June 15, 2010
I once played golf with an ex-politician who ran Liverpool Council until he had to resign after being caught accepting bribes from local firms tendering for lucrative council contracts. He claimed there was no impropriety because all the bidders paid him the same amount. I remembered this story when the leader of IBM’s sell-side e-commerce program, presenting at Ariba Live this week, talked about moving selling “off the green and into the blue.” His goal is to make IBM customers’ on-line buying experience (the blue) so great that IBM can reduce the time its sales reps spend playing golf with customers (the green).
Of course, that message went down like a lead balloon at a software event packed with sales reps and purchasing managers (not to mention analysts) who regard frequent corporate shindigs as an important compensation for an otherwise overworked and underpaid existence. He is right that suppliers should integrate their order processing system with customers’ eProcurement applications, such as via a supplier network, but not at the expense of the business relationship. Moreover, though it’s a nice tag line, it confuses sourcing (deciding from whom to buy) with procurement (getting things you need from the approved sources).
At last the waiting is over and the World Cup has started. Some lucky sourcing professionals may have received invitations to attend, courtesy of generous vendors, and may be agonizing over the moral rectitude of accepting such a freebie. Hospitality at this level arguably goes beyond relationship building and risks the appearance of impropriety. Like my politician, you may be confident that you have the personal integrity to avoid such freebies influencing your decisions, but others may disagree. In such situations, a clear corporate policy and a formal, transparent sourcing process, such as the Forrester Wave™ method, can protect the individual from accusations of impropriety. Here’s an example for, appropriately, tools that enable objective, transparent sourcing decisions: The Forrester Wave™: eSourcing, Q1 2009.
Commercial behaviour and customer experience are valid criteria to include in an evaluation. Just as you should downgrade vendors with unacceptable contracts and arrogant, mendacious account managers, so should you give due, but not excessive, credit to those that are most buyer-friendly. Responsiveness and openness are important, but there is nothing wrong with a reasonable amount of hospitality, provided buyers take extra care not to let it cloud their judgement.
The greater ethical concern, IMO, are the people who manipulate sourcing decisions to enhance their own position at the company’s expense. For instance, I spoke with a pharmaceutical company’s IT manager a couple of months ago who is rigging his firm’s eProcurement selection to match his technical skills rather than the company’s needs. Worse, he’d wasted company money on a "strategic assessment" by the incumbent SI, because he knew it would recommend the product for which it had a huge implementation practice.
BTW, if any software company thinks it can secure a high score in my upcoming eProcurement Forrester Wave™ by taking me to the World Cup, I have to say that’s unlikely to work. But I do encourage you to try.