Why procurement and service businesses are natural allies

Selling services is never going to be completely transactional and all about price. It is always about something more. Buyers need help to navigate complex problems that weren’t conceived of a year ago – let alone 10 years ago – and service providers can help them.

Unfortunately, many people find selling to procurement complex, adversarial and intimidating. It doesn’t have to be that way. In fact, if you sell services you will actually benefit from cultivating a relationship with procurement.

According to procurement expert Adel Salman, procurement doesn’t “own” services expenditure (although they are responsible for raw materials) and has to satisfy many other stakeholders who are actually using the service and paying for it. Therefore, it is part of procurement’s job to engage good service providers and help them deliver exceptional performance.

Increasing expectations of the procurement function are also driving this trend. A survey of 70 chief executive officers by brain.net revealed that CEOs expect much more from procurement departments in areas like innovation. In his book Selling To Procurement, Christopher Provines says that “…increasingly, particularly for more mature organisations, procurement is being asked to help the company grow.” He explains that innovation needs to be thought of in the broadest sense – process/business model innovation and product innovation – and that often, suppliers can contribute significantly to both.

Provines cites a survey of more than 300 chief purchasing officers by CAPS Research, a supply chain research firm, which revealed that about 60 per cent saw innovation from suppliers as “extremely important”. This is encouraging news for suppliers, and especially for suppliers of complex services.

Robyn Haydon is a business development consultant specialising in business won through formal bids, tenders and proposals. She is the author of two books on proposals and sales, including Winning Again: a retention game plan for your most important contracts and customers http://www.winningwords.com.au/winning-again/