The other day I read a post on this subject on linkedin and it brought back memories of a round table session I had some time ago at some procurement oriented seminar.
We were divided into groups and each group was assigned a discussion topic. Our’s was ‘back door selling’. For those of you not familiar with the term, it means that the suppliers’ sales rep will contact the responsible employee within the company without going through the procurement department and sell his product directly to that person. After the deal is done, the buyer is contacted and requested to generate a purchase order to enable the smooth processing of the inevitable invoice.
This most definitely leads to frustration within the procurement community. Which became very evident at our round table. One of the participants suggested that all suppliers who were caught in the despicable act of back door selling should be black listed. Meaning we should refrain from doing any sort of business with them.
So I suggested to take into consideration the fact that ‘back door selling’ can only exist at the grace of it’s internal counterpart ‘maverick buying’. For those of you unfamiliar with this term, it means that budget owners contact suppliers directly and do business with them outside of existing contracts and without the involvement of a representative of the purchasing department.
This also resulted in a frustration fueled angry response. These stubborn, self-centered budget owners should be relieved of their financial responsibility and suffer some serious management rebuke for their violation of the corporate procurement policy, which clearly states that a purchasing representative should be involved at all times. Signed, sealed and delivered by senior management.
But who is really at fault here? Can we blame the supplier for seeking out what seems to be the best and easiest way to do business? Can we blame the budget owner for doing the same? Or should we blame ourselves for not being able to present either of them with a motivating reason for them to want to involve us in the process?
In addition you may wonder who’s problem it is anyway. How does it hurt you that you are not involved; apart from giving you some spare time? Your colleagues (and also the supplier in question) is missing out on your superior knowledge and skills to help them reach an agreement which is most favorable to them. So why should you be angry. They should be sad.
Now obviously, the first ones to convince of our ability to help them do business are the budget owners and their representatives. Because if the budget owners recognize the value in our involvement, there is an immediate end to maverick buying. Which in turn eliminates back door selling all together. When suppliers knock on the back door and request meetings with project managers, their natural reply should be “we would be happy to meet with you, but we would also like to have a procurement professional present at these meetings”. Not because policy tells them to, but because they want to.
In addition, it would be great if you can also convince the suppliers that it is in their best interest to involve you. Not because you will squeeze them out of margin (you know a supplier who does not make any money will not perform), but because your colleagues in the business value your professional opinion and are open to new and interesting market opportunities and developments.
Now that’s a long way from demanding involvement based on some paper policy.