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Insight

Procurement – above all, it’s about people

Christian Ingram

When selecting vendors, it pays to see the big picture and take the long-term view. This is all the more critical when you’re involved in big complex projects where bringing the wrong vendors in or agreeing the wrong terms can prove to be a very costly mistake.

So where do you start and what should you focus on? Above all, on the people, rather than simply the paperwork or upfront price.

Forging successful procurement relationships

With procurement, it’s tempting to emphasize the paper that inevitably comes with the process – from RFIs to final contracts. And also the price at the point of purchase, so that the vendor with the lowest upfront costs might take precedence. But in our experience, to forge a successful relationship with your vendor that delivers value for your business over the long-term, the critical focus should be on people.

People do the work and make the vital difference. Moreover, it’s a long-term evolving process - you want people who will work with you through the inevitable twists and turns of a project. So you have to get the right ones on board and agree mutually beneficial terms to help ensure your project is delivered successfully.

The 'p' in procurement stands for people, rather than paper or price.”

So how do you go about doing it well? Here are some key principles.

Selecting vendors for long-term success

  • Look beyond the capabilities set down on paper. Make sure you take the time to get to know and test your vendors properly – particularly the people who you and your teams will be working with directly. Maximize the exposure of your people to the vendors’ people – before, you sign them up.
  • Design and tailor a rigorous process that takes you from your business objectives through to the selection and mobilization of the vendors that best meet your needs. Don’t just go for a standard paper-based approach.
  • Include a good cross-section of stakeholders in the selection process to help strengthen the decision and secure broad buy-in. Don’t leave the evaluation and selection just to senior people – engage and involve the people who will be working with the vendors on a day-to-day basis.
  • Don’t simply go for the vendor with the lowest upfront price or the biggest discount at the point of purchase. If you beat vendors down on their rates, they may well find ways to recoup money further down the line. Far better to make a mutually beneficial agreement up front that focuses everyone on working together to achieve shared objectives over the long term.
  • Build in flexibility. So when circumstances change – as is often the case with big complex projects running over relatively long periods of time – everyone involved is ready and willing to adapt together in the interests of the project’s success.

These are just some of the lessons we’ve learned as we’ve worked with clients to select and mobilize their vendors. If you’d like to discuss how we can help you choose the right ones for your business, we’d love to hear from you.

The author

Christian Ingram, Partner