Not-my-kind - #Entrepreneur meets Procurement

Hunter Johnson @Unsplash

Having regularly attended events for Entrepreneurs and talked with (potential) suppliers off the record, I believe it's safe to say that there is not much love lost between Entrepreneurs and Procurement. There seems to be a huge amount of grief against the function seen as a deal blocker for small business. The most pointed feedback was at a conference when a slightly drunk agency representative gave me a 30 minute rant about how crap Procurement was and how no self-respecting professional would ever enter this field. Harsh, and not particularly constructive (my company was a client moreover).

We will focus on the other side of the story, some of the justified criticisms of a function in another post. This time we'd like to talk about the Entrepreneur and how to approach meetings with Procurement representatives more positively and understand their drivers.

As an entrepreneur you may not have dealt with Procurement when starting to work with a client. You may have networked your way in with someone from the client department. The deal amount may have been too small to interest procurement or warrant a full contract to be signed. Trying to establish new contacts at companies, Procurement may also not strike you as the most promising place to get your foot in the door. But here are some pointers how to put Procurement on your radar, understand how to deal with the function and even gain it as an ally to do business:

Meeting Procurement at a networking event:

  • ask them what they look for in suppliers in your space and what challenges they are looking to solve more generally
  • check if there are any upcoming bid opportunities and if they have preferred supplier programs. Also ask if they have a specific program for SME suppliers or Tier 2 supplier program and who the partners are in charge of those
  • Use your (short) slot wisely and give a concise, memorable elevator pitch on what you are about (http://www.unblandeur.com/blog/2016/11/4/pitching-what-is-your-elevator-pitch) and hopefully you can link some of it back to the challenges mentioned

Remember that there are probably many competitors out there providing similar services. Presenting a "me too" service with no clear focus or wanting to cover everything as a small firm will probably not attract interest. A clear profile, strategy and stated strengths presented confidently in a few minutes leave an impression.

Meeting Procurement for a negotiation:

  • ensure the representative comes well prepared with all the facts what you are delivering for the company, ideally some insights on competition and how you deliver value to the company
  • procurement will always have a cost savings target. Think about how you can offer incremental savings over a contract and what your levers in addition to just a straight discount on rates. Be clear on the conditions (eg. x% discount for a contract commitment of x months)
  • before spending time changing the contract language extensively (and expensively) through a lawyer, establish what the key issues/risks for you with the required terms are and discuss how they can be mitigated. State what your concern is rather than just request to change clause X
  • use the negotiation to build a relationship as well and state your interest to do more. This may be a pressured situation and Procurement may come across as the adversary. But people keep positive people in mind and prefer to work with these.

And: Learn negotiation techniques, your Procurement partner probably has and you'll speak a similar language of solution finding hopefully. "Getting to Yes" by Bruce Patton, Roger Fisher, and William Ury is a classic in that context.

Contacting Procurement on an ongoing basis:

  • reach out and say hello to your Procurement contact when onsite. Share some news how things are going on the engagement (which they may not hear internally) and any news from your end
  • if there are operational issues, like delayed purchase orders or payment, address it with your Procurement contact and give them enough details so they can internally follow up. Often the business stakeholders, not fully fluent in the process, forget important steps and Procurement is not aware. But they can usually help.
  • If you have implemented a great solution with another client, especially one that may help Procurement with their targets of operational efficiency and savings, briefly share the experience and see if there is interest.

Truly constructive, proactive suppliers are a rather rare find and those are usually treasured by anyone, including Procurement. Creating joint efficiency initiatives instead of just a one-sided cost-cut push especially are a rewarding experience and those suppliers tend to have a very long shelf life.

Checking Procurement programs:

  • many companies now have SME Supplier or Supplier Diversity programs. Registering online or attending an event may be a good opportunity to position yourself
  • Public procurement especially have targets around including SMEs for opportunities. Public tender opportunities are published for everyone to access

We are on occasion running events for Entrepreneurs who want to learn how to navigate procurement processes successfully and have had great feedback in the past. Watch out for future events, feel free to make suggestions and contact us for any custom demands.

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