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How to Spar With Procurement and Legal

In this article on 'how it is possible to steer clear of the most bruising buyer encounters' we will take a look at sparing with procurement and legal.

Procurement: A Surprise Left-Hook!

Sellers have discovered to fear the involvement of procurement - particularly if it happens near to the point of a contract being awarded. For the buyer, however, involving procurement can often be an astute move.

By attracting procurement late in your day, the buying organization is:

Taking advantage of the truth that, at the end of a long buying process, both buyer and seller could be 'running out of steam', i.e. the customer passes the baton to procurement, while the seller has nobody at hand it on to.

vulnerability management Playing divide and conquer, with procurement often playing a 'bad cop' role, coming in to do the dirty work of hammering owner on price.
Sellers tell horror-stories of procurement arriving on the scene after months of discussion, threatening to undo the progress that is made and calling into question key aspects of the contract and its terms.

It might be an overly simplistic view, but procurement, in the seller's mind, is likely to:

Hammer the supplier on price.

Isolate the seller from existing relationships with buyer-managers.

Place additional requirements in terms of a formalized tendering process.

Bring other suppliers to the table.
As most sellers have witnessed these risks are greatest where procurement has little domain or project-specific knowledge or expertise.

How to Spar With Procurement?

How will you side-step a left hook from procurement? Well, searching for procurement earlier will provide you with a better understanding of their role, as well as their motivation, power/influence and past form. Armed with one of these insights, you are less inclined to be taken off-guard by their sudden arrival.

If the manager-buyer, or sponsor, cannot show you in finding your way through procurement, then learn from other suppliers and their experiences in selling to the same company.

Sales Contracts: A Sideswipe from Legal!

The champagne has been drained and now all that remains may be the paperwork. However, as sellers have discovered, they're particularly vulnerable at the contract stage. It is as if owner is about to come out of the ring when, suddenly, legal deals a painful sideswipe.

The manager-buyer may stress the idea that signing will be straightforward, but just wait until legal gets involved. Most buyers can't stand vendor contracts full-stop; with regards to signing them, it is often surprising the issues that arise.

Every time a buying organization drags its heels on signing, it keeps the successful supplier on tender-hooks and almost inevitably delays the project start- or delivery date.

Where resources have already been reserve for the project, this means the supplier has started to incur costs that may not be recoverable. Moreover, as these resources are likely to have been extracted from other projects, it means there are likely to be opportunity and direct costs involved.

In addition, needless to say, there are the legal costs that the seller may need to bear, as well as the additional hours involved for the sales team.

HOW EXACTLY TO Spar With Legal?

Here are five useful tips on how sellers can don't be bruised at the contract stage:

Try to better understand the buying organization's processes, procedures and track record/form according of supplier contracts and 'legals'.

Anticipate in advance the issues that are likely to arise.

Include delays and associated problems in respect of 'legals' as a key risk in sales forecasting, as well as in project-planning.

Involve legal on both sides earlier.

Where possible, simplify all legal and contractual documentation, including the use of standard contract terms, or templates which were approved by professional bodies etc.
Homepage: https://scm.erpsm.co.za/what-are-procurement-and-contracting/