This week on The Buyer’s Seat, I interviewed Amy Haney, a former procurement executive with 25 years of experience in primarily healthcare, real estate, and IT.
Procurement is notorious for being fixated on cost and asking those uncomfortable questions that everyone’s been avoiding. But truthfully, involving procurement is helpful for the sales side of the house to better understand not only procurement but how procurement works internally within that organization to ultimately enable a deal to come together.
Amy Haney provides some insightful context into the role of procurement when the team’s involvement is best implemented in a given timeline, and methods on how to bridge the existing disconnect between procurement and its partnering teams.
Here are the four key takeaways from the conversation:
1. We on the sales side should make sure that we’re working with a clear view of what the situation is versus the old stereotypes about procurement. There’s a different mandate for procurement officers today and a different skillset. You might find your interactions with them might be very different than what you’ve built up in your mind—and we should be conscious of that.
2. We need to think about a much broader set of KPIs. It isn’ going to be about cost alone. And particularly in today’s environment, it’s going to be about the way that we construct the deal. It could be Ts &Cs like payment terms, risk mitigation, data efficiencies, all kind of things that are going to be KPIs for the procurement person. And we think about our solution. It’s not just the features of the product that we’re selling, but it’s also the deal construction that we need to think about when we sell to that procurement stakeholder.
3. We need to make sure that procurement is very front center in that conversation because they’re going to open the door for us, not just to procurement, but also a whole bunch of other stakeholders that are on the business side, such as legal or risk management.
4. Build a relationship with procurement along the way so that they’re working with us and helping us shape that solution, helping us navigate the organization and just be ready for the fact that we’re going to have to answer some uncomfortable questions about our deals, and we need to be willing to get those handled upfront.
Panel Discussion Highlights
So from my perspective, I’ve spent 25-ish years on the sales side and I’ll tell you procurement, the word just makes me shutter. So change my mind. What do you think is the biggest misconception that people like me have about procurement?
There’s this perception that procurement only cares about costs. We don’t get it. We don’t understand. We only care about costs and in today’s environment with the complexities that exist in a deal, in the technology space, there’s a skillset change that companies are making with procurement professionals. And I think sometimes there’s that disconnect on the sales side where they’re not realizing, or maybe believing that there’s been a change in that, and so, therefore, there’s the rub.
So commonly today, the skillset of a procurement person is no longer simply signing a contract that may be one-sided to the supplier and issuing the PO if you will, rather, it’s more so around the role the procurement professional commonly. And I’ll say in my experience, we want and need to be involved early, early, early, because what we can do for the internal client, as well as the supplier that’s trying to close the deal, we can help to navigate.
And when I say navigate, I mean, things like… A deal today is much more complex than it used to be in the past for reasons of privacy, insecurity, risk management, etc. And so the role that procurement plays more so today is to touch base with legal, with risk management, with privacy and security and all those other disciplines across the large organization that must be involved in the deal. So that is a big pinch point as some folks on the sales side don’t always realize the complexity of an organization.
I know one of the things that I’ve experienced in the past from procurement is, they like to keep a level playing field. So if I’m trying to run a pilot, they want to offer that opportunity to my competitors. Ae those no longer things that people like me should worry about?
So depending on the size and scope of the deal that you may be trying to sell in, there may be policies and procedures within that organization that require the project to be in essence bid out.
And the leg up that you might have is that you are building a relationship with me on the procurement side. And again, remembering that, and I do think salespeople maybe forget this too. We as procurement professionals, we are actually also selling and advocating internally. We have to do our own sales job internally to gain the buy-in to legal council, risk management and all the other disciplines they’re required to actually drive the deal home.
So I’ll say again, from my own experience, I have resonated towards those suppliers who have taken the time on the sales side to come to me early, ask me what my goals are, ask me to share. And I think you’ll find that if there’s a willingness to spend a little extra time to understand goals and objectives, you might be surprised how that salesperson doesn’t have to be the one to do all the navigating, but actually we can partner with you.
Yes, we ask the uncomfortable questions and while costs will always be a factor, it doesn’t have to be the main factor.
What additional advice do you have for navigating those relationships early on?
So I would say in summary, my advice would be for the sales folks, profile your client. This is critical. Profile the organization, and understand from the very beginning who does what, and if you don’t know, or you can’t get the same answer, which is also going to be common because the answer may vary depending on who you’re talking to. My advice would be to go to a good competent procurement professional who can show you the ropes, because even if you think about it, yes, we ultimately negotiate the terms and conditions of the contract and ensure that it gets signed, or we signed it ourselves.
Remember we work with each of those disciplines that have to also see that deal and approve it through their lens. So we know these people and we’ve worked with them all day, every day.
As a salesperson, one of the things that always is a challenge because answering RFPs can be a huge time commitment. So as a seller, is there a real chance there? I mean, how do I know if I’m a seller that there’s a real opportunity or, Hey, we just need a certain number of bids to help with negotiations. How should I be running my brain on that?
Here would be my advice, and it’s probably scary for salespeople because they fear procurement or some do. And I would challenge this, I would say to the salesperson, if that’s what they’re thinking, have that conversation with procurement and express your concern to procurement about just that. And you might be surprised. A good procurement person, they’re going to be willing to have that conversation with you around, “Okay, this is what we’re doing.” Well, even then through that dialogue, you’re actually building a relationship with procurement.
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