March 12, 2018
What industries come to mind when you think of innovation or being on the cutting edge? Retail or high-tech maybe, but probably not government. What about industries that are on the cutting edge of sourcing and procurement? Definitely not government.
When I made my initial list of target interviewees to talk about how the rapid change of pace of technology and tech services has affected those sourcing professional services, I did not have any government agencies on my list.
But this was a mistake.
A conversation I had last week with someone who works in procurement in government reinforced that you need to keep pace with new technology and ways of working with services providers, no matter who you are. And that there is room for improvement, no matter who or how heavily regulated you are. Remember that:
- Thinking of the sourcing function as an obstacle only breeds more obstacles. True, a key function of sourcing and procurement is to help negotiate the best price and ensure compliance. But the procurement lead I spoke with says her core role is to help make projects more successful. Thinking of this function as an obstacle rather than as a strategic partner, only creates problems. The people I’ve interviewed who act — and are respected — as partners to the business understand the goals of their internal stakeholders. They then are able to better match them with vendors and create contracts that are aligned with to those goals — instead of just meeting a list of static specs.
- Traditional sourcing processes aren’t totally obsolete in the digital age, but they can be better. I haven’t come across anyone in sourcing and vendor management that who agrees with the notion that “the RFP is dead.” One basic input to an RFP is to write down your goals and ideas for how they can be met — and that is a good thing to do! Instead of presenting a hard list of requirements to meet a goal, the government procurement lead encourages her business stakeholders to make procurement more open ended so that the door is open for vendors to offer different approaches. One “start small” improvement to the RFP (and SLAs and MSAs for that matter) that I’ve heard over and over again in these interviews is to start by asking yourself why you care about certain requirements. Answer those questions as though you were speaking to your board. This naturally changes the focus to value expected and delivered.
I’m in the final phases of conducting this research, but if you are actively improving your sourcing processes or have an innovative example of improving your approach, I’d love to hear from you. If you’d like to evolve your current processes and hear what others are doing, stay tuned for this research to publish next month.