Food for thought: Getting to know procurement teams and their guidelines

Are you finding it increasingly tricky to get on to clients' preferred supplier lists (PSLs)? Or are buyers asking you for new forms of "assurance" and data so they can add you to theirs? If so, you are not alone. Navigating the new procurement maze is a common problem for many consultants, particularly for independents and small to medium sized firms. The credit crunch and a desire to take a more controlled approach to buying the right consultant for the job is behind the move, and consulting specialists Sourceforconsulting.com linked with Top-Consultant.com recently to deliver a seminar that addressed the subject in more detail.

At "Working with Procurement Departments" end users such as AstraZeneca, BBC and BT gave real life examples of how their procurement teams buy consultants and what they look for in a firm when making their all-important short lists. Other topics covered included pitches and presentations, pricing and negotiation. Below are some key facts on the new approach many procurement teams are now taking:

A typical client spends between 3-5% of their costs on consultants

60% of this goes on large consulting firms (Tier 1), with 20% each going on SME firms or well known specialists (Tier 2) and independent consultants/small firms (Tier 3)
60% of firms now use a preferred supplier list (PSL) from which to buy their consulting, however, it is still early days for many and compliance may not be high
A common approach to buying consulting is emerging though: where a PSL is in place, clients may still use other firms where it can be justified
Buyers are also aiming for better communication to end-users about the skills or consulting firms on the PSL, a process to educate/engage end-users so they make better use of consultants, plus using a benchmark procurement process against other firms in order to identify best practice
There are still big challenges ahead, the largest one being segmentation - how do you identify who the good Tier 2 suppliers are? Tier 1 and Tier 3 are easier to quantify but what about this critical group in the middle?
Knowing the name, knowing what they do and gauging whether they are any good are the key factors when considering a good Tier 2 organisation - and companies like sourceforconsulting.com and top-consultant.com are helping buyers to do this

For more information on this subject, visit www.sourceforconsulting.com and www.top-consultant.com

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