Behind Closed Doors:Judgment day

Allowing emotions to cloud our judgment when choosing a supplier can prove costly, something we can ill afford in these uncertain...

Allowing emotions to cloud our judgment when choosing a supplier can prove costly, something we can ill afford in these uncertain times says Colin Beveridge.

Nobody likes to feel that they have been forced into a course of action. We particularly prize our freedom to choose how we spend our precious time and money - not only in our private lives but also at work.

That's why human nature so often comes into play when we pick our technology partners and suppliers. Purely commercial considerations, such as lifetime cost and financial substance, can easily end up overridden by human instincts.

In some cases this may be seen in a definite antipathy towards "supplier A" - based merely on emotional perception, rather than a rational assessment of their suitability for the task. Likewise, we may favour a proposal from "supplier B" simply because we like their people.

When this happens we introduce risk to the selection process by allowing our judgment to be coloured by our personal perceptions. While discretion is an extremely important aspect of management that needs to be exercised constantly to facilitate successful outcomes, we do need to retain a high degree of clinical separation between the logical and emotional circumstances of the technology vendor selection process. We need to keep clearly focused on our objective and avoid becoming side-tracked by our personal feelings, whatever they stem from.

As guardians of our employer's resources, we are duty-bound to make sure that we get the right deal, at the right price, with the right supplier. If we fail to keep our personal feelings in check, the chances
"It's better to have a drains-up inspection before committing your business, rather than later when unexpected problems start to ooze out"
Colin Beveridge
of achieving this are slim.

Part of the problem is that it can take weeks, or even months, to work out our business requirements, translate them into a specification, approach potential suppliers, distribute requests for proposals to shortlisted vendors and, finally, to sift through the submitted bids. By now we should be on the home straight, racing towards the finishing line, with the satisfying prospect of backing a winner. As decision time approaches, however, the forces of human nature emerge as a threat to any objective analysis.

I have seen this at first hand where an awful lot of energy and expense is expended through unnecessary complications, arising purely from the interference of personal preferences during the later stages of procurement. On occasions my own team have, apparently, tried to manipulate the commercial process, in effect subverting things for their own ends.

Perhaps they were well-intentioned but nevertheless, if I had acceded to their pressure, one project would have cost the company at least a quarter of a million pounds more than necessary - simply because my technicians wanted to work with a particular organisation.

Apart from the obvious financial disadvantages in my example, we also need to remember that our prospective supplier's pre-sales team is very likely to made up of the best people we may ever see from them.

If a key procurement decision looks like it's hinging on a presentation from a highly attractive, intelligent and well-informed supplier delegation, it's worth balancing the impact of this on your team with a look into the nitty-gritty of the vendor's operation. They should welcome this interest and reassure you that your expectations will not be misplaced. It's always better to have a "drains-up" inspection before committing your business, rather than later when unexpected problems start to ooze out.

It also means that we need to have a clear distinction, within our own procurement process, between the technical and commercial aspects of evaluating bid assessments. This is the best way that I know of preserving process integrity, by minimising the risk of cross-contamination between the possibly conflicting interests of those who will select the technology and those who are supposed to benefit from it, the customers.

While this takes time, we are increasingly dependent on third parties to fulfil our obligations to our own customers and so need to be absolutely sure that our suppliers won't let us down.

It's worth taking time to perfect our procurement process because increasingly the business is going to rely on them. Product rationalisation and vendor consolidation looks set to be the name of the game for the foreseeable future, as manufacturers and suppliers struggle to maintain some sort of business for themselves.

This means we may soon find ourselves suddenly faced with a number of unplanned supplier changes and a potentially serious interruption to our own service delivery. If our procurement processes are lacking, this will compound our distress and we may find ourselves making some very hasty, and possibly ill-judged, vendor choices.

Maybe now is the time to look at our process and to make contingency plans if we don't want to find ourselves jumping out of the frying pan into the fire.

What do you think?
How can we make our procurement processes more robust? >> CW360.com reserves the right to edit and publish answers on the Web site. Please state if your answer is not for publication.

Colin Beveridge is an interim executive who has held top-level roles in IT strategy, development services and support. His travels along the blue-chip highway have taken him to a clutch of leading corporations, including Shell, BP, ICI, DHL and Powergen.
This was last published in October 2002

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