A great ‘Guest Blog,’ from Ellie Hurst (Advent IM Ltd) detailing the supplier’s view of the Procurement process and explaining how if this is done collaboratively, a Win:Win:Win:Win can be achieved for the FM, Client, Supplier and Procurement…
Supplier view on FM and the Procurement process
A while ago I posed a question on Twitter. I was confused at finding myself, as a supplier, being directed to Procurement in order to effectively pitch as a prospective service supplier. I was perplexed as what I wanted was to ideally match quality with a prospective client, to talk about what they expect and need with experts in the respective areas I wanted to offer service on. This was a conversation I had hoped to have with FM, however I was immediately directed to Procurement.
After this had happened more than half a dozen times, I wanted to sense check the relationship between FM and Procurement and where the supplier sat within it. It may seem like an obvious question but as a Marketing Manager for an SME, you soon discover nothing is obvious! My understanding was that FM should be the starting point. FM understood the functions of its business, how to prioritise, what KPIs a supplier needed to hit etc. Once the FM had decided on perhaps three potential suppliers and defined what their businesses needed – working in partnership with the key stakeholders in their business, in terms of service, quality and scope, this would then pass to Procurement to negotiate the best price. This seemed logical and good business practice to me.
So you can understand why I was perplexed at finding myself essentially pitching to the hard negotiator right from the get go. My question on Twitter raised some heads above the parapet and a got quite a few responses. Some from other suppliers, similarly frustrated, some from FMs sympathising, none at all from Procurement. At least not to date.
As Lee asked me for the supplier perspective on this with relation to FMs, I found myself pondering the client. Whether the client is an external client for an FM supply business or an internal client ie in-house FM, as a supplier I want to be providing the best I possibly can to that client. If I am immediately forced into a Procurement situation, value and quality become secondary to the overall price and I wonder if the client is really getting what they need? If you consider your quality to be a major part of your offering you can see why this would become an immediate issue. Of course there are arguments for and against this, as all businesses face spiralling cost and I can see why hard negotiation is required. However if you are a supplier of something like security consultancy, the implications can be major. If you are required to cut your price by a third in order to compete for instance, which third do you cut? Frequency of security lighting servicing? Perhaps then security lights can only be replaced on a monthly cycle, meaning that if a fault occurs within week one, staff, customers, visitors may not have safely lit areas for a month. Perhaps this may also invalidate any CCTV footage if lighting is absent? I suppose the client will only find out when an incident occurs or staff or visitors complain. I imagine that complaint would go to FM not Procurement.
That is a simple example of course and I am sure lots of FMs have contingency plans in place for this kind of event as part of their threat assessment and risk assessment policies. Hopefully you can see my point. Where procurement strength lies is in strong negotiation not within key business functions. A supplier needs to know the person they are engaging with knows the function they supply and knows it well. It is after all, not a one way relationship.
Of course definitions are the key to helping suppliers through this kind of situation. Everyone understanding what value is placed on each part of a potential contract, means FM expertise and knowledge and Procurement skill with purchasing power and working together – informing suppliers.