Winning bids – how ERP can help you win over procurement
Procurement is often seen as the worst enemy of the smaller consulting firm. And this view isn’t entirely unwarranted. A bad relationship with a client’s procurement function – or their failure to understand the precise scope and nature of your work – can lead to difficulties both in project profitability and viability.
But handled correctly, procurement can actually become one of your firm’s most powerful allies in the process of bidding for new projects. Having the capacity to show exactly how you manage your firm’s fundamentals, costs, and resources to produce results arms you with a powerful tool for making an ally of your potential clients’ procurement teams - and can even help you to make a firm case when the time comes for fee negotiations. Let’s take a look at how.
Procurement are getting involved in scoping earlier
Decision makers are beginning to value having a strategic buying expert with real negotiating and risk-mitigation skills in the room with them when it comes to scoping projects for outside service providers. And when it comes to assessing potential partners for strategic fit and competitiveness.
In service industries, procurement teams are specialists. They tend to have a much stronger awareness of specialized or alternative providers to the traditional big names – as well as the datasets necessary to assess performance and specialism relative to their own organizations’ needs. This means you’re more likely to encounter procurement earlier in your business development efforts and to encounter a more sustained and intensive series of questions about your processes, practices, track record, references, mutual expectations, and service level agreements.
But a more involved procurement team isn’t necessarily a bad thing. They’re more likely to be receptive to your unique value proposition, to be able to assess your suitability as a strategic fit, and to become an advocate for your firm on the client side. It also creates the potential to expedite the entire process of bidding on new projects – reducing your time from bid-to-cash and helping you to correctly scope and staff your projects based on a greater mutual understanding.
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Procurement is becoming more important and more involved
And believe it or not, that’s a good thing!
Procurement’s prominence in overall company strategy is increasing as client demands shift and digital transformation alters the way companies buy and sell services.
This increasing prominence is both causing and caused by a higher willingness to change professional service providers. Companies are now much more dependent on third-party technologies and service specialists as their value chains extend.
This means that as a service firm, your own prominence is rising too. Not only will procurement want to see more of you, they’ll expect to see more from you during the bidding process. After all, the provider they pick will be an essential component in completing their company’s value chain.
Which means you need to work to convince them yours is the right firm for the job.
Your firm must learn to speak the language of procurement
As procurement continues to increase in importance as part of the decision-making unit for service buying, being able to convincingly communicate strategic value to them will become a real competitive differentiator. Here’s how you do it:
1. Keep an eye on cost
This one sounds obvious, but procurement aren’t just looking for a smaller number. They’re looking for a number that makes sense in the context of their desired targets for ROI. They’re looking for a number that fits their overall buying strategy, the desired outcomes for a given project, and that’s time sensitive and specific. They’ll want you to demonstrate how you, your tools – and by extension they – can keep a tight control of both budgets and deadlines, as well as your policies and controls for overrun. And they’ll want you to demonstrate a robust set of ROI projections for the services they’re buying from you.
2. Show that you understand how to identify and manage risks
Demonstrate your process for risk management on the projects you run – how you identify and mitigate against potential failure points, how you ensure adequate project staffing and contingency plans, and how you keep track of running costs, time spent, and work completed versus work in progress.
Doing this will require your consultants and project managers to be able to demonstrate a very granular level of project visibility and control – and keep track of every detail as it develops to mitigate any emerging risks and minimize leakage.
3. Show them how easy it is to work with you
This doesn’t just mean the “soft” stuff like relationship management. More than anything, procurement will be looking for processes, systems, and structure. How easy is it to reach you? How easy is it to reach the right person to answer questions quickly? How easy is it to pay you – how quick are your invoicing and contracting processes? How accurate and timely is your reporting? How do you help them communicate value and ROI to their stakeholders?
You’ll need to be able to answer these questions in order to win procurement’s trust and gain their backing for your proposals.
This is where your ERP system comes in
Although it might not seem obvious, the above procurement trends are important to keep in mind when you’re purchasing ERP.
When you’re under more scrutiny than ever, you’ll need an operations platform that provides you with complete visibility and which integrates data from your finance, HR, and project teams to create a complete picture of every aspect of the work you’re doing for your clients.
Ensuring that you scope your ERP for procurement teams’ needs will equip you with everything you need to show procurement that your estimates are accurate and that you have appropriate processes and controls in place to manage risk, prevent project creep, and ensure that their organization is getting what it’s paying for.
This level of visibility and control will also equip you to ensure that you can properly resource your clients’ projects in a way that ensures they are cost-effective for them and profitable to you, helping to establish transparency and trust between your organizations and positioning you well for further cross-sell and upsell opportunities in the future.
The power of PSA
PSA solutions represent another invaluable tool in dealing with your client and customer procurement counterparts. A seamless platform for sales-to-cash management of your entire core workflow – including project management, automated invoicing, and smart tracking of billed hours – can provide a real edge in helping you to articulate the value of working with you to your clients.
PSA solutions allow you to achieve lower DSO and improved revenue management – and demonstrate to your procurement counterparts that you’ve established a system that mitigates their risk profile as well as yours.
How can Unit4 help you?
We create ERP, HCM, FP&A and PSA systems designed specifically for the needs of people- and project-centric organizations that provide your teams with the tools they need to ensure profitability, keep work running smoothly, and keep your people engaged, happy, and productive.
To see what our solutions can do for you, check out our dedicated ERP product page here, our PSA product page here or click here or book a demo.
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