspective on how to get it right.
Having been pretty much exclusively on the vendor side, I’d thought I’d share my thoughts on the buyer/supplier relationship and how the end of the project is often determined by its start, and what happens well prior during the sales process.
The term ‘strategic partner’ is often bandied around quite liberally. A tag easily applied, it often represents no more than a factor of a revenue spend by that client versus the supplier’s sales targets.
As a vendor, during the sales process, we try to provide a linkage and bridge the gap between a client’s needs and our own domain skills and experience.
When a client has a need, they will normally go to existing vendors and vendors that are signatories to the procurement service agreements (in the case of consulting). However, no amount of branding or company and product promotion will compete with personal relationships and individual networks. These relationships are hard-earned and often forged through ‘hard yards’ project delivery, working side by side late at nights and weekends delivering projects at the coalface, and often build into the best strategic partnerships where success is mutual and outcomes intertwined. Where your staff and project teams have these relationships, recognise them and engage procurement accordingly to yield the benefits.
Sometimes you have to look further afield though, and where companies haven’t worked together before and the relationship is a new one, the sales qualification process will normally flag risk. But clients often dramatically overlook the fact that the supplier is qualifying them as much as they are qualifying a supplier. The cost of pre-sales activity in pursuing a potential client is often as significant for the vendor as it is for the supplier. Even when we consider we have the right people, with the right skills, available at the right time and for the right price, we won’t pursue the project if the opportunity cost is too high.
In an environment such as the one we’re experiencing now, both vendor and supplier have to be very careful to pick the right opportunities to go after. So if we engage with you, we’re engaged. Often this isn’t reciprocated, and clients step back and play suppliers against each other through a protracted sales process. In some cases, the buyer hasn’t actually started a business case or is looking for information early in the process to build one. That’s why suppliers ask direct questions – they’re not being aggressive, but are just applying basic business logic and trying to avoid wasting each other’s time and money. Vendors are fine with you looking for information and building a business case for the longer term, but just be transparent about it.
During the engagement process, if the dialogue steps too far away from the core reason for the project, a business case and a pragmatic focus on how we can jointly deliver this outcome to the client, then we are open for trouble. If the relationship focuses on day rate costs, numbers of flights needed to deliver the project and per diem charges, then we lose focus. I’m certainly one to keep costs contained and realistic – gone are the days where staying in five-star hotels and taking full fare flights on national carriers were the norm. However, if we are expecting staff to commit themselves to time and effort away from their families and stay ‘engaged’ with a client, then we just expect fair and reasonable coverage for these expenses. The cost to the project will ultimately be a lot more if consultants don’t feel they’re being fairly treated, or the supplier signs up to a project and struggles to deliver.
At the end of the day, vendors are delivering a project outcome to meet a specific business need which must have an associated ROI and a business case to support the engagement. The pressure exerted on suppliers in times like these is quite heavy, with sales representatives (like myself) keen to sign new projects and engage with clients that are aligned to our core business. If the supplier’s sales team are not directly incentivised on delivery then be careful, as these situations seldom end well. I’m reminded of a British comedy sketch called ’Who sold you this then?’!
To achieve the right focus on project outcomes, through a holistic discussion which steps above procurement and IT, customers must allow suppliers to actively engage with executives within the business and with business owners. We should be able to meet these people early and often, and not be kept at arm’s length. The more strategic the project, the more engaged we’d expect them to be. If they’re not, then we’d be questioning why.
If you are a project manager engaged to deliver a project, and what you are handed by sales starts you at a place you feel uncomfortable with, then it is a tough road ahead. No project manager, however good, will make up for a project underpinned by poor procurement practices
Key tips for setting the right foundations with procurement
- If you go to market looking for suppliers to engage, make sure there is a project and that you are empowered to do so. Otherwise be transparent about what you are actually looking for.
- Remember that the right vendor may not be known to you already. Specific skills often need niche vendors and not generic ones.
- Listen to members of your team and leverage their experience and contacts.
- If you engage, be clear on the process and stick to it.
- Quickly shortlist vendors and properly engage with these vendors.
- Invest in the relationship and allow strategic dialogue to occur.
- Focus on the project’s end outcome. Make sure your procurement team and IT team follow suit – they should support the business, not the other way round.
Paul Roddis is managing director of Icon Integration
