That Buffett kid could have a future in Procurement

From an article titled “How Warren Buffett Got Rich” in the Pittsburgh Post-Gazette.

(Link discovered via Supply Chain Management Review)

Based on a review of Buffett’s book, the author discusses some of the top traits that Buffett embodies and are, according to the author, attributable to his success.

Stay with me Procurement Heroes…and you might see something familiar.

First: Intuition. Or what the author calls “informed intuition”. The ability to sniff out if a deal is viable. Go with your gut, is the old saying. You *know* because you’ve been doing this for a while, whether something smells right or not. I’ve only rarely had to go to my clients and advise them not to do a deal. But in every case, I was right. I knew it. In my gut. Based on some intangible factors…but then…

Next: Intuition MUST be backed by careful research and analysis. You can feel it in your gut but you aren’t going to convince anyone without something tangible to back your play. From the article: “That’s work, even drudgery; it requires plowing through irrelevancies to get to what is relevant.” Essential.

And finally: You used that gut for instinct, now use that gut again to step up and get the deal done. At some point, you gotta screw up your courage and deliver. Even when the going gets rough. Seas stormy. And other metaphors for difficult times. Getting a deal completed requires a certain amount of courage and tenacity. The measure of each depends on a lot of variable.

Hey, this is not to say that all of us in the Procurment profession have the business acumen of Warren Buffett, but we can either learn from this, or take comfort in knowing we employ many of the same business techniques.

In the end, it’s all about getting the deal done…and done right.

Ruh Rho!

Injunction Blocks Microsoft From Selling Word

Hmm. I’m sure it will get settled out of court soon…but in the meantime…DOH!

You know…(ponder, ponder)

“Fasthosts Internet Ltd, a leading web hosting provider (in the UK), has released a study showing that 53 per cent of US business owners seek more involvement in the purchasing of their IT services, such as hosting, than ever before.”

You know who could help with that?

An experienced IT Procurement Professional.

It’s ok to let someone who has done this before step in and help you out.

Winning over executive management, one person at a time.

Source

Mssrs. Sarbanes and Oxley would be *so* disappointed!

“A former Kraft Foods purchasing manager was sentenced to two years and three months in prison today for taking $158,000 in bribes from a broker for a Central California tomato processor…”

This is always disappointing to me when I read of a purchasing person going to the dark side.

It’s never okay to take kickbacks. Especially the kind that come in cash. Ever!

It seems like the guy offering the bribes has been busy. He’s awaiting sentencing also with a procurement person from Frito Lay (and others!).

You know, when they force you to take all that SOX training, and they tell you “you could go to jail!!” and you roll your eyes…well, remember this story, eh?

You’d think Kraft and Frito Lay would be above such stuff, but it goes to show that every manager in a procurement department must stay diligent. Always.

Source

Making the Best of Bad News

Did you know that it is possible to put a bright smile on a $4 billion (with a capital B) loss?

It is!

“The forced merger of Lloyds Banking Group and HBOS has been making headlines this week for the spectacular £4bn loss that was announced earlier this week. But, if it wasn’t for procurement, those losses would have been even worse.”

(emphasis mine)

Music to my weary Procurement Hero ears. If it wasn’t for the hard work of their procurement team, that four billion (with a capital B!) would have been much, much worse.

Nice!

And the procurement folks got credit too:

“‘Procurement is playing a key role in assisting the Group to achieve its integration synergy targets,’ the banking group’s interim results statement said.”

Congratulations to the good folks working hard to find synergies in a tough economic time!

Source

Two Can Play at That Game

Oh Oracle, how you keep procurement professionals on their toes!

“Ray Wang, an analyst with Forrester Research, found that Oracle had bumped up prices for three products…”

“Oracle’s targeted price increases may have everything to do with the needs of procurement managers…”

“‘Oracle is responding to what procurement managers are saying about how their bonuses are based on how much of a discount they receive,’ Wang said.”

Ah yes, this the same company that changed their licensing model from seats to some wonky calculated backend user model that said, basically, if you have a database as the backend of your online store, then EVERY potential user that might hit the store had to be licensed.

In essence, you had to license the entire user base of the internet.

Uh. No. I believe they were taken to task on that one.

This is a little more insidious. I mean…it smacks of collusion, doesn’t it?

I’ll help you make your goals if you help me make mine?

Gack. And yet, Oracle is the 800-pound gorilla in the living room. There’s not a thing you can do. They keep gobbling up more companies that you *do* like (Agile, PeopleSoft) and making them into their model. *sigh*

Stay on your toes, Procurement folks. Don’t take a discount at face value! If Oracle says they can break the bank and give you fifteen percent, ask for fifty! Push back! They will jump up and down and threaten to walk away. Let them jump, but hang strong.

I say this from experience. After years of tumult and torture, I was part of making an really excellent deal with that big mean company in Redwood City.

It *is* possible to do a good deal with Oracle. They are used to making procurement people break, so we all just have to be a little bit stronger. Just remember to do your homework and steady the course!

Source