Sales Vs. Procurement: Who Wins Control Over Your Next Sourcing Initiative?

Today’s guest post is from Brian Seipel, an information technology and marketing Project Analyst at Source One Management Services.

A while back, I had a chance to discuss why best-in-class suppliers may be, shall we say, less than enthused about the RFP you just released. I’d like to take a moment to move away from such 3-foot concerns of RFP development and address the 30,000 foot concern: Sales’ impression of Procurement’s involvement in the overarching decision-making process. It isn’t a secret that both sides are wary of each other. The name of the game is often winning out over the other side for control of the sourcing initiative.

Procurement’s value to an organization hinges on the ability to get the right solution in place at the right price point as quickly as possible. Sales can help us do this, or throw up barriers that make this goal harder to reach. I propose Procurement pros extend the olive branch and work towards bringing Sales into the equation as partners. There’s too much to gain not to — Sales teams that recognize their place as allies rather than adversaries can deliver better targeted solutions more quickly, and be willing to negotiate more readily.

Good News and Bad News

Most Procurement/Sales relationships can be described as a tenuous, “OK-but-not-great” alliance borne of necessity. The groundwork for forming true partnerships is there, but often not capitalized on. In other words, I have some good news and bad news for you.

Good news! Both sides are in an excellent position to understand end user needs, and know how the market can address them.
Bad news… Sales is often skeptical of Procurement’s willingness to share crucial insider information about needs or plans future development — let alone allow Sales to interface with end users.

Good news! When Procurement engages in open dialogue, Sales can be leveraged as a business partner, suggesting otherwise unconsidered solutions that can benefit an organization greatly.
Bad news… However, Sales rarely looks to connect with procurement in the first place, opting instead to look elsewhere in an organization for points of contact, killing such dialogue before it begins.

Good news! Both sides have the ability recognize Total-Cost-of-Ownership and Total-Value as critical long-term.
Bad news… However, as the consequences of the problems manifest, the sourcing process is often derailed — Procurement seeks the lowest cost and Sales fights for the highest revenue. The end result may be a solution not as tailored to the end users’ needs as it should be.

Working Together

Communication is key — when Sales tries to avoid interacting with Procurement or tries to skirt sourcing processes, it is because they aren’t getting the info they need. While there are reasons to remain in control of the process,

  • open up communication, but stay in charge.
    When Procurement brings key stakeholders to the table to interface with Sales, Sales doesn’t feel the need to go behind Procurement’s back or otherwise work to undermine process. Build opportunities for such communication into projects, such as open Q&A sessions wherein sales teams review the goals and scopes of work with end users in a controlled environment. Sales will be less frustrated, and will turn around proposals that are both more targeted and more timely.
  • Process is important; make sure everyone understands why.
    Set out the purpose and goals of the initiative early, and lay out key milestone dates. Let Sales know exactly what the timeline is, what deliverables are due, when negotiations will take place, and when it’s time to put best prices forward or risk exclusion. Make sure everyone is on board internally as well. Be sure to let internal stakeholders know that communication during Q&A sessions is encouraged, but communication in other situations is not — have them direct any communication from sales to you if that communication doesn’t occur in a prearranged time and place.
  • Factor in shades of grey.
    When Procurement insists that every aspect of a proposal can and should be commoditized, focusing only on lowest common denominators to compare suppliers, Sales will fight back. When Sales insists that their solution is too unique and its value too complex to fit into an RFP, Procurement fights back. Both sides are right and wrong, because sourcing isn’t black and white. Procurement does need to factor in intangibles while striving to show why breaking down costs, when appropriate, is necessary to compare competing solutions.

Procurement’s Best Frenemy

Sales goes behind Procurement’s back because Procurement hides key details and stakeholders behind walls and gatekeepers. Procurement throws up bigger, tougher barriers knowing in advance that Sales will try to circumvent them. Being open and honest about the steps above is Procurement’s best bet for putting a cease fire in place.

It can be all too easy to view Sales as an enemy when sales professionals go out of their way to buck the system. But when we step back and consider their motivations for doing so, we see not only simple ways to keep everyone working towards the same goal, but also potential for improving the outcomes of sourcing initiatives by bringing together experts on both sides of the table.

Thanks, Brian.