Many of us in Procurement will be tasked this year to "Go out to Market" or "Benchmark the Current Supplier(s)" or even "Find better Supplier(s)". That is all good and well, but what, will you use to "go out to market with?" or use as your "Benchmark" or what does "better" look like? For most procurement people the answer is to look at the spend data gathered by the organisation in its spend systems, for others it will be to ask the Accounts Payable Department to tell them what the company spend with which suppliers and for others still it is asking their (known) suppliers what they spend with them. I have been in all of these situations and there is nothing more frustrating than asking people (APD) who are supposed to know what we spend and with whom and they do not have the first clue. However, the better situation is to look at the spend systems. Most spend systems I have come across in large and small organisations have little information, incorrect information. For example it will say that we purchase telecoms from a company who is in the IT space. You will agree, these are two different spend areas, so how can our data collection tool get it so wrong and what is the real spend?
Sadly, a lot of Procurement people do not know what a good data set is and they are pushed into the market to "get the RFP/RFQ out". Two things will happen 1) the suppliers you will send your RFP/RFQ to may say - What are we supposed to do with this incomplete information - the specifications are wrong or misleading and I don't know how I can price these specifications or 2) If this company can't get their data right, we will spend a lot of time and money to decipher this and may still not win the contract. If they can't get the data right, we don't want to win this as this is not a company that we want to work with. In position 2 you are guaranteed to get bad press with suppliers and others in the industry (remember suppliers speak to each other). Or if they do tender then they will use your ignorance to charge you more for the goods and services or come in with a low bid and increase later as their will be a caveat in their pricing that will say "if there is further information discovered during the Due Diligence or when doing the job, prices will increase".
Additionally, you will spend a lot of time running between your users and the suppliers with questions and in the end you will end up having very dissatisfied stakeholders. Remember most stakeholders from suppliers to budget holders do not want to have Procurement involved in their business, so you "messing up" will only re-enforce their dislike of Procurement. So before launching into the market to benchmark current suppliers, cost or find new suppliers - ask yourself, do I understand the data (spend and specifications) or do I need more information from my internal stakeholders? If you go to market with correct data and knowledge then you will win both the trust and cooperation of your stakeholders and the market place.
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