Spend Matters – consultants take a hit as procurement influence grows

Jason over at Spend Matters has a very interesting piece on procurement of professional services and McKinsey type consultancy in particular. Well worth reading and it is good to see procurement impact stretching into 'new' territories.

But I do question just how many procurement functions really have the reach, credibility, and  capability to play in the treacherous and challenging waters of C-suite and strategy consultant engagement....

Anyway, it took me back to NatWest in the late 90s. We were trying to get to grips with our considerable spend in the consulting category. We put in place a framework of suppliers - basically, as a first step, the ones our stakeholders wanted to use.  We negotiated some rates and Ts and Cs, getting some reasonable reductions from rate card in return for 'preferred supplier' status.

The one firm who wouldn't play ball initially were McKinsey.  They insisted that they only quoted and charged on a team basis; you pay for a named team, with pretty unspecified time commitment, at a rate of £20,000 a month or whatever.  No negotiation, no discounts.

Finally, after months of negotiation, my category manager (Tony Ray) cracked them and we got some day rates.  Now I know days rates are not always the best payment structure anyway; but it certainly felt like a victory at the time.  Tony was a very unflashy sort of procurement manager ( a man for whom the term 'quiet, dogged persistance' might have been invented) but I always thought he deserved an award for getting the better of McKinsey!  And if anyone knows what he is doing now, as I lost touch with him some years ago, send him this link and tell him I'd love to buy him a beer.

I also very nearly joined McKinsey once but that is a whole different story,  and one only to be told after several beers....A lucky escape (for McKinsey of course).

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