How Do Buyers Know They Obtained Value for Money?
We purchase goods and services to solve problems. The right solution is the one that solves the problem most completely. With complicated problems or ones that have complex implications for other systems, this can be very difficult to ascertain. Often a good or service may appear to be the right solution, only for this calculus to turn out to be incorrect because of a failure to acknowledge the full extent (or even the existence of) complex interactions with other aspects of the firm.
Suppliers Are Customers and Buyers Are Vendors
Buyers are prone to a naïve conception of suppliers as vassals, bonded and dependent on them for life-sustaining business.
How Should Boards Think About Procurement?
In a pre-Pandemic world, if I were to have asked a procurement officer or a chief financial officer, “what do you hope to accomplish with procurement?” the answer would have been straightforward: cost savings. In a post-Pandemic world with an elevated and persistent interest in social justice, the response is likely to be fundamentally different.
How Should Buyers Engage with Small Suppliers?
To win contracts with large government buyers and private sector purchasers, big suppliers need to demonstrate how they engage with smaller suppliers as subcontractors. Initially, this ability will be a competitive advantage, but over time it will devolve into necessary table stakes. BDC defines small and medium-sized enterprises (“SMEs”) as those with fewer than one […]
Spend Analysis vs. Spend Risk Management
Procurement departments should focus on value and risk, but instead they prioritize cost. Value-for-money means buying the right solution from the right supplier at the right price.
The Best Way to Purchase Contingent Workforce Services
Contingent workforce services, also known as extended workforce, refers to the use of third-party labor to supplement the firm’s base of employees. Typically, hiring managers will obtain these services from one of several channels: staffing companies who supply labor on a time-and-materials basis; large IT services firms who offer consultants based upon a Statement of […]
What Can Big Business Do to Help Smaller Firms?
Small and medium-sized businesses are critical players in corporate supply chains. Sometimes their participation is opaque in that they exist as undisclosed sub-contractors. The policy response to the current crisis has been to treat it as a liquidity crisis. Specifically, the shock of the Covid lockdown and its disruption to business was seen as a […]
When Should You Use an RFP?
The proliferation of eSourcing or eProcurement systems in the last twenty years has transformed the way large organizations purchase goods and services. We were told digitization would lead to cost savings, faster cycles, better outcomes in terms of value-for-money, and the like.
Buyers Should Collaborate on Sourcing with Competitors
When we speak with procurement departments, I am always struck by the need for secrecy. They have non-disclosure agreements in place with their suppliers that prevent their suppliers from revealing anything about the relationship (including its existence).
Is Sourcing More than Cost Minimization?
In 2008, leveraged financial positions collapsed in value. Investors assumed incorrectly that American housing prices were unsinkable. Margin calls and firm failures cascaded as hidden risks emerged. Similarly, today, a black swan contagion plagues supply chains spanning multiple sectors, globally. The unexpected coronavirus revealed interconnected exposures that companies underwrote to operate lean.