Let's face it you don't want to be that team. You know that department at that company that you don't bother wasting your time with if they run a sourcing event ...
In this week’s episode, I had the chance to learn the answer from Colleen Mahoney, the Founder + President of CM Strategy Group and Goddess of Risk Avoidance.
If you missed it live, here’s the Coles Notes ;-)
Going Out to RFP Without Intent to Close
One mistake Colleen mentioned was initiating an RFP without a genuine intention to close the deal. While unforeseen circumstances can arise, it becomes a cardinal sin when organizations issue an RFP, invest third-party time and effort, and yet lack the authorization or solution to proceed. Colleen suggests a straightforward solution – write an exception to the policy. Be honest, be fair, and avoid wasting valuable time and resources.
To illustrate, she shares an experience where a department issued an RFP, received zero bids, and discovered that their reputation preceded them. Third parties were unwilling to engage due to a history of time-wasting endeavors from that department. A lesson learned: third parties are worth playing with, but transparency and honesty are key.
The Power of a Powerful Question
Transitioning into a conversation about a powerful question in procurement, Colleen introduces the vital query: "Who's going to sign?" This seemingly simple question holds immense significance in understanding the decision-making hierarchy, buy-in requirements, and implications for timing. Knowing who will sign the contract is fundamental for successful procurement planning.
The key insight. The inability to answer this question is a red flag. If you don't know who will sign, you're not ready to proceed. Understanding the signatory and mapping it to the organization's structure ensures a smoother process and better outcomes.
How to Avoid Disaster in Procurement
One thing I personally appreciated was Colleen’s strategic advice on avoiding procurement disasters, especially for large IT contracts. She emphasizes the importance of defining the minimum viable product, engaging with integrators upfront, and steering clear of unrealistic long-term projects. By taking incremental steps, organizations can achieve tangible value, align with the bigger vision, and foster better relationships with third parties.
Her words of wisdom: Define the big picture. Chunk it down into manageable increments, and celebrate milestones along the way. This approach not only mitigates risks but also builds a stronger supply chain and lasting partnerships.
Major Risks and Overlooked Considerations
Understand how a solution will be consumed before contracting, engaging integrators early for change management, and thinking beyond the first term of the contract. By considering long-term implications and fostering informed customer relationships, organizations can navigate risks more effectively.
Parting Thoughts: Informed customers make the job easier for third parties. Understanding the vision, evolutionary path, and the needs of both parties ensures a mutually beneficial partnership.
The Bottom Line
In conclusion, avoiding the cardinal sin in procurement requires honesty, transparency, and strategic planning. Colleen Mahoney's insights provide a roadmap for organizations to navigate the complexities of procurement successfully, when accompanied with out-of-the-box SAP Add-Ons (you know who to call) can truly help your team achieve major milestones.