How to handle procurement
As your consulting firm grows, the size of your client organisations may grow too, meaning winning work is more likely to involve a procurement department.
For some consultancies, this can make the sales process more difficult to navigate, because the procurement team has alternative objectives and processes to the key stakeholder you have been speaking to so far. So we invited Alan Gotto, Chairman of the Consultancy Procurement Council, and owner of Constellia, to open our members’ eyes to the perspectives of the procurement professionals they are dealing with and offer ideas for how they might influence and engage with them during the procurement process.
Should you build a relationship with procurement at all?
After explaining the environment in which procurement processionals work, Alan shared several misconceptions about the role of procurement, including:
- Misconception 1: Procurement only buys stuff. Reality: They come up with better supply solutions for stakeholders internally who are buying things.
- Misconception 2: Procurement is cost focused. Reality: Procurement is best value focused – “What you give us, less what we have to give you compared to your competition.”
- Misconception 3: Procurement only buys toilet rolls. Reality: They don’t buy toilet rolls. They analyse how they can buy your services more effectively.
Every year Alan surveys the membership of the Consulting Procurement Council (large strategic procurement teams of the UK’s big brands) and he asks them what percentage of consultancy buys they are involved in. While there are some organisations where procurement are in the room 90% of time, the bulk of them think they’re involved less than 50% of the time.
So, Alan’s view is to understand whether they have a high level of influence and if you can work without engaging with them, then keep doing so. “But don’t make an enemy of them,” he said. “If they come to you asking for a savings opportunity, have that in your back pocket for them to work on.” He went on to explain that procurement is a channel for legitimising your relationship with the business. “Take them something better than that which they already have, that they can take the credit for,” he said.
Can you kill the tender?
Our members were particularly interested in Alan’s idea of consulting firms creating a sales objective that kills the procurement team’s tender.
Here is Alan speaking as a procurement professional who is looking for ways to offer alternative solutions to what you have to offer, and sharing ways for consulting firms to stop that competitive tender process. These include how to build relationships to influence the decision that a tender is not necessary.
How to manage the procurement process
Alan shared lots of recommendations for managing the procurement process itself to give you the best chance of success. These included the importance of continuously building relationships and how to de-risk the buy (consultancy projects can go wrong, so share your track record).
It was eye opening to hear Alan explain how the timing of when you submit your proposal to procurement influences their perception of you and your business, and the positive impact of finding out what the client doesn’t like about your proposal and fixing it before your presentation.
Top tips for rate negotiations
Finally, we were lucky to hear Alan’s top tips for negotiating your rates, which began with the recognition that “by the time rates are on the table, the negotiation has already started – there is no magic negotiation room.”
Particularly valuable was Alan’s take on the right questions to ask procurement during any rate negotiation:
If you own or lead a consulting business turning over up to £/$20m and you would like to join us for our next event, try us out by registering for any of our upcoming events. If you would like to join us and scale up your business, become a member or contact George to find out more. We’d love to welcome you to our community.
Article | Sales and marketing
Ali El Moghraby
Head of Marketing
The Consultancy Growth Network