Category Archives: Best Practices

The Problem With Simplified Graphics 4: RFPs Ain’t Gonna Go Live Either!

Yesterday, in part 3, we provided an example where a graphic could get everything right, but still miss a core issue, and that issue was that while they might be a good half a dozen alternatives to the RFP, most procurement departments and professionals just aren’t ready for them. That makes the graphic totally useless for most Procurement practitioners in average Procurement departments.

Yesterday we discussed the alternatives presented by Tanya Wade. But Tom Mills also discussed the issue, and even though we already discussed one of his graphics this week, we like him so much we can’t leave him out of this important issue.

Tom’s graphic was about how to write an RFP. And it is great. Actually, like Tanya’s graphic, it’s truly fantastic. But it has the same problem as Tanya’s … it ignores the underlying issue … that Procurement departments often aren’t capable even with step-by-step instructions.

Let’s take Tom’s 6 steps:

  • determine the business needs: it’s not just determining what the business needs, but what fulfills that need … what the core requirements are, the detailed specifications that are required, the utilization requirements, etc. … all of which requires extremely deep technical or process knowledge that Procurement doesn’t possess
  • introduce your business: long winded introductions don’t always provide clarity, especially since most companies will puff up their business description, mission, and values with marketing puff that will distract from the core goals and objectives … which is where the RFP needs to start to get the organization on the right track
  • project scope and budget: the scope is critical, but you should allow the suppliers to suggest the phases because if you lock them into an inappropriate or inefficient plan you created due to your lack of expertise, you won’t get the best quote; also, it’s not appropriate to suggest a budget on the first contact; the best approach is to precede the RFP with an RFI where you collect basic information on the supplier, their capabilities, and their typical proposal range so you can invite the right suppliers to the full RFP in a budget range that is both appropriate and that you are prepared to pay
  • selection criteria: this is dead on … but it has to be right, which means the Procurement department has to be on the same page as the organizational end-user because they can’t shift the criteria and process later or they’ll risk losing credibility
  • submission requirements and deadline: this needs to be super clear and the requirements should be well thought out and set in stone because, if you change them, you’ll lose credibility — but if you are looking for a custom solution, you need to be willing to extend the deadline for all parties if a supplier can make a reasonably grounded request (where they clearly explain why they need more time and educate you in the process)
  • check the RFP: more specifically, have key stakeholders check … overlooking key requirements will waste everyone’s time …

The reality is that while many Procurement departments don’t know any methods beyond the RFP and e-Auction, they don’t know the process they should be following … and that’s why they can’t write a good RFP, even when they get a great template like Tom’s that tells them what to do step by step — they don’t always have the core knowledge to execute — and that goes beyond Procurement knowledge into deep organizational product and service knowledge and an understanding of who needs to be involved.

n other words, even when the simplified graphic is right, it’s still wrong when the typical Procurement department is not mature enough to implement any of it.

And remember to follow Tom Mills and his Procure Bites for practical procurement proverbs (unless you prefer the pompous pontifications of LinkedIn).

The Problem With Simplified Graphics 3: RFPs Ain’t Gonna Die!

Unlike rock and roll, RFPs are noise pollution, but RFPs ain’t gonna die.

Today we’re tackling a different type of graphic. In this case it’s not one that oversimplifies, but one that misses the core issue — an utter lack of Procurement maturity in the average organization.

This is a case where we don’t have any real problems with the graphic, it’s theoretically correct, but problems with the underlying assumptions, which ignore the fact that most Procurement departments are not ready.

In the graphic in question, Tanya Wade presents 8 valid alternatives to the RFP which all organizations should be aware of.

But here’s the thing, most Procurement departments, to this day, are immature and can barely do basic RFPs and e-Auctions. They have primitive, last generation (if not first generation) sourcing and procurement platforms, and their knowledge puts them on par with the Island of Misfit Toys. They aren’t ready for anything else.

Let’s take Tanya’s suggestions one-by-one.

  • Intake-Orchestration (I2O): few organizations have this, and those that claim to just have a software solution from a third party and accept the third party’s definition blindly don’t understand what true I2O really is — because intake isn’t just software, it’s process — and without a good understanding of the process the organization needs and an effort to incorporate that process into the acquired software, I20 doesn’t work (at all)
  • Guided Buying: you not only need solutions that support it, but the knowledge to configure them properly so that the end users can self-serve
  • Dynamic Markets and Frameworks: the majority of Procurement organizations are not sophisticated enough to handle dynamic markets and frameworks, this has to be done by a third party which requires the use of a Consortium, and while once popular, many of those have disappeared over the last two decades
  • Paid Proof of Value: this is great in theory, but not many vendors will do this in practice — they want a sale, not a cost-neutral pilot — and if you won’t guarantee a sale upon success, even those that will consider it won’t do it
  • Supplier Discovery Platforms: this is about the only platform the average organization is more-or-less able to use, and the -less part is that while they can use it, they can’t always do the verifications that the platform can’t and will sometimes invite inappropriate suppliers to the RFP and won’t realize it until they go through a full detailed RFP and a product verification, which could waste weeks or months of their time
  • Benchmark-Led Renewal: Procurement organizations need external data and external guidance to create benchmarks, and then need guidance on how to interpret them and negotiate on them; and they don’t know where to get this data and how to identify the experts to guide them or negotiate on their behalf (or even find potential help in the first place)
  • Problem Statements: i.e. CrowdSourcing — this was supposed to change Procurement two decades ago, and that was the last time we really heard of it …
  • AI-Assisted Market Scan: for most procurement departments, this is asking chat, j’ai pété or clod to identify products, services, and suppliers; match to requirements; and make a recommendation — which will result in the procurement regularly getting a quote for the perfect product from a fake supplier that doesn’t exist because these tools hallucinate regularly

In other words, even when the simplified graphic is right, it’s still wrong when the typical Procurement department is not mature enough to implement any of it. Without an understanding of readiness, even the right path is not one an organization can walk down.

Follow Tanya Wade over on The Procurement Blueprint.

The World Continuously Changes — Can Your Framework Keep Up?

One of our big themes for the past two years is that Procurement Has Not Changed, and has essentially not changed since the first known manual for public Procurement was published back in 1887. (Handbook of Railway Supplies).

Moreover, not only are the core goals, and processes, roughly the same, the core tech you need hasn’t changed much for two decades. As per our series on how you don’t need to read another state of procurement report for five years and myth-busting 2025 2015 procurement predictions and trends, the only thing that ever changes is the hype-du-jour and the tech-du-jour. Every other barrier to success, risk, concern, and tech is the same year after year after year.

That being said, your supply chains are breaking daily. That’s because, while the requirements for supply chain management haven’t changed, you never implemented the right systems to manage your supply chains (and the up-front procurements) to begin with — systems that understand that the world continuously changes (because many people can’t be happy with what they got — whether they got it good or bad — or the status quo) and you need to monitor and keep up.

As per many of our posts this year, including an updated checklist for major international procurements, most of your systems were built during the age of globalization with opening borders, minimal conflicts, reasonable levels of natural disasters, and efforts to secure major maritime routes were continuous. Now we are in an age of isolationism, borders are closing, sanctions are significantly restricting trade, conflicts are breaking out regularly with not only regional, but global, impacts. Major maritime routes are being cut off. Natural disasters are off the charts. Etc. (That’s also why old strategies for supply chain management are new again. And most of the 2008 trends are still relevant in 2026. See the series.)

As per the series Bob Ferrari (of Supply Chain Matters) on why Direct Sourcing Solutions Don’t Work for Direct, part of the problem is that your procurement solutions weren’t built to be supply chain aware. The other part of the problem is most supply chain software was built to support production with respect to S&OP needs, not real world monitoring, management, and mitigation.

A solution needs to support all of the long-term strategic, mid-term tactical, and short-term operational requirements from initial scoping and planning through final fulfillment which means that it’s not just point-based network design planning, strategic sourcing, supplier collaboration, demand management and EOQ, network management and source allocation, logistics and routing, warehousing, and delivery to customer. It’s also continuous market monitoring, context-based decision making, evaluation, and reconsideration; risk identification, monitoring, management and mitigation; re-orchestration and network updates; etc.

It’s the multi-level integrated framework Bob and I presented last year, which he presents again in his recent article on Materials Sourcing and Planning Decision Making Process Frameworks where he notes that the global wide supply network environment has contused to become ever more volatile and uncertain with each passing week and this requires be a more effective data management, data harmonization and analytics infrastructure. Your business and supply networks need to be ready. Our framework gives you the foundation (and, more importantly, notes that Gen-AI is just an interface to the real capabilities, it is not the miracle cure-all panacea that the silicon snake oil purveyors are making it out to be).

You are strongly encourage to read Bob’s article on Materials Sourcing and Planning Decision Making Process Frameworks and study the framework within, and if you haven’t, go back and read our series on why Direct Sourcing Solutions Don’t Work for Direct. It will be worth your time.

It’s Time To Put An End to Business Spend Management!

Coupa may have built their Billion dollar business on it, but the time for Business Spend Management (BSM) is at an end!

Spend Management may have been the business strategy and philosophy that leaders practice and followers fail to understand according to THE PROPHET (who penned it two decades ago), but that was then, and this is now.

While spend management wasn’t supposed to be just cost management, but instead an incremental change that represents a new type of thinking, a way of taking integrated approaches to not just procurement, but all aspects of non-revenue generating operations and a way of thinking about your global supply chain strategy that would reduce costs, improve processes, and increase profits, that’s not what it became.

Spend Management became a fancy term for cost reduction (and, for the most part, that didn’t include cost avoidance), and even when optimization was used, the objective was always price. The majority of analytics focussed on spend, and even when process analytics were run, they were always framed in terms of cost and savings if automation was increased and/or process time decreased. Even multi-objective RFPs were primarily weighted on price, if they were weighted on anything else at all once basic supplier, product, and/or service requirements were met.

And now, in the age of AI (hype), all of the agentic / BS AI Employee offerings are focussed on offering you solutions to your Procurement problems that will reduce overall cost (base cost, human cost, processing cost, etc.). Cost, cost, cost.

But, for as long as it has existed, that’s never what Procurement was about. The goal might be to keep costs down, but the point of Procurement is the acquisition of a good or service. Supply, NOT Spend. Now, it’s true that the spend has to be less than what an individual would pay on his or her own to acquire the product or service or, as per Coase, there’s no reason for the business to exist, but if the business can’t acquire any products or service to allow them to offer a product or service for sale, the spend doesn’t matter.

That’s why BSM (where the “B” doesn’t necessarily mean “Business”) needs to end. It’s time to return to supply management, with guarantee of supply (not minimization of spend) at the forefront. This means a focus on risk minimization, production management, logistics management, trade management, and other variables that contribute to assurance of supply (and prevention of disruption). Costs can only be optimized once all of these other factors are taken care of.

This is the only way to procure in today’s volatile times, and, moreover, the only way to control cost. Real spend management is not just minimizing unit costs, transportation costs, and other purchase prices, but reducing operational costs across the board. You’re not reducing costs if the organization has to buy 30% off of contract because of delays, disruptions, and defects. And you’re definitely not reducing costs if you have to constantly expedite shipments, buy from alternate sources of supply at higher prices, or lose considerable revenue due to stock outs while paying for warehouse space / retail space.

It’s optimizing human intelligence against dumb automation to make sure processes are optimized, exceptions are quickly processed, risks mitigated to the extent possible, and disruptions detected and addressed as soon as they arise.

It’s Supply Management. (Not Spend Management.)