Weighing up the Pro’s and Con’s In Procurement

I remember looking for solutions to established problems or being at that stage of looking for problems in my organization, defining what they are then prioritizing them? I knew I didn’t know what I needed to know. I didn’t even know if I had a problem because I didn’t know of a better way to do or achieve something. I knew what I knew but felt there should be ways of improving things, so research began.

Understanding Your Procurement Values

There are four stages of service delivery.

Planning stage which encompasses research and awareness. Once you have established your key areas that require improvement move to the next stage.

Finding stage which encompasses research defining your solution specifications. You build a list of potential solution providers based of service capabilities and specifications.

Consideration stage is where you spend the time shortlisting providers. You need to understand what is important to you when it comes to service delivery segments IE Features, Quality, Customer Service, Culture of a provider or Price. You need to prioritize the value of the segments of service delivery a provider is offering in order to make a calculated decision.

Decide stage is where you choose and negotiate your service provider. Finally you define your bottom line cost and return and be prepared to walk away..

It’s In the Detail

At the Awareness stage of your search you work your way through layers of perspective starting from a perspective looking at macro processes that directly affect four key areas building revenue, reducing expense, improving control cashflow and maximizing customer satisfaction down to granular processes that impact your business.

Ask yourself what is my priority at the moment at the stage the business is at. Look at communications processes and impact. Define the main problem through a review of current services.

For example telecommunications, when everyone had an on premise PABX they looked at this every 5 years and reviewed their actual carrier costs separately every 2 or 3 years. As business moved to hosted PBX that made requirement for on premise PBX redundant and linked the carrier component to the PBX decision. The only hardware left was the desktop handset as a VoIP phone, now the handset is becoming redundant as business moves to soft phones on their various devices. Many businesses are moving away from all business phone services to only use the mobile phone.

Analytics and Ai is adding a dimension to call center solutions we could only have dreamed of a few years ago. Imagine a service where the phone system picked up key words or changes in the voice pitch of a caller or even monitored calls so even a sigh was registered and alerted team leaders as to what was being said or how something was being said on active calls allowing them to step in if required to maximize the call outcome.

Understanding phone system capabilities along with the ability to reduce carrier rates means organizations can blend their knowledge to create solutions that may provide the ability to upgrade phone systems, introduce the latest call centre technology without an additional cent being added to the monthly bill!

Awareness and research are a constant in this ever-changing world.

Now you move into the Consideration stage to short list the actual service or possible solution options. Your awareness stage has uncovered features that will add value but you now add in Service Quality, Customer Service, Culture and Ethics and of course Price into the mix as part of your consideration process. What guarantees are offered to ensure quality and support. What do we mean by Culture and Ethics when it comes to organisations. An entire blog awaits this topic but in short what sort of organization and people do you want to work with.

One definition of culture suggests there are 4 different company cultures,

Hierarchy – Highly structured management and decision-based company. Will provide consistency but may not be as innovative.

Sales Focused – Competitive and sales focused company puts profitability over process and internal management. This often has a higher staff turnover but offer stronger relationships with key people if you are growing. If your service is just a day to day service you may not get the attention you require.

Family Focused – This is a collegical culture that is inclusive. This is a relationship type business that will build strong client / supplier relationships. You tend to get the team working for you rather than an individual.

Innovation Focused – This company is a product of the current trend to innovation. It is a constant new product driven organization. Often seen as a millennial structure. They will bring new ideas and innovation to partnerships but may lack consistency.

One size does not fit all when it comes to culture, and there are many models you can use to understand the specific nature of yours. Look at where your culture may sit along the cultural spectrums (below).

Culture IQ – identifying your company culture

Dependent on your own value system you will need to bench mark and weigh the various offerings. This will expose what is important to you. You may be surprised to find price is not the top priority. What percentage of your final decision is allocated to each segment? E.G.

Use this percentage comparison process in all your decision making. Often the price percentage and quality percentage are about the same so given the service or product satisfies your requirements then differentiators become important such as additional off spec features, customer service and culture and ethics.

Have a look at your current services and really assess whether they are truly aligned with your values. You might find your paying too much for the actual quality you get or actually are getting a great deal because the service is just a commodity but the support and customer service you get are much better than that of other providers. Either way this will determine if you are getting value for money.