Procurement: the new sheriff in town.

AuthorKravitz, Howard

Your client is under tremendous pressure to cut costs. They've done the easy things, such as staff reductions and spending cutbacks. They've done some hard things, too, such as moving to shared services, outsourcing critical functions and undertaking "business transformation" initiatives. You feel reasonably safe because your client relationships are strong, your services are vital and the competition simply doesn't understand the depth of the company issues the way you do. Your revenue steam seems protected. Unfortunately, you may never be in more danger.

There's a new sheriff in town, and while he's not quite riding a pale horse, be assured your invoices represent a critical target for him. The new trend in procurement is to go after professional services. Spend without competition is the enemy of any good procurement officer. Their goals include a variety of sourcing strategies to help obtain discounts, reduce or increase the number of suppliers, and force a competitive bidding event. While the business executives may be the ultimate decision makers, procurement can significantly influence or direct the buying process and outcome.

So, how is your relationship with procurement? Perhaps you're like many who feel that developing a relationship with procurement just isn't relevant for the services you provide. After all, these are the people who source pens, paper clips and computers, right? What can they possibly know about choosing professional services? One of your greatest strengths as a rainmaker is to sole source your revenue streams based on long-standing client relationships and client needs. Procurement is to be avoided at all costs. The RFP process cheapens the deliverable and drives down your margins.

Nothing may be further from the truth. In the professional services arena, procurement is playing an increasingly important role in the buying process for professional services, and legal fees are most certainly on their target list. Audit, tax and consulting services are all being put out to bid, with the process generally managed by the procurement professionals. It's in their best interest to show their value to their internal stakeholders by helping them compare apples to apples, ensuring they are getting what they pay for, simplifying the contracting experience and driving down costs. So what's the right play for you with procurement? Most of us don't like the idea of being in a reactive mode, finding ourselves suddenly mired in...

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