Is your organization stuck in the same ways of trying source services and products?
Today’s post is from our SafeSourcing archives.
Several years ago lawmakers introduced a bill (HR 5255) the purpose of which is to reorganize how the federal government purchases IT product and services. In the face of the highly questionable success of the newly launched federally operated health insurance exchange website, many believe that the government is stuck in a pattern of buying technology that is not current, solutions that are not the right fit, and running projects that take years to implement once they have begun. While this bill focuses on federal government and IT categories the reason for its need could easily be applied to other companies and categories.
Complex procurement processes – One of the main reasons this bill was introduced was the complexity of the procurement process adopted by the federal government. Its voluminous RFPs and RFQs are so difficult and confusing to complete that only very large companies with staffs proficient in submitting federal RFP responses are competing for the business. This leavesmany quality, capable suppliers out of the mix. What is usually left to choose from is not necessarily the “best of the best” it is more like the “whose left that has the resources to respond?” Like the federal government, the question companies should being asking themselves is “How easy are we to do business with?”
Rigid guidelines – Along the same lines of complexity is the problem of being too rigid in the procurement guidelines that have been developed. Even companies with streamlined procurement processes can run into challenges if they are not willing to slightly adjust those processes from project to project as the need fits. An example of this would be a company that has a strict rule not to take spends less than $100k through their normal procurement processes. They become so entrenched in the letter of the rule that they fail to go further. They never explore that $80k spend that could begrouped with either another category serviced by the same suppliers or grouped with another company to get a larger spend as an impromptu GPO.
Build Champions – HR 5255 would have a narrower focus of a roll-out starting with only 5 government agencies participating. This approach is similar to one that any company should follow when making changes to how they procure goods and services. Start with departments that need procurement help the most and that are open to having the procurement department and/or 3rd party sourcing partner assist them. Focus on some projects that can build momentum in the way saving time, money or resources with the outcome. Once the initial departments are running and satisfied with the process it will be much easier to take that process to the rest of the departments in the organization.
SafeSourcing helps our customers every day develop new sourcing strategies and examine the processes that have grown “long in the tooth.” For more information on how we can help your team or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative. We have an entire customer services team waiting to assist you today.
We look forward to your comments.