Helping You to Help Us

Lasat week I had occasion to sit down with leadership of The Company’s Information Technology group.

My team of Procurement Heroes have done a lot of work for this key team, and for some of the IT guys, it was the first time they had worked with the procurement organization directly.

It was a bumpy ride to get them into and through the process, layered with complexity because of a recent procurement directive to use eAuctions wherever possible.

Post-procurement, the IT leadership wanted to do a post-mortem on how we did on their four small, but important, procurements.

To sum it up, the procurement team made some mistakes. The client team made some mistakes. And a couple of the suppliers who bid on the work made some whoppingly big mistakes.

At the end, I was pleased that despite the kerfuffle, all of the ordered items had either arrived or time or early.

The IT leadership vowed to continue to work more closely with the procurement organization (win!) but asked for some help in better understanding their roles and what they need to do to make a procurement go smoothly.

I readily agreed to help them out.

So imagine my pleasant surprise today when I stumbled across Stephen Ashcroft‘d blog post over at Supply Management.

Finding his toolkit for helping our non-procurement colleagues to navigate the murky waters of procurement could not be more timely.

Below is Stephen’s ten question list to help guide end users, and I’ve offered some comments of my own.

Enjoy!

1. Do you know what you are buying?
   

   
   Hey, good question. In the conversation that I just had with IT, they admitted they like doing small sole sourced POs to known suppliers, then, in their words, “figuring out what they need and doing an amendment if it costs more.”

   I almost passed out, then I said, “You realize that is the most expensive way to do business, right?”

   They promised to do a better job of knowing what they need before we go throwing money around. And to quit it with the sole sources.
   

   
   

2. Are the responsibilities clear (who, what, why and when)?


Yes, again, don’t let the supplier define. But be clear on who does what. If anything feels vague, ask us, we can help.





3. Has the supplier explained how the deliverables are going to be achieved? Did you ask for a method statement or plan?


Do you know what it is you want and do you know how you will know when you got it? Big questions. It frightens me a bit when my end users can’t answer that question and wonder why I’m asking. “We’ll know it when the supplier tells us they have delivered it” give me the shudders.





4. What does the supplier need from you? Dependency on the buyer can be a useful excuse for failure for some suppliers.


Ask questions. Lots of them!





5. Are deliverables linked to acceptance prior to payment? You need to define and jointly agree what is acceptance (agreed before the contract award).


Yeah, there’s that ol’ “we’ll know we got what we wanted when the supplier tells us so” again. Acceptance is a pretty prickly word with most suppliers, they don’t want it as adding acceptance to the contract affects their revenue recognition. (Thanks to Sarbanes-Oxley)

In many cases, commercial off the shelf for example, acceptance isn’t necessary. But anything custom, modified, different, weird, funky, strange or unusual should have acceptance in the terms of the deal.

And Mr/Ms End User, be ready for the supplier to cry on your shoulder about how mean Procurement is for making you add that to the deal.

I reminded my end users just this week, “Let me be the bad guy. I like it.” They breathed a sigh of relief when I said it. Procurement is used to being the bad cop and we *should* be the one to take the heat and lay down the law.

This allows the end users to continue to foster the day to day relationship.





6. What happens if things go wrong?


With the addendum: “Something will ALWAYS go wrong.”

This question is for both supplier and end user. To the supplier, what is your backup plan? To the end user, what happens if this doesn’t happen according to your project plan?

These are hard questions and will make everyone uncomfortable. That’s a very good sign.





7. Are responsibilities to report progress clearly stated (so there are no surprises)?


With the addendum: “And there will always be surprises. See #6 above.”

This is another area where the supplier might bristle a little. It will take them work and time to do reports. So they should do them with regularity.

If your end users says, “Nah, we don’t need reports,” then I say question it. I often question by way of example. “Ok, so you say you don’t need regular reports. I was thinking things like how many transactions a month through the SaaS module, how many mbps of data flowed through, downtime and number of trouble tickets.”

This then causes the client to go “oh…I hadn’t thought about it like that.”

Questions! A buyer’s best friend.





8. How is the supplier’s performance monitored? Is everything on track to ensure delivery? How do you know?


Yep. Good questions. Don’t let the supplier define it or leave it vague.





9. What will success look like? Are the criteria, such as timing, quality and cost, clear in the contract or statement of work?


This is another one that may make the client team go all fidgety. If they have been working way too closely with a particular supplier, they may have never thought about this or how to define success.

Yet this is THE critical element for crafting and managing any contract.





10. If it is not clear to you, how can it be clear to the supplier?


Sadly, I have to ask this even of my buyers who are trained Procurement Heroes. I know it can be brutally hard to write a good SOW, but once you put something vague out there, the supplier is going to price up your nebulous requirements.

And price them up a lot.

Everybody should understand what we are buying and when and how we’ll know it was done right BEFORE any documents hit the streets. This is just good clean procurement.

Here’s hoping you and your team of procurement professionals can find use for this list in your organization as well. For my specific company I would add a few things like “Do you have budget available for this procurement? If so, how much? Did you take into account the cost of shipping, schedule creep, scope creep, etc?” along with “Do you have approval from your leadership to make this procurement? If so, who?”

But Mr. Ashcroft’s list is a real fine place to start. It’s specific enough and generic enough to be used across all commodities.

May we all have success with training our clients with making better procurements, which leads to saving more money, which everybody has as a KPI, right?

Image found here.