Procurement Success in 2018 – Some Simple (But Important) Reminders

Happy New Year and welcome back after the holiday season – we are getting back to full coverage here at the dynamic head office of Spend Matters after a break full of bacchanalian excess, lavish parties and over-indulgence.

OK, that’s a lie. But if you're really interested, I could bore you with all the details of  my five-and-a-half-hour drive from Surrey to Sheffield on December 27th, as I avoided motorway pile ups, vehicles on fire on the M1, grid-lock in Chesterfield … my last few miles (to avoid Chesterfield) I ended up driving half way up into the Pennines, which was incredibly beautiful after the overnight snow.

Anyway, it is traditional that we pontificate about the prospects for 2018 at this time of year, as well as suggesting some resolutions, ideas or goals that procurement professionals might want to adopt. So, in that spirit, here is our advice – very simple really. It is just to remember these four key points.

+ Procurement’s role is to lead in terms of the interface between our organisation and external supply markets.*

+ Procurement must in all situations strive to be aligned with the organisation’s objectives, goals and culture.

+ Procurement supports and achieves value for our organisations by a duality of approach in terms of that external supply - managing risk and looking for opportunities.

+ Procurement has only two raw materials available to deliver against those first three points. They are people and tools (which generally means technology these days). Everything procurement achieves is through people using those tools appropriately.

(*Note that “lead” does not mean “do everything ourselves”. Also note that “interface” includes participating in decisions around internal versus external supply where appropriate).  

Simple really! But perhaps in terms of New Year resolutions, start with the last of those points. Do you personally have the skills you need to succeed, grow and thrive in 2018? Does your function or your organisation have the commercial and related skills, attitudes and experience that are needed? And do you have tools that will support your people in achieving success?

If not, look at how you can start to address that in 2018. Remember, you can’t go from zero to hero in 12 months, but also remember that going from a position as a lower-quartile procurement function to being a mid-range performer is just as worthwhile (and difficult) as moving from being good to being a true leader.

Good luck anyway, and all our best wishes for a happy, healthy and successful 2018.

First Voice

  1. Chris Stokes, Naritas Consulting:

    Here are some more New Year’s Resolutions for procurement professionals …

    1. Remember that suppliers don’t have unlimited capacity to bid for work, they will pick and choose what they go for. So if it is clear what you are trying to procure and what they need to do to submit, and you give them a sensible time to prepare their pitches, there is more chance that they will submit a tender to you.

    2. Stick to deadlines, or if things change, keep bidders informed as soon as you know. If you really don’t know when things will happen, don’t just make up an unrealistic timetable. If anything, be pessimistic on timescales, and remember that it almost always takes longer to evaluate tenders than you expect.

    3. Get someone independent of the procurement team to read through your tender document with the eyes of a supplier. Ideally someone outside your organisation – some independent procurement professionals offer this as a service. They will often pick up inconsistencies or ambiguities which you can fix before you get 10 suppliers asking you to clarify (and it makes you look more professional).

    4. Make it easier to evaluate tenders by breaking up questions into manageable sections. Don’t just have a 20 page specification and a single question of “Describe how you will meet the specification” with 10 pages for the response.

    5. Excel is great for figures, but useless for large chunks of text answers. Think very carefully before you ask bidders to submit large text answers in small Excel cells. Filling in text boxes on a portal is just about OK, but it is far easier to read a decent Word or PDF document than a text-only answer with no formatting.

    6. If you are setting page/word/character counts, think about what is sensible for the level of detail you want suppliers to complete rather than an arbitrary number of pages for each question or a number of characters set by what the portal allows as standard. If you ask for a maximum of six pages, the expectation amongst bidders is that they should do no less than five and a half even if some of that is irrelevant padding! Also setting counts for individual questions is usually better than an overall page count for the whole document, as it focuses the minds of suppliers on what is important to you rather than where they can waffle the best.

    7. When you get clarification questions, think about the answers in the light of what you asked for and the clarifications already issued. Sometimes bidders will ask clarification questions not because they are confused but because they want to change your requirements to something that suits them better. Be especially wary when bidders ask you “please can you confirm that what you (really) meant was XYZ” – often it is not but XYZ is what they are selling.

    8. If you are in the public sector, make sure you understand the difference between public sector and private sector procurement. There are lots of things that are entirely sensible in the private sector (eg taking account of the track record of suppliers when awarding a contract) that are prohibited in the public sector.

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