An indictment of procurement departments

Supply Management.com – Getting in on the act

Trying to apply traditional procurement processes to a BPO deal is “like nailing jelly to a wall”, says Scott.He adds: “BPO deals depend on price, service and flexibility. [The] Procurement [department] is good at delivering price and service, but it’s not good at flexibility. [Emphasis mine]”

The reason for this lies in the period of negotiation before a deal is signed. “Flexibility can’t be written into a contract,” he explains. “It depends on developing a relationship and taking a partnership approach with a supplier.” This relationship develops during contract negotiation.

“If a formal procurement process is imposed, the relationship tends to develop at arm’s length.” By the end of the contract, he says, the outsourcer and the supplier barely know each other.

And this is important to the outsourcing firm. As Scott puts it: “You have to say, ‘My partner’s problem is my problem’.”

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