Top 5 tips for choosing a procurement consultancy

Choosing a Procurement consultancy partner can be a critical aspect of a transformation or sourcing…...

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Choosing a Procurement consultancy partner can be a critical aspect of a transformation or sourcing program and the engagement can vary in support from a small number of days to a small number of years! The supply market is also changing rapidly from the more “traditional” large consultancy firms providing all of the required services to a number of expert SME’s providing more niche and flexible delivery models.

There is no doubt now that having a regular consultancy partner can be a regular aspect of an organisations operating model and used in order to “tap into” subject matter expertise on a flexible basis – this can range from category expertise through to program, change management and technology support.

With this in mind, these 5 tips should be considered when choosing a partner.

My top 5 tips/skills are as follows;

Ensure that the people selling the services have a hand in the delivery.

This sounds pretty basic but it makes a big difference when the principals involved in the business development and sales have a role to play in the delivery. We have seen, on many occasions, a senior partner can be extremely engaged in selling but not in ensuring that the contract deliverables are achieved! This seems to be more prevalent in procurement engagements due to the shortage of true expertise in the market.

Make sure the partner has the real resources and skills to deliver.

It still surprises me that some consultancy organisations put forward delivery teams that clearly do not have the expertise to deliver to the client and try and “wing” the delivery in order to grab revenue. This short-term approach can lead to both you not getting the required expertise and causing contractual issues between buyer and seller. In the longer term, this is also detrimental for the procurement consultancy as you will probably never use them again and the relationship over!

Make sure the delivery model from the consulting organisation is the best fit for your needs.

The days of a standard consulting delivery model for procurement are over! You and your organisation require a really tight procurement delivery team fit within so that the expert resources fully gel with your existing delivery teams and are seen as seamless in many instances. This can, in turn, lead to smaller engagements for the provider, but deliver a better ROI for the engagement and repeat business for the provider.

Have output based commercial arrangements.

This has been the recent trend in significant procurement outsourcing but it must now be a key foundation of any consultancy arrangement whether is be 10 or a 1000 day support. In addition, many of the more recent delivery models in the procurement consultancy market are based on contracting for delivered outputs or outcome irrespective of the type of delivery models…..the key is to work together at the start of the engagement to define these clearly and to make them measurable.

Have real flexibility in your arrangements.

For me, this is the most important factor. We all acknowledge that procurement today is very dynamic and challenging and the business needs from procurement teams change rapidly, especially in light of the global economic conditions. Procurement organisations need to be flexible in terms of resources, subject matter expertise and responding to internal business needs as this fact has never been greater. So, why would you choose a consulting partner that is going to tie you into long term contracts with excessive termination clauses? You need support on a turn on/off or increase/decrease basis with maximum flexibility and the shortest termination lead-times. If the procurement consulting organisation is looking to build a long-term/strategic partnership they should also welcome this approach in order to minimise risk for you.

The market for procurement consultancy is rapidly changing – you should ensure that you are both embracing and optimising this to deliver better results for the business.

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