The crystal ball of demand management

I often hear my procurement friends and colleagues bemoan the fact that ‘consultancy projects suddenly appear out of nowhere and require them to perform superhuman acts to finalise/formalise the associated contract before the work begins the next morning’. Whilst I appreciate that many organisations have a tendency to engage their procurement function late in the day, this does not mean that the ‘need’ to engage a consultant has been made on the spur of the moment.

Lets think about it for a moment. Most organisations set budgets each year. Most organisations set business targets each year. Most organisations strive to achieve more with less and have to find a way to make this happen. Many organisations do not have sufficient in-house expertise to identify and manage the degree of business transformation required to deliver their increased targets with fewer resources – they therefore need to turn to external firms for help if they are to succeed.

Procurement teams who have an ongoing ‘business conversation’ with their internal customers should be able to predict where their need for external help is most likely going to appear i.e. they manage demand. They can then assist their internal customers from the point a need is identified, they can suggest potential sources of supply, they can help to scope the work around the outcomes required, they can help manage the selection process and, most importantly, they will not have to work until midnight getting the contract finished the night before the work starts !

I am not naive – there will always be the occasional requirements from left field – but from personal experience I can tell you that this approach makes an enormous difference to the perceived internal value of a consultancy procurement team.