Category Archives: Guest Author

8 Reasons Best-in-Class Suppliers are Ignoring Your RFP


Today’s guest post is from Brian Seipel, a marking project expert at Source One focussed on helping corporations achieve both marketing and procurement objectives in their strategic sourcing projects.

Imagine you’ve spent hours crafting an RFP defining exactly what you need and finding the right mix of suppliers best able to provide a solution. Despite your efforts, top suppliers are either unresponsive out of the gate or go dark early in the initiative. Suddenly, your supplier pool is shrinking, and key players in the market have thrown in the towel before your RFP even got off the ground. Why is this, and what can we do to ensure sourcing events bring in the best possible candidates?

Failure to Launch

It’s easy to look at an RFP as a way for suppliers to “wow” you, but keep in mind that an RFP is a two way street — You need to “wow” them as well. Your RFP is your first shot at communicating your needs to potential suppliers. As such, the goal of your RFP should always be to attract the best possible suppliers and quickly establish why they should participate.

As soon as your RFP lands on their doorstep, you can bet suppliers are vetting you just as hard as you vetted them. They have a short list of red flags to determine whether they are a go or no-go — if your RFP trips too many, you can bet these suppliers will go dark, even if they are a perfect match. Knowing what these red flags are will help you craft an RFP that draws them in and ensures participation.

Before Distributing the RFP

Prior to reviewing the RFP itself, let’s discuss your potential supplier pool. Two red flags will ground your RFP immediately if not addressed before would-be participants see it.

  • Lack of proper fit.
    How sure are you that the suppliers receiving your RFP really are a good fit for all your requirements? Discovering supplier fit all but a few critical needs late in the game will be a huge time waster, so consider arranging a quick conference call with any suppliers you haven’t worked with before as a measure-twice-cut-once vetting process. Not only will you identify partial or all out bad fits, you’ll be able to establish a level of rapport early on.
  • Lack of a relationship.
    Speaking of rapport, participants know they are likely to run up against incumbent suppliers during the initiative. If you don’t begin building a relationship with them quickly, they may feel they are only being brought in to help you build a case to beat the incumbent down on price. A little glad-handing goes a long way: while you’re reaching out to participants to ensure they are truly a good fit, spend time describing why they were included in the RFP, and get them excited about the opportunity.

Hidden Landmines Within Your RFP

Now that suppliers are fully vetted and raring to go, take a step back and consider what red flags are sitting in your RFP documents.

  • Too much boilerplate language.
    Any supplier who has been in business for even a short time can spot boilerplate language — it isn’t hard to pick out. Boilerplate language creates the appearance of slapdash work, and suppliers won’t want to spend resources crating a thought out into a response when they don’t think as much thought went into developing it in the first place. Unless the boilerplate is needed to fulfill certain legal needs, strip it away.
  • Lack of clarity.
    New suppliers don’t know you, your needs, or what it will take to win your business — and they will bolt if they don’t get this information quickly. Your RFP should be clearly written and organized in such a way to fill in all three of these blanks in short order. At a minimum, include an elevator pitch about your organization, and follow with the reasons behind this RFP and what you hope to accomplish before leading into the scope of work. Lay out the initiative’s key milestone dates, and the deliverables required for each.
  • Poorly defined scope of work.
    It is all too easy to gloss over fine details when building out a scope of work. Stakeholders who are intimately familiar with the initiative from the inside may not consider an outsider’s (very limited) point of view when constructing this section. Nothing sends suppliers running faster than a weak scope, which gives the impression of a poorly defined project requiring too much of a time investment in gathering enough information to participate.
  • No opportunities for communication.
    Even the clearest RFP and most detailed scope of work only tells half the story. Open communication is needed to flesh out requirements and delve deep into the underpinnings of a winning proposal. Are you building time for Q&A sessions into your initiative, and clearly spelling out your availability to participants? If suppliers get the sense that they can’t engage you, they won’t risk spending time drafting a proposal only to learn later on that they missed the mark entirely.
  • Needlessly extensive questionnaire or requirements.
    The longer your questionnaire, the more time and resources suppliers will have to spend responding. Include too many, and you may make responding too difficult. Is each question strictly required to determine if a supplier can meet your needs? Cut out any superfluous questions with extreme prejudice.
  • Requests for financial information.
    The first requirement on the chopping block should be the need for one, two, or even three years of financial information if you don’t actually intend on examining them. Private companies often balk at this requirement, and RFP issuers often subsequently drop it after they decide they don’t truly need them. There are other ways to ensure financial stability, such as Dun & Bradstreet checks and reference checks. So ask yourself, do you need all those years of financial information? Now ask again, do you really need them?

Strategic Sourcing is a Two Way Street

Remember that an RFP is a two way street. Just as suppliers are trying to win your business, you need to ensure they see the value in doing so. Clearing away the red flags above is the first step in meeting that goal.

Thanks, Brian.

Navigating & Keeping Up with Digital Agency Landscape: Part III


In this three-part series of articles, Kathleen Jordan, Associate Director at Source One Management Services takes a look at the complex digital agency landscape and provides insight on the process of agency sourcing: considerations when sourcing, vast digital agency options, and the need for bridging the gap between marketing and procurement departments. Kathleen Jordan is a strategic sourcing subject matter expert with a wide range of experience in the marketing category who works closely with marketing professionals and helps alleviate challenges encountered when overseeing agency relationships.

In Part I of this series we reviewed common considerations for sourcing digital agencies. Then, In Part II, we took a look at the vast types of digital agency options and what they mean for a company’s sourcing strategy. Today, in this third and final part, we discuss the importance of aligning Procurement and Marketing for Digital Agency success.

Marketing and Procurement teams may not always see eye-to-eye. Both teams have different goals, measures for success, and serve as unique functions in an organization. However, the digital space is a fast-paced environment with various options and the alliance of these two departments when sourcing digital agencies can have substantial strategic benefits for the company overall.


Procurement can help Marketing identify current trends and potential risks.
Marketing strategies are constantly changing, altering what services agencies provide. A thorough RFP process will bring to light an agency’s service portfolio (or lack thereof) not only for current marketing campaign initiatives but also with respect to future strategic options. This process also highlights pricing options and helps provide insights into industry standards.

Procurement can identify areas of improvement in compensation structures and contractual terms and conditions.
This helps Marketing optimize their budgets. Procurement teams have a deep understanding of company budgets and possess a whole slew of strategies to stay within them. Aligning these two departments helps ensure that the Marketing budget is used wisely while ensuring that contracts are put in place that drive further value from the products/services purchased.

Procurement can also carry out a proper end-to-end agency search.
This ensures that the selection criteria are met and that only an agency that can deliver what they pitched with full transparency and strong execution is onboarded. Beyond pricing, properly defined RFPs can provide marketing with a full view of how agencies compare in their offerings. Sourcing an agency that is a creative fit is also important; Procurement teams can facilitate the process for identifying agencies that are not only budget friendly, but also suit marketing’s creative vision.

Procurement can also help Marketing enhance contracts to include KPIs based on metrics that can be tracked on a regular basis.
This ensures that Marketing is able to effectively measure performance. As mentioned in part one of this series, there is the potential for scope creep, missed deadlines, and poor communication when seeking outside help from an agency. Procurement’s involvement in the sourcing process can help prevent these challenges by putting performance metrics in place from the start. This vendor management structure can help boost productivity but also foster a strategic relationship between the Marketing organization and the digital agency.

In some cases, bringing in a procurement consulting firm may be helpful in bridging the gaps between Marketing and Procurement teams. The right Procurement consulting firm will have the needed category and relationship-building expertise to align the two different departments. They can act as a mediating force that remains close to the goals of each team with the objectivity needed to maximize success.

Options for digital agencies are aplenty. Full-service digital agencies, handling all work from strategic and creative to media and production, can serve as a good fit if you are seeking out a one-stop shop and are looking for the ability to ramp up and down quickly and easily with a dedicated account team. Smaller shops give you greater visibility into their processes and your account may be considered a key one in which you have the attention of agency executives. More niche agencies can also provide you with access to greater expertise given they have a focus on one core competency and do it really well. Overall, there are benefits to both agency models and Marketing and Procurement must collaborate to determine the benefits that will meet their company’s objectives and pursue those opportunities further.

Addressing Tail-End Spend Management

Today’s guest post, which is part two of a two-part series, is from Gonzague de Thieulloy, a Managing Director at Xchanging Procurement who manages tail-end spend management programs at Xchanging’s largest European customers.

In yesterday’s post, we defined tail-end spend, which is the 20% or so of spend with the organization’s non-strategic suppliers that, due to its complexity, is typically left unmanaged and which, unaddressed, presents the company with significant risks of the financial and brand variety. In today’s post, we discuss the solution for tail-end spend management which will address the complexity, reduce the risk, and present the organization with an additional savings opportunity.

The Tail-End Spend Solution

Because of the high degree of complexity and risk involved with tail-end spend, companies are increasingly looking at support from specialist external providers to manage their 20%. It’s more efficient to subcontract the management of this tail-end spend rather than to manage it internally and, due to economies of scale, it makes more financial sense.

Key Success Factors when Managing Tail-End Spend

There are several success factors to consider when managing your tail-end spend. Here are three primary ones to consider:

  1. C-suite buy-in — Senior buy in and support is imperative to the successful implementation of a tail spend management program;
  2. Visibility and collaboration — The team responsible for implementing the change management process needs to ensure the new strategy is communicated clearly to the rest of the business, as well as ensuring the team is visible and on-site at least 50% of the time to help with any queries. In order to increase the success and adoption of the new processes put in place, they need to advocate it;
  3. Utilizing procurement expertise and technology solutions as an integrated and managed service — The level of procurement support given to customers throughout the change management process is critical to ensure procurement and processes are fully connected.

Reaping the Benefits

When rolled out properly, a tail-end spend management solution can generate 15-17% savings, which can make a huge addition to the 5-10% savings typically generated from managing traditional spend. But the benefits go much further than just cost savings. Tail-end spend solutions typically:

  • Improve supplier management – A large supply base can be paired down to a few approved suppliers, with improved terms and associated cost savings, as well as reduced risk of working with unknown companies;
  • Increase spend visibility – Expanding the range of spend under management helps to create transparency around where the money is spent and what it is spent on, and results in new spend rules that strengthen the overall business;
  • Enhance spend efficiencies – Although categories of tail-end spend are often low value/high frequency transactions, they also always include high value transactions; managing this spend creates opportunities for companies to effectively allocate and control budget spend from previously unmanaged areas;
  • Streamline procurement processes – The key value-add of a tail-end spend management solution is it streamlines the entire tactical buying process associated with low-value spend.

It took more than ten years for leading companies to get the majority of their strategic 80% spend fully under control. We’re just in the early days with tail-end spend management, but by understanding the unique challenges of this 20%, it will take far less than ten years to have 100% of external spend under management.

More information on Tail-End Spend Management can be found on Xchanging’s Tail-End Spend Management page.

Thanks, Gonzague!

The Importance of Tail-End Spend Management


Today’s guest post, which is part one of a two-part series, is from Gonzague de Thieulloy, a Managing Director at Xchanging Procurement who manages tail-end spend management programs at Xchanging’s largest European customers.

Tail-end spend management is finally becoming a procurement priority, and for good reason. Historically, procurement organizations have been focused on trying to manage their strategic spend, the 80% of spend that represents around 20% of their suppliers. While companies have been striving to manage those strategic suppliers, they’ve left the myriad of smaller suppliers — the ‘tail-end’ of the spend — unmanaged. But that is starting to change.

Until recently, you would have been hard pressed to find any company managing their full strategic spend properly. Ten years ago, most organizations were only confidently managing 40-60% of that spend, at best. Now, due to procurement’s increased visibility and greater strategic role, many companies are managing their entire strategic spend effectively — the full 80%. This has left more than a few companies wondering what they can do with the remaining 20%, not least because of the financial benefits. Everest Group suggests that inclusion of tail-end spend increases procurement outsourcing savings potential by 1.5 times. But this is just one reason to manage tail-end spend.

Complexities of Tail-End Spend

However companies are discovering that they can’t use the same procurement methodologies for tail-end spend as they have for their strategic spend. For one thing, tail-end spend is far more complex than strategic spend: there are many more suppliers, the spend is very fragmented, and there are a lot more individuals buying. Tail-end spend “buyers” are end-users: people in HR, marketing, finance, IT, and so on — ordering goods and services as needed. They are not professional buyers, in the traditional procurement sense, which means trying to manage this spend requires change management — an added layer of process. As long as the total cost is less than the agreed threshold for tail-end spend, then these “buyers” can place orders with whomever and however they want.

Tail-End Spend Risks

Not only is the 20% tail-end spend complex, it can also be very risky, which is another reason organizations are now starting to pay attention to it. With the 80% spend, companies typically have an experienced buyer managing key suppliers and auditing those suppliers on a number of different aspects. The company that is on the ball knows everything there is to know about their strategic suppliers: whom they work with, their values, their practices, their working conditions, who their suppliers are, etc. With unmanaged tail-end spend, nobody is looking after these suppliers. Companies have no idea who they are buying from, making them susceptible to a number of risks.

One such risk is the potential damage to a company’s reputation. With all of the corporate sustainability issues now in the spotlight, unmanaged spend means companies may be doing business with suppliers that violate their own CSR principles. Imagine the harm it would do to your brand if it were discovered that one of your suppliers was using child labor or heavily polluting the environment. The damage could be irreparable. Beyond brand damage, you would also be responsible for supporting companies carrying out these practices. The reputational impact alone could put your company into a tail-spin.

Another type of risk that is common of unmanaged tail-end spend is a best practice risk. When companies let people from across the business buy from whomever they want, there is a chance that they will just buy from a personal connection, or from a supplier with whom they have a historic relationship. This often results in individuals overpaying for what they are buying which is, of course, financially damaging to the company. But more seriously, they may be in breach of fair practice regulations, putting the company at risk of being sued.

Companies that fail to address this complexity and risk are leaving a lot more on the table than they think. In tomorrow’s post, we will discuss the tail-end spend solution.

More information on Tail-End Spend Management can be found on Xchanging’s Tail-End Spend Management page.

Thanks, Gonzague!

Navigating & Keeping Up with Digital Agency Landscape: Part II

In this three-part series of articles, Kathleen Jordan, Associate Director at Source One Management Services takes a look at the complex digital agency landscape and provides insight on the process of agency sourcing: considerations when sourcing, vast digital agency options, and the need for bridging the gap between marketing and procurement departments. Kathleen Jordan is a strategic sourcing subject matter expert with a wide range of experience in the marketing category who works closely with marketing professionals and helps alleviate challenges encountered when overseeing agency relationships.

In Part I of this series we reviewed common considerations for sourcing digital agencies. Continuing on, today we take a look at the vast types of digital agency options and what they mean for a company’s sourcing strategy.

The Many Agencies

One of the most challenging phases during an agency search is building the initial list of agency candidates and ensuring the list meets the basic criteria. Some vetting will be required through an RFI process or onsite capabilities presentations prior to the RFP phase and pitches. When a marketing professional casts a wide net into the digital agency pool, they will find a combination of large full-service digital agencies and smaller, more specialized agencies.

There are agencies that define themselves as primarily social media agencies, whereas other shops are comprised of digital developers — agencies that develop mobile apps, websites, etc. Other agencies are focused on search engine marketing — the leading required service and foundation of digital marketing, in which SEO and paid search campaigns are managed. There are also suppliers that offer analytic services where consultants study the results of a digital campaign and advise where tweaks should be made, tracking against key performance indicators and indicating ROI results. The list goes on to capture various other forms of digital marketing services such as the full-service model, website design and user experience, display advertising, e-mail campaign management, CRM platforms, etc. Todd Wasserman of Mashable wrote an article calling out a few additional agencies on the rise, including:

  • Viral video factories
  • Agencies specializing in the development of GIFs, referred to as “the animated billboard for the digital age”
  • Agencies focused on creating digital IDs for products; for example, ask yourself: What if my washing machine could recommend a trusted local service agent to perform maintenance or address issues when needed? These agencies are looking to make physical things smart, allowing a product to have its own digital profile.

Referring to the ever-changing digital marketing world, Wasserman writes, “this state of flux has swung open the doors for entrepreneurs, usual refugees from big agencies looking to capitalize on new opportunities while their counterparts are riding the TV gravy train to the last stop“. Overall, the digital landscape is continuously shifting, and some brands are already beginning to think about post-digital. Digital Marketing Depot’s whitepaper also notes that “dozens of specialty agencies have launched over the past five years” and the number continues to grow. In addition to Wasserman’s remarks about this trend, Digital Marketing Depot believes that the rise in specialty agencies was “prompted by the mid-market opportunity created by holding company agencies with huge minimum spends, and wireless technologies that have made it easier to start up small businesses“.

There is no right or wrong way to allocate your digital requirements across an agency network. The optimal model will depend on a company’s overarching marketing strategy and internal resources. A marketer may find that their current creative agency that supports their traditional advertising tactics is best suited to handle their digital channels as well. After all, the account management structure already exists and price breaks may be applied if the scope increases.

Regardless of the digital requirement that needs to be fulfilled, marketing professionals should keep in mind that their procurement counterparts can serve as decision support to help identify the agencies best suited to meet the advertiser’s needs. In the final part of this blog series, we’ll explore the need to bridge the gap between marketing and procurement.

Thanks Kathleen!