Do you see view procurement as a threat and necessary evil that must be managed carefully on each deal or do you view them as an ally that can help you facilitate the procurement process? In Part 1 of this blog we will describe the changing role of purchasing and describe the lens of how they see sales representatives. In Part 2 (next week) we will provide a checklist with questions on how to better work with purchasing to make them partners and not adversaries.
Transformation of the Purchasing Role
Every financial tsunami reshapes for a time the operational landscape of global business. The economic downturn that began in 2007 changed business operations in ways that continue to influence how business is conducted in 2014. One notable change has been the redefining of how businesses make purchasing decisions.
Prior to the economic downturn, companies established capital budgets and thresholds for decision makers, often by department. Today oversight on any given purchase may be shared by several executives including budget and purchasing staffs. The senior management of most organizations entrusts purchasing with greater responsibilities and involvement in the buying process. This is reflected in four trends:
- In some organizations the proper term is purchasing but in other organizations strategic sourcing or strategic procurement
- Increased numbers of purchasing team members; instead of one or two purchasing officers, you may find yourself rotating among three or more.
- Increased specialization with focus on hardware, software, financial and healthcare expertise; these specialists have strong backgrounds in performance assessment for their area specifications.
- Increased responsibility for validating and reporting business benefits such as IRR, ROI, Payback, NPV, etc.
The Changing Lens
The lens through which purchasing is viewing each buying decision is changing. They are shouldering a greater load and the timeline for high priority projects is tighter than ever.
If we approach purchasing as an opponent or an undesirable critic, we are likely to find ourselves shut out of the purchasing process and closed off from valuable communication. Consider traditional differences between how sales representatives think and how purchasing executives think.
| How Sales Thinks: | How Purchasing Thinks: |
| “I’d like a quick decision.” | “This needs to have a thorough evaluation.” |
| “I need to recycle my strongest, most persuasive arguments for these guys.” | “I’m tired of slick arguments; show me the performance data I can rely upon.” |
| “I’ve built strong executive relationships; they know my solution’s value.” | “Senior management likes these guys but wants proof of benefits.” |
| “These guys haven’t even read my proposal that addresses planned benefits and projected value.” | “These guys haven’t even created a business case that provides measurable and convincing evidence of ROI.” |
| “I hope we can make this simple. What one concession can I make to close the deal?” | “I’m not sure where to begin with these guys so I guess we’ll have to go over all aspects of the deal.” |
| “I don’t know what Purchasing really wants other than a cheap price.” | “If I can’t find a compelling benefit I guess I’ll have to go back to price.” |
| “My proposal is far superior to my closest competitor.” | “If we can’t get a strong deal with them, we may have to stay with the status quo and review the situation next year.” |
