News & Views

News 

Dealing With Procurement ...And Relax! presentation at APSCo SME Forum on 2nd April 2014

Geoff Johnston, founder of L37 Consulting, will be presenting "Dealing with Procurement ...And Relax! at the APSCo SME Forum on 2nd April 2014.
  • Is talking to procurement your worst nightmare...do you leave it until the last possible moment to engage them?
  • Are Procurement teams only driven by savings and driving down your mark-up / margin as low as possible?
  • E-Auctions, are they just another tool for driving down the price?
  • Is Procurement a finance function?
  • Where do sausages and peanuts come into the procurement decision making process?
  • These questions and more will be answered during this presentation.
Book your seat at the APSCo SME Forum today here

5 Tips For Staffing Companies To Win New Business
 
Recruiter.co.uk have published an invaluable article for all staffing agencies from L37 Consulting on how staffing companies can win new business by using these top tips. The article has been published in the Expert Advice column on Recruiter.co.uk. 

Public Procurement Insider has also published the article on their website here 


L37 Consulting Appointed Affiliate Member of APSCo


L37 Consulting is very pleased to be able to announce that it has recently been appointed as an Affiliate Member of APSCo (The Association of Professional Staffing Companies)





The Association of Professional Staffing Companies (APSCo) is the UK’s leading professional recruitment industry body. APSCo provides a unified powerful voice for the professional recruitment industry and its membership which includes small specialist independents through to publicly quoted companies and is growing fast.


Case Study on L37 Consulting's Mentoring 2 SME's on UCL's SMILE website.

Since becoming an approved mentors on University College London's (UCL) SMILE project, L37 Consulting has been working with 2 Start Up companies. Click on the link below to see the case study by UCL about L37 Consulting's work with these companies.
 Read more

L37 Consulting is very pleased to be able to announce that it has been appointed as a Mentor on University College London's Project SMILE (Selected Mentors and Interims for London Enterprises).

Launched in February 2010, SMILE links entrepreneurs and small businesses in London with experienced managers that can help them overcome barriers to their growth by making available a network of proven and experienced managers to act as mentors and/or part-time interim managers.

SMILE is part financed by the European Regional Development Fund through the European Union.

UCL was the first:

a) London University when it was founded in 1826
b) Secular University
c) University to admit women on a equal basis to men

In the Academic Ranking of World Universities in 2010 UCL was ranked 21st in the world in 2010 and 3rd in Europe (Cambridge & Oxford being the top 2).

Notable alumni have included Ricky Gervais, Alexander Graham Bell, Lord Digby Jones, Gustav Holst, Jonathan Dimbleby, Jonathan Ross and members of Coldplay to name but a few.

L37 Consulting is therefore very proud to be part of the SMILE project and to be working with such a highly regarded, culturally and historically rich organisation.



14th September 2010 - New article in Views section of News & Views entitled "Selling The Dream and Living The Nightmare - Or How Not To" available for download.

13th July 2010 - L37 Consulting's Buying Knowledge Wins Carbon Trust Contract for Recruitment Service Provider.

L37 Consulting recently provided a recruitment service provider with bid support throughout the Carbon Trust's tender process, including preparation of the tender document. As a result of applying L37 Consulting's buying knowledge to the tender process the recruitment service provider has now been appointed as a specialist recruitment provider to the Carbon

6th July 2010 - New article in News and Views section - Purchasing is a finance function - Discuss

14th June 2010 - Founder of L37 Consulting is featured on Startuptv.co.uk in the Consultancy channel talking about L37 Consulting. The interview can also be seen on the L37 Consulting Home page. 

17th May 2010 - L37 Consulting advert featured on inside of the front cover of Startup TV magazine.
http://www.bstartup.com/images/newsletters/link.asp?newsletter=64&url=http://www.startuptv.co.uk/magazine/4/

26th April 2010 - Testimonial from Redrock Consulting's owner Phred Steer added. Redrock Consulting were  listed in The Sunday Times Fast Track 100 for 2009.

22nd April 2010 - L37 Consulting's website launched.

Views

Selling The Dream & Living The Nightmare - Or How Not To

 

This is a phrase that was used by one of my clients and really struck me as a buyer. How often does this phrase become a reality? Well, probably more often than either a buyer or a seller would professionally like to admit. So why does this happen? Some of the reasons are discussed here.

1)      Resources – More often than not there will be questions pertaining to the ability to resource the contract both during implementation and for the duration of the contract. Implementation teams are often made out to be larger than they actually are and the ability to cope with the new client’s requirements, in addition to other commitments, in reality involves a good degree of finger crossing behind the scenes. Dedicated resources during the contract will not genuinely be “dedicated” to a particular client as they will be used on other contracts as well – this will obviously depend on the size of the contract, the turnover generated from it and therefore how strategic the contract is, but in the main the delivery team will not be ‘dedicated’.

 Contract Value / Volume of Business – Where the contract value is low or the volume of business is small, variable or not guaranteed at all (in the case of framework agreements) then the commitment to delivering against that contract can be lacking because the contract is considered not to be ‘high profile’ enough. When you are considering tendering or bidding for these contracts always be prepared to put in as much effort as you would for higher value contracts should you be awarded the contract.  If you can demonstrate that you can consistently deliver a high quality service on time every time on the business that does come your way then potentially the opportunities can increase, the volume of business can grow and turnover can increase. It sounds obvious doesn’t it, but so often the types of contracts mentioned at the top of this point are seen as nuisance factors and the opportunity to turn these tactical supply opportunities into strategic / long term opportunities are missed.

“Buying” The Contract – Price is something that needs to be very carefully considered when bidding and tendering. Yes, it may secure you the contract and help you to achieve your targets, earn your bonus etc. as a sales person, but it has to be something that you are able to live with during the contract. If you believe that the price is in the long run going to be unsustainable then don’t put it forward. Price as far as a buyer is concerned is ONE element of the total package and even in these economically challenging days the buyer will be looking for the best value solution, which does not always equate to the cheapest! Even if the potential client has been on the top of your ‘most wanted’ list and by having them as one of your clients may indicate that your company must be good, never lose sight of what you will be expected to do for that client in terms of delivering against the contract. Always be aware, as well, that if you do go in at a low price – and word leaks out to the outside world – what that may do to the perception of your products, services and where you have positioned yourselves within the market. To underline this point, a multi-national company were expected by many in their industry to be the favourites to win a number of packages, each worth millions of pounds, being tendered by one of the key players within their operating markets. Once the prospective client had established that all other requirements had been met, only a small number of companies were left in the tender process and price was the only element left to finalise. One of the competitors was a relatively new entrant into the market and the way that they were funded enabled them to put forward an attractive price and continually lower it throughout the tendering process. The prospective client tried to use these moves as leverage on the remaining competitors. After a few rounds, the company who had started out as favourites to win the packages decided to walk away from the opportunity. They decided that it had got to the point that it would have damaged the market’s perception of their organisation had they continued to reduce their price. At the same time given the fact that there may have been a large rollout programme it would not have been economically viable. Sanity won over vanity, and that should be your objective as a seller when considering the contract in its entirety.

Strengths and Weaknesses of your offering – It is only natural when you are in a bid or tender to promote the strengths of your offering and not discuss the weaknesses. Maybe the questions in the tender don’t ask what the weaknesses or disadvantages are, but by presenting only the strengths or advantages within your company you are providing the buyer with half the story. From the buyer’s perspective, the weaknesses are where the nightmares begin and therefore more important to find out and address than the strengths. Be honest, and state what the weaknesses are, explain how you would overcome them or at least show that you have thought about how you will minimise their impact.  By doing so both you and the buyer can have sweeter dreams.

By selling the dream and not looking at what the nightmare could be, your company and also that of the buyer could end up living the nightmare that may ensue. The above are only some of the ways to avoid giving yourself and the buyer nightmares.

Purchasing is a Finance Function - Discuss

 "Procurement is a finance function and is primarily interested in saving pounds and pennies; this is how they measure value. The online submissions, the lack of communication and dreaded e-auctions are all testimony to this."

I found the above comment on the internet recently and it made me think. As a result I started a discussion on LinkedIn to see what the views of other procurement professionals opinions were. The results were interesting. Some people appear to agree with this statement however the majority seem to disagree to a larger or lesser extent.

Procurement often reports into the finance department and this may lead to the perception that the function is all about saving the pennies plus the fact that Buyers often look to renegotiate contracts to increase savings. As one of the participants in the discussion stated: “Finance clearly has a vote in the procurement process, but not the only vote.Whether procurement should or shouldn’t report into finance is a totally separate discussion.

Procurement in my experience, and from the responses received, has undergone a major change over the years. Rather than being on the fringes of the organisation it has become more of a central and strategic function or in the words of one contributor “Today procurement is the back bone of any organisation which deals in strategic procurement and work towards supplier partnering / relationship...What this indicates is that procurement as a function is viewed as, and has become, more of a strategic function than ever before. This is also reflected in this commentIt’s what builds and enables cohesion amongst all other stakeholders and provides guidance and thought leadership...So is procurement a finance function and what does this mean with regards to bids, tenders and proposals? Well the answer to the first part of the question is that procurement has evolved  into a function that works with finance, rather than for, and considers many other aspects of a suppliers offering other than price alone i.e. “Procurement is essentially about cost, quality, delivery and risk management. Our various stakeholders will have different views on which of these is more important to the efficient operation of the business, so as Procurement professionals we need to assess and balance the key drivers in any acquisition.” Procurement, along with the internal client as part of the evaluation team, therefore looks at the entire proposition put forward by a supplier. Price, as a result, tends to be viewed as differentiator between suppliers rather than the most important element.

In answer to the second part of the above question; as procurement has moved away from the ad hoc (tactical) acquisitions where “quick fixes” were often sought and more categories of spend are being viewed as strategic, or treated in a similar fashion, more Bids, Tenders, Requests for Information etc. are issued by Buyers for suppliers to respond to. As a potential supplier you need to be prepared, if not expect, to participate in these processes and to understand what the buyer will be looking for when evaluating your submission.

For a PDF version of this topic please click on the subject title above.

Relationships with Buyers

So, you have your foot in the door with a prospective buyer. How should you handle the relationship from there on in?

We know this is a difficult line for you to tread. Why? Because we  ourselves have made the transition from buyer to seller. Here are some pointers to start with:
 

  • Respect the Buyer’s Time – Don’t bombard buyers with calls or unsolicited emails. It is always a good idea to check with the buyer when calling them as to whether they have the time to talk to you. What you have to say may be important to you but may well be way down their pecking order. If they ask you to contact them in a few months then do so but be prepared for them to do the same thing again as they may not be looking for what you are offering at that time either.
  • Gifts to and Entertainment of Buyers – Many, if not most, buyers are now Chartered Institute of Purchasing & Supply (CIPS) members or studying for their MCIPS. Any buyer will therefore want to be seen as being above reproach and if they are a member of CIPS they sign up to the Code of Professional Ethics. All gifts therefore should be of a small value and when you are offering entertainment don’t expect business in return. When involved in a bid or the negotiation phase of a contract don’t offer entertainment or gifts as the buyer will be expected to decline them. Timings aside, it is always worth checking what the buyer’s company‘s or organisation’s policy towards gifts and entertainment is – some will follow the CIPS Code of Professional Ethics whereas others, including government bodies, may simply not allow either.
  • Personal Relationships with Buyers – The foundation of business is trust and personal relationships build trust, for the duration of any potential contract and beyond. People buy into people. A personal relationship with a buyer (i.e. friend or relative or former business acquaintance) can play a major part in introducing your product and / or service to the buyer’s business but, for that very reason, don’t assume that person will be involved in the decision making process or the one concluding the deal. A professional buyer will always be expected to declare any personal interest which could affect their impartiality during any decision making and negotiation process.
  • Existing Contractual Relationships – If you are an incumbent supplier you should never bank on your status when it comes to responding to an RFI, PQQ, RFP or ITT. The Buyer may well be satisfied with the products and / or services you are currently offering however this does not guarantee you a place in the next round of the selection process. When evaluating your RFI, PQQ, RFP or ITT  submissions the buyer should be judging each participant on what is presented in the responses and therefore discounting what they already know of your business to ensure that all potential suppliers are treated in a fair, equal and transparent manner.

For a PDF version of this topic please click on the subject title above.

 
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