What Happens Inside the Procurement Mind?

By Michael Pearson, Founder of Inside the Procurement Mind

As the Procurement function’s influence over corporate decision-making on suppliers grows ever stronger, the Procurement professional is a key person to engage with in the sales process.

With over 30 years of experience in the profession, let me give you some insight into what is going on inside the Procurement mind at different stages of the engagement.

INITIAL CONTACT

If you are engaging with a particular business area and you learn that Procurement will be involved in the process, don’t avoid them – make contact proactively. Ask about the process and offer to provide anything they might require at this stage. Don’t give the impression you believe the deal is almost done; like it or not, Procurement people are innately suspicious of suppliers, especially those who have already been engaging directly with the business and haven’t been subject to formal competition.

RESPONDING TO REQUESTS FOR PROPOSALS

On day one as a Procurement professional, you are taught the importance of competition and how to run an RFP. Here are some tips on how to respond to them:

• Deciding who to invite to bid is often less systematic than you might think and can depend simply on most recent communications – stay in regular touch with your Procurement contact.
• Err on the side of comprehensive rather than concise but consider the reader and keep detail in attachments or appendices where possible.
• Avoid asking for an extension if you possibly can – they are a real pain for Procurement.
• Where there is an incumbent supplier in place, there is always a strong ‘Why change’ or ‘Time for a change’ dynamic - try to find out which is in play.
• If you are the incumbent, trail lots of innovation in the months leading up to the RFP and reference this in your response.
• Public sector procurement: remember there is a real fear of a legal challenge on any decision so they are often more rigid and less open to different approaches.

GIVING PRESENTATIONS

Having sat through hundreds of supplier presentations, here is my practical advice:

• Consider carefully who should attend and make sure everyone has a role.
• Decide who the lead is.
• Keep to given timings for your presentation and give concise answers to questions.
• Know your audience – they are likely to have different priorities.
• Try to build rapport but rather like dating, accept it sometimes just isn’t there.

NEGOTIATING

This is every Procurement professional’s favourite part of the job and they usually have a savings objective to achieve. They will never believe your first price is your best price but if they are negotiating, it probably means you are already in the right ballpark.

When challenged on price, ask for specifics and try to focus on the value; don’t dissemble. Whatever you might say, Procurement will never believe that a month/year end deal won’t be there next month/year.

Finally, be aware who the true decision maker is – it isn’t usually Procurement.