Are you focused on the outcome of what you are buying or on the process of buying it? I think that most people in your shoes would say “both”. From my point of view, the answer is clearly the process. People in sourcing and procurement are very concerned with following the “right” process and not very focused on buying the “right” outcomes.
Oh sure, there are metrics, service level agreements and penalties for poor performance (often called credits). But these things are not outcomes. A 95% SLA for a specific task in a call center is not an outcome. Maintaining customer retention at or above a certain level is an outcome.
The outcome is the most important part of the relationship between your company and the supplier. And, it is what the executive team is looking at in terms of success.
An outcome can be something like, improved customer service scores, or better JD Power ranking in the buying company’s industry. These outcomes are only partially in the supplier’s control, though. No wonder it is easier to focus on the buying process and leave the outcomes out of the equation. But if you want a seat at the executive table, to be treated as a respected business person, you will have to learn how to buy outcomes.
Here are 5 questions to ask your executive team to help you buy an outcome.
- What is the single biggest change you see happening in (reference his/her area, such as marketing, call centers, shipping)?
- What one thing, task, process, function, needs to improve to address that change?
- What do you see in the supplier base that could be leveraged to meet that needed change?
- Who do you think on a supplier’s team is best able to have a conversation with our team about the need to change?
- How do you want to be involved in conversations with that supplier to define a potential outcome?
So, what outcomes does your company want? (Hint: Not a single executive wants to get a $15,000 credit from the supplier if the supplier is 1% below its SLA.)