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I was reading the news paper this morning. The business section of our local paper always carries a section by Harvey Mackay. I have been reading Harvey’s column for years and have also read his books. The first one I read years ago was “Swim with the Sharks without Being Eaten Alive” . In the book Harvey discusses his Mackay 66, which is what his article was about today.  You can download a copy of the Mackay 66 for free on his website www.harveymackay.com.

Specifically Harvey’s list is focused on what you know about your customer. Most sales people could not fill this list out and answer all 66 questions for any customer they call on. The idea behind this list is that the more you know about your customer, the more the customer becomes personal to you. The reward should be obvious. If you don’t get it, you might need to stop reading and go fill out your list.

I have always managed my business relationships in this way and it works for projects too. Associates I have worked with over the years can all tell you about Ron’s A-Z sessions. The philosophy is that you keep asking and then answering questions and objections until there are no more.

So how does this work with procurement? Again, it should be obvious. The fact is it apparently is not based on my experience with most companies. Ask the average category manager or buyer what they can tell you about the product or service they are sourcing and they unfortunately can not tell you much.

It’s pretty simple to conduct an A-Z session. One simply starts by asking questions, answering them and continuing until you don’t have anymore questions. Yes you may have to spend some time researching the questions?

Example: Here’s a list to get you started. Each question should beg another question. When you run out of questions, you should have what you need to source the product or service.

1. What product or service are we buying?
2. How much do we need?
3. When do we need it?
4. How much did we buy during the last order cycle?
5. Do we have a specification?
6. Has the product or service changed at all since last purchased?
7. Is there a contract in place?
8. Where is the contract?
9. Do I have a copy of an invoice?
10. Who are our internal or external customers?
11. Who are our suppliers?
12. Are there additional suppliers?

You should be able to easily add another 25 questions to this list.

Here’s a hint, most procurement professionals are not subject matter experts on everything they have to source. The exercise above can be completed in less than an hour. Couple that with the research tools available to all of us today and suppliers websites and you might be the subject matter expert your customer needs.

Remember when you create value, customers will reward you and others will find you. If you would like to learn more about this post, contact a SafeSourcing associate.

We look forward to and appreciate your comments.

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Today’s post is by Mark Davis; Sr. Vice President of Operations and CTO at SafeSourcing.

Computer refreshes within an organization are common.  They typically require 3 different elements that require sourcing with a possible fourth if training requires inclusion as well.  In today’s post we are going to focus on the options for sourcing the three most common elements (Hardware, Software, and Installation Services) with the understanding that training could be easily added in the future.

Option 1 – Request For Quote all items

In this option the customer already has a detailed specification for everything they need and where it should go.  Option one involves taking all aspects of the refresh out to the vendor community for pricing as one event and in the process we would offer a competitive forum for them to adjust their pricing instantly. 

The advantages to this approach would be giving companies that can handle each piece, the opportunity to bid in such a way that they can offer additional discounts for getting all of the project spend, but this can also break the vendor focus up in a way that does not lend itself to getting the best savings on each product group. 

Option 2 – Request For Quote 3 separate events

This approach breaks out hardware, software and installation/configuration services into separate events for price gathering and compression.   The advantage to this approach is that it allows the focus to remain on the “like” items in each event and typically will drive the best savings.  Vendor participation tends to be higher because the focus is smaller and can include many more vendors who just handle that group of products/services.

The disadvantage would be that fitting the results back together takes a little more time and sometimes discounts for awarding the business to one company can fall out in the process, although they can still be asked for when a contract is negotiated.

Option 3 – Request For Proposal

This approach would treat the entire refresh as one large project.  You can provide the details to vendors who could handle the entire project and request details about who they are, their qualifications and any other additional services or value add items they wish to include.  Pricing would be a part of this process with a second price compression focused on those areas you want to try and get better pricing on if it makes sense.  

This approach gives all vendors the information they need to handle the project and the potential to have one company run everything.  You would have all of the information you need to decide on a potential short list of vendors you could interview and you will have the details necessary to compress items/services that will provide the best savings.  A side benefit will be that you generally get a lot more value add services with this approach.  The downside to this approach is that it generally excludes vendors who could not handle all three aspects of the refresh which can sometimes reduce the level of competitive responses.

For more information about how you can begin to take a look at upcoming computer refreshes, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

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Today’s post is by Mark Davis; Sr. Vice President of Operations and CTO at SafeSourcing

We have reviewed Vendor Introduced Needs that create new sourcing projects in a company and the steps you can take to begin getting the data and information the business needs to make the right sourcing decisions.  We finish the series today by reviewing Market Introduced Needs.

Market Introduced Need – Many times the  local or global market or both introduce needs before you even have a chance to decide that a need even sexists.  Fuel price increases, rising paper and postage expense, Federal laws, regulations, trade laws, import and export evolution and other items are all happen or are happening in  markets around the world  that create needs where none existed before.

Obviously the effect that rising  fuel prices have on almost every aspect of sourcing have been widely written about by many authors and bloggers but what about the increases in paper and postage that are happening that demand companies to move toward digital statements, communications, invoices, etc.?  What about new regulations that require additional testing of your fleet emissions, your refrigeration/air conditioning units, or your disposal of waste?  These create sourcing projects which are generally high profile and high urgency and include data that your sourcing professionals have little or no experience with.

For many of these market introduced needs  project begin with a thorough understanding of why the changes have occurred in the first place and what they truly mean in relation as to how you conduct business.  Many times companies jump to get a new service based on evolving laws and regulations that don’t even apply to their business model.  A 3rd party eProcurement partner should be able to help you evaluate your specific needs.

Once your need  are determined it will be important to find  a sourcing provider that can deliver the best value for your business including  a best case strategy with various implementation scenarios over time that ultimately get you to best practices at the best cost and value.  While price is examined, many times the fit a vendor has with your organization will be equally important because as mentioned above these projects tend to be high profile and having the cheapest company perform the product or service in an inadequate manner can cost the company millions down the road.  Your eProcurement partner should be able to provide analysis in this area as well.

For more information about how you can begin to take a look at your companies new projects more effectively, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

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Today’s post is by Mark Davis; Sr. Vice President of Operations and CTO at SafeSourcing

Yesterday we looked at Vendor Introduced Needs that create new sourcing projects in a company and the steps you can take to begin getting the data and information the business needs to make the right sourcing decisions.  We continue that today with Business Introduced Needs.

Business Introduced Need – There are so many changes, both positive and negative, that happen within companies that continually change needs on almost a daily basis.  Companies grow and acquire other companies, they downsize, they expand into other geographies which cross different time zones, and they get new management while other management departs.  These opportunities lead to changes that require new goods or services that have never before been needed, or that the company could not afford previously.

There are a few things that can happen here as first steps depending on how long the product/service has been known about and researched.  In some cases this means a business case has already been established, details about the business have been collected and the only thing left is to determine the vendors who should be invited to submit a Request for Proposal as to how they plan to supply you with what you need.  Frequently a recommended step in this process that is either included in the RFP process or as a separate step after a simpler Request for Information, is to have vendors perform an assessment of your business and provide what they would recommend in order to address your needs. 

You can accomplish this by issuing each vendor a sample scenario to assess, give each a real world scenario to assess or have them all assess the same scenario, or you can accomplish the same result by simply providing the vendors background on where you are coming from and where you want to head (i.e. Improving File Transfer Success rates by 50%).

For more information about how you can begin to take a look at your companies new projects, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

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Today’s post is by Mark Davis; Sr. Vice President of Operations and CTO at SafeSourcing

Over the next 3 days, we will be looking at some of the reasons new projects get introduced to a company and the steps you can take to begin gathering data and other information the business requires to make the correct sourcing decisions.

A Vendor Introduced Perceived Need –  Because the  Information Technology Industry changes so fast there are many  cases when a vendor will get an audience with a company for a product the company never even knew existed to fix an issue or a  vendor perceived problem that the customer in some cases  doesn’t even know they have.  Good vendors will leave that meeting having convinced the customer that they do have a need. Almost always, this means there is also no budget planned for this need, let alone the fact that you are already resource constrained. 

As such these situations can become a two goal project. The first goal being to try and understand the market as well as other companies that can also offer the specific product tor service. The additional requirement is to at the same time build a business case that can be presented to leadership in order to stage potential funding in order to pay for non budgeted offerings.  A nice way to get started is to begin with a strong RFI; these can be fashioned in such a way that the vendors can help you to create your business case.  Collecting information relative to the vendor, product, service, an ROI and the vendor’s rationale for choosing them will provide you with everything required to take your case to the next level for approval.

For more information about how you can begin to take a look at your companies new projects, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

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Today’s post is by Mark Davis; Sr. Vice President of Operations and CTO at SafeSourcing. 

There are so many new sourcing projects that get introduced every day within companies around the world.  For one reason or another, businesses begin to look at purchasing new products and or services that they have never purchased before and nowhere is this more common than in  IT Departments.  Technology changes so fast these days that entire market segments or even industries (i.e. Social Media Planning) have not only been born ,but they are becoming formidable categories in their own right for spend. And there are not many that have the experience to source for their needs

Over the next 3 days, we will look at some of the reasons projects get introduced and the steps you can take to begin collecting data and information the business needs to make correct sourcing decisions.

For more information about how you can begin  should be looking at your companies new projects, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments

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