Jens Hentschel, Founder and Managing Director of the Fivis Partnership, joins me on this episode.
- Jens is in London. He worries about business issues after Brexit if it occurs. Jens’s company, the Fivis Partnership, helps procurement teams become more customer-centric and strategic, with operational excellence.
- The Fivis Partnership also helps sellers understand the procurement side. In the eyes of the procurement team, a deal is a win for both the buyer and the seller. Sellers still tend to see procurement as the enemy.
- Sales and procurement need to work together to deliver value to the respective organizations they represent. When they work against each other, it ends in disaster.
- Author Mike Weinberg wrote about “the procurement pit.” Jens has seen sales training that teaches reps to avoid procurement at all costs. Jens is frustrated when procurement is seen as a rubber stamp.
- Procurement is there to deliver value in the supplies and expense area. Procurement requires skills. Suppliers that try to form an alliance against procurement or outsmart them may find that strategy backfires.
- Jens gives an example from his time as a procurement leader. IT wanted him to “sit in” a meeting to approve a multi-year software deal they were ready to sign. As Jens asked questions, the vendor lowered the price by 20%!
- In that situation, Jens had not yet worked with IT, and he needed to articulate quickly the value procurement brings to the conversation, so he asked questions. There are more aspects of procurement than getting the best price.
- CEOs and CFOs need to drive company sales and contribute to growth. For them, the role of procurement is to get the best supplies and services to support innovation, drive sales, and accomplish growth.
- Procurement must first understand the business needs; the needs of the departments, and the things they may want. It takes dialog and well-reasoned questioning.
- The second step is to divide those needs and wants into things that can be provided internally and things to be provided by external support. That leads to a sourcing strategy and then to an investigation of suppliers.
- There are still misunderstandings that sellers and procurement have about each other. Procurement and suppliers collaborate to serve the end-user. Jens sees transformation and disruption occurring in procurement.
- Jens recommends that you make contact now with procurement at your client. Reach out to them through your contact or on LinkedIn. Involve them early, offering solutions that make them shine internally.