Should buyers get closer to sellers?
I’m lucky to have been both a procurer and a supplier at many levels of negotiation. And this has given me a good understanding of what makes both ‘sides’ tick.In essence I found I could buy smarter by understanding and empathising with the guy across the table.
But is this still the case? I see company policies that ban broad discussion with individual suppliers prior to tender. I often see bans on any perceived ‘fraternisation; entertainment, lunches, coffees or anything which might even give a whiff of non standardisation or risk of bias. Frankly it makes me wonder.
Both buyers and sellers are individuals and one needs to understand their approach.. Can you trust them? Can you work with them if things go wrong? Are they empowered? Granted you can tie them in knots in the words of an RFP or contract but there will always be obscure caveats and omissions. You also may not even be asking the right questions or know enough about their specialist business. Surely you must do everything to educate yourself about that market and the players within it but how can you do that at arms length?
I guess it may be a matter of trust or possibly lack of it. Do companies feel uncomfortable about their buyers forming professional relationships with suppliers? Are they concerned that a buyer will be influenced by a lunch, a day at Twickenham or a site visit? Even if at the end of it that person is more knowledgeable, compared notes with peers, and has a better sense of that provider’s capability?
I am all for as much direct interface as possible. I know it never swayed me in my judgement and I am sure it would not influence yours. After all you might learn something important as well as possibly have a nice time doing something worthwhile. Surely there is nothing wrong in that. Is there?
* Mike Platt is a business travel industry commentator – http://wwwbusinesstravel.blogspot.com/
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I’m all for open, productive dialogue between buyers and sellers, whether as part of a tender or at other times. But beware of thinking “I can’t be bought for a free lunch” – it might not look like that to others, and therefore you need some groundrules to protect you, in the form of a well-drafted set of ethical guidelines, to be used consistently across an organisation, and by buyers and suppliers alike. Once these are in place, and working properly, they don’t get in the way of sensible professional relationships, but everyone knows where the line is drawn.
Mr. Platt, i would like your advice on how to become a supplier, i have tried a couple of times but was faced with disapointments, rejections hence heading to failure as in most cases the “B” guys didn’t want to listen or even give one a chance to prove themselves. They have no time for beginners, they find us unqualified to do business with,, but surely without being given an opportunity no one can achieve anything, everything begins from somewhere whether big or small.
You have been on both sides of the game i believe you know what tricks one can use, or the right channel to follow…
What word of advice would you give to a desperate person???
Regards
CG
CG
I may be mistaken in doing so but I am going to take your question at face value. I am also assuming that when you say you want to be ‘a supplier’ you mean a salesman?
If I am right I only have one hopefully constructive comment, taken from personal experience, that I can make.
When I wanted to go from selling into buying I set out to show the interviewer just how much I knew about the other side and the way they think because I was one of them. I then explained how I would go about converting these people using my unique inside knowledge.
As I said earlier, I do not know for sure where this question is coming from but i hope my serious answer provides pause for thought!
I agree with Mr Barral that buyers must avoid any perception of favoritism when interacting with suppliers and that an organization should always have written ethical groundrules.
While ethical groundrules are needed, they should be clear and also allow for some sort of communications between buyers and suppliers prior to tender. Prior to issuing an RFP, buyers must research the industry and market and this cannot be done thoroughly without some interface with prospective suppliers. Organizations with general policies that ban all communication risk RFPs that require obsolete, incompatible, or unduly expensive solutions to their needs.
The key to ethical pre-tender communication is equal access and transparency. There are several mechanisms for pre-tender communications that ensure fair and equitable treatment: 1) ‘meet the buyer’ days where any supplier can also sign up for a one-on-one meeting, 2) published requests for information or market surveys that are distributed to all suppliers, 3) question and answer forums that are publically available.
These mechanisms not only enhance the professional relationships between buyers and sellers, but the resultant higher quality RFP also shorten the tender evaluation and negotiation process.
I agree with Mr Platt, however i would assert that whilst the majority of buyers are able to make objective purchasing decisions without fear of influence there will always be some that will be influenced. Once you can assume that there will be some individuals that will be swayed it becomes a business necessity to have some kind of ethical purchasing structure in place.
I work in outsourcing and have often bought on behalf of customers, if I award a valuable tender to a supplier and it became clear that I had been socialising with said supplier during a tender experience it would be embarrasing and damaging to the relationship. As such I find other ways of tracking market movements via seminars, conferences or research businesses.
In large organisation the added benefits that a buyer may receive from spending more time with suppliers might be out-weighed by the potential reputation risk of the few that would take advantage.