Flip Side Whitepaper Notes: When Sales and Procurement Collide (Part 1)
I recently discovered a white paper that speaks to the exact premise of “The Flip Side” here at Buyers Meeting Point – that sales and procurement have a lot to learn from each other: ‘When Sales and Procurement Collide’.
Greybeard Advisors LLC managed the white paper and the survey on which it was based. They received support from Supply & Demand Chain Executive on the procurement side and Sales and Marketing Management on the Sales Side. The premise of the survey was that at least some of the divide between sales and procurement stems from their perceptions of each other, and how they think they are perceived in return. Here is a quote from the executive summary:
Both Procurement and Sales recognize the value of being strategic in the practice of their respective professions; however, given the opportunity to “peek around the curtain” the interest that seems to be at the forefront is to learn more about the “secret ways” of both professions. No matter how many times Sales or Procurement professionals are told that there are no “silver bullets” they tend not to accept the answer.
I highly recommend that you read this white paper, and you can click here to download it. There are so many interesting insights and comparisons in it that I can assure you we will be discussing it as the basis of our Tuesday “Flip Side” posts for a few weeks to come. Of particular interest are the differentiation of Knowledge and Understanding in the survey as well as the section on the Methods (which you can think of as Tactics) used by both sides. I’m struggling not to jump straight in and start discussing the survey findings, but I believe there is a lot for us to get from this paper, if we take our time.
I would like to start off by sharing some feedback submitted by the sales participants in the survey about the most successful procurement processes they have encountered.
Question: Describe or list the characteristics of the most effective sourcing / procurement process that you ‐ as a sales professional ‐ have ever encountered.
[Greybeard Advisors’ Note] Many Sales respondents provided an answer to this question. The following are a selection (without edit):
- Goals stated up‐front "reduce the total cost of ownership by 20%"; Collaborative approach to understanding feature/benefit tradeoffs with price; Engineering/manufacturing involved as well as procurement
- Empowered and informed, understands the Total Cost of Acquisition and looks beyond the price. Uses collaborations to achieve strategic ambitions. Invests in relationships
- The most effective relationships we have with customer procurement personnel is in organizations that are not procurement driven. Procurement is an important function in the organization, but sales, marketing, operations, etc. is heavily involved in technology and supplier selection.
- Using a collaborative approach to include new ideas and/or processes; Willingness to entertain solutions outside of the specific parameters of an RFP; Applying cost‐of‐ownership principles vs. pure lowest initial cost
- Involvement was from the ground floor to the top floor with everyone’s opinion carrying the same weight.
- The most effective sourcing process I was involved with did not involve the procurement group until the details and scope were defined and Rough Order of Magnitude quotes were delivered. We sell custom developed solutions that can't be ported into a standard procurement process.
- 1. They listened to our overall solution and realized the benefit in what was being presented. 2. Didn't treat our product as a commodity. 3. Shopped our total solution with like for like services 4. Made a decision on value and solution not just on price.