Daily Archives: April 25, 2013

How Do You Increase Internal Demand for Supply Management?

Supply Management needs to be reinvented as the “go-to” organization because, when you get down to it, it does support every department, engage every service provider, and, in a leading organization, influence every four out of five dollars that leave the organization. It is, after all, the secret agent of business improvement and the key to increasing organizational value.

However, in the average organization, with the exception of the CEO and CFO constantly screaming at it to “cut costs“, there is little internal demand for its services. And the sacred cows of Legal, Marketing, and HR don’t want to touch it with a 10-foot cattle prod. And it’s a damn shame.

So what’s an average organization to do when Supply Management is the proverbial black sheep of the organization?

It’s a tough question, especially when the usual tricks of learning the language of the client organization, presenting wins obtained by other organizations in similar circumstances that could be transferred, and explaining how, at least initially, you’re just there to support them and how the technology and process you can bring to the table can make their lives easier don’t work.

But there may be an answer, and that answer might be to approach the problem the same way you would when you’re trying to start a two-sided marketplace. A recent article over on VentureBeat about launching a two-sided marketplace had a very interesting quote from Oisin Hanrahan that provides the insight you just might need to succeed:

One element of launching a successful two-sided marketplace that is often overlooked is the initial spark, or the little drop of supply and tiny inkling of demand you need to kick your whole idea off into a successful market. There is an over-reliance on using technology to secure these wonderful drips of interest that will eventually turn into the transactions responsible for driving your business.

In other words, while the real value you bring to the table is better processes enabled by technology, this isn’t what’s going to get the interest of someone who thinks they know how to procure their goods and services better than you. The only thing that’s going to get their interest is if you come with an answer to what they see as their problem, and only what they see as their problem.

If Legal’s problem is that they can’t understand the differences between discovery offerings from different parties, you come to them and explain you can help them construct feature/function RFPs that will let them compare apples to apples and analyze them automagically. If Marketing doesn’t understand how to analyze hard costs vs. creative costs in proposals, you explain how you can help them do that, and even separate out hard print costs and let them aggregate print orders to save money for creative services. If HR doesn’t understand how to find new consulting service providers and how to compare their bids and offerings you tell them you can help them find new potential providers and gather information in a standardized fashion. Not once do you come forth with claims of better processes or technology or claims of great cost savings, which they will automatically assume will mean cheaper providers and lower quality work. You find out what their problems are, and offer to help do only what they want help with. Every time you help them, value will be increased and they will slowly trust Supply Management with more and more responsibility as time goes on. And, at some point, Supply Management will become the go-to organization. But only if it starts by finding the spark that will set of the conversation.