An article in the Winnipeg Free Press about a large local government ad account (Travel Manitoba) going to an out-of-province ad agency recently got my attention.
Although noone likes to see good revenue leave their local area, Manitoba is a participant in the Agreement on Internal Trade and had they demanded the work be performed locally they may have been in contravention of that agreement.
But agreements aside - this is one more piece of tangible evidence that the selection of professional services vendors is not a local endeavour. In my opinion, for a professional services firm in a smaller market like Manitoba this represents a greater opportunity than it does a threat.
Friday, September 3, 2010
Exclusionary Clauses and The Supreme Court of Canada
Next week I will be speaking to the Canadian Marketing Association (Manitoba Chapter) and their guests on the subject of procuring professional services. Certain to come up during the discussion is the Tercon decision of the Supreme Court of Canada. To read about their decision around exclusionary clauses click here.
Lisa Stiver, a procurement expert from the law firm Thompson Dorfman Sweatman will be joining me and I'm sure she will provide some good insight into the ruling.
In the article attached, Paul Emanuelli, another RFP legal expert, suggests we "avoid the entire “Contract A” entanglement by using simplified procurement formats".
Sounds good to me.
Lisa Stiver, a procurement expert from the law firm Thompson Dorfman Sweatman will be joining me and I'm sure she will provide some good insight into the ruling.
In the article attached, Paul Emanuelli, another RFP legal expert, suggests we "avoid the entire “Contract A” entanglement by using simplified procurement formats".
Sounds good to me.
Saturday, May 22, 2010
Applying Category Management to The Procurement Profession
I've recently been introduced to another Australian firm via my colleagues at ifindconsultants.com that is proposing the idea of using the category management structure (so often found in marketing organizations) within the procurement profession.
Overall I would say here in Canada we are still a community of procurement generalists (with some pockets of specialization) but I believe increasing returns from procurement will only be achievable through greater specialization.
As well, as we see the complexity of the procured goods and services increasing (such as with professional services), the procurement professionals here are being challenged to keep up with that complexity and have realized that generalization is not the path to get them there.
Apparently the same is the case in Australian procurement.
More on this category management development as it becomes available to me.
Overall I would say here in Canada we are still a community of procurement generalists (with some pockets of specialization) but I believe increasing returns from procurement will only be achievable through greater specialization.
As well, as we see the complexity of the procured goods and services increasing (such as with professional services), the procurement professionals here are being challenged to keep up with that complexity and have realized that generalization is not the path to get them there.
Apparently the same is the case in Australian procurement.
More on this category management development as it becomes available to me.
Monday, April 5, 2010
Selling, Service, and Innovation
Kreitner et al (Fundamentals of Organizational Behaviour) discuss three broad types of creativity - creation (making something absolutely new), synthesis (combining existing things), and modification (adjusting some existing thing).
Regardless of the claims of many management innovators that they have "created something new" most have either synthesized or modified existing processes. Try and think of some process or technology developed within the last 20 years that is truly absolutely new and you will soon realize that most are usually an iterative advance over some previous improvement. Even social media which did not exist in it's current form 20 years ago can be argued to be just a different version of the Rotary Club - a place for like-minded individuals to meet and connect.
The purpose of my comment is to not diminish the claims of innovators but to more accurately describe what they have really achieved so we can better understand the value of creativity and innovation.
If your firm is chasing sales, marketing, or customer service innovation in the form of creating new processes or products, maybe it would be better to step back and look at the value and strategic advantage of the synthesis or modification of what already exists.
Regardless of the claims of many management innovators that they have "created something new" most have either synthesized or modified existing processes. Try and think of some process or technology developed within the last 20 years that is truly absolutely new and you will soon realize that most are usually an iterative advance over some previous improvement. Even social media which did not exist in it's current form 20 years ago can be argued to be just a different version of the Rotary Club - a place for like-minded individuals to meet and connect.
The purpose of my comment is to not diminish the claims of innovators but to more accurately describe what they have really achieved so we can better understand the value of creativity and innovation.
If your firm is chasing sales, marketing, or customer service innovation in the form of creating new processes or products, maybe it would be better to step back and look at the value and strategic advantage of the synthesis or modification of what already exists.
Friday, February 19, 2010
What's Happening in Australian Procurement
Tuesday February 9th saw James Leathem, Managing Director of Magnetized Markets (Australia) present to dozens of procurement professionals at The Manitoba Club in Winnipeg Canada. James was a guest of Beyond Referrals and had some interesting research to share. The presentation was also broadcast live on Jon Hansen's Procurement Insight's Business Insights Internet Radio Show.
Procurement of professional services is a big beast and James found a way to make it a more manageable challenge. His firm chooses to focus on the middle space of procurement - projects too big for sole sourcing, but not big enough to require a full blown RFP. He called this the "three quotes" space. Typically this space is either under-serviced ("use who you used last time") or over-complicated (ie: a full blown RFP is used where that expense is not required).
There were a few key lessons that we can take away from James' presentation. First, the challenges around the procurement of professional services seem to be consistent between Canada, the US and Australia.
Second, while it may be easy to find vendors, it is very difficult to find the right vendor. Of the almost 300 companies that Magnetized Markets surveyed about their procurement processes, 54% stated that they were not confident in their processes ability to find the best match for vendors.
According to James' research when a tender is not required, 32% chose to simply use someone they, or their colleague, had used before, 50% used Google - which gave them millions of options but with little meaningful information other than poorly constructed web site information - and 18% used an informal EOI (or some watered down, but overly demanding and poorly supported version of an RFP).
And finally, James pointed out, the "three quotes" space is easy to overlook because it is usually a relatively small dollar value per project but when rolled up into annual spend it represents a significant cumulative dollar value.
The solution, according to Mr. Leathem is to help procurement to push down the buying responsibility for smaller "three quotes" projects to the end user - what he calls "the buyer" but to give them good tools so that they can manage the process effectively, and so that procurement can still be confident that there is an audit trail and reasonable compliance to existing procurement policy. This frees up procurement to focus on the big jobs that require a lot of their attention and time.
For more information about Magnetized Markets and their professional services procurement tool visit www.ifindconsultants.com
For a summary, and to listen to Jon Hansen's broadcast of the presentation visit Beyond Referrals.
Procurement of professional services is a big beast and James found a way to make it a more manageable challenge. His firm chooses to focus on the middle space of procurement - projects too big for sole sourcing, but not big enough to require a full blown RFP. He called this the "three quotes" space. Typically this space is either under-serviced ("use who you used last time") or over-complicated (ie: a full blown RFP is used where that expense is not required).
There were a few key lessons that we can take away from James' presentation. First, the challenges around the procurement of professional services seem to be consistent between Canada, the US and Australia.
Second, while it may be easy to find vendors, it is very difficult to find the right vendor. Of the almost 300 companies that Magnetized Markets surveyed about their procurement processes, 54% stated that they were not confident in their processes ability to find the best match for vendors.
According to James' research when a tender is not required, 32% chose to simply use someone they, or their colleague, had used before, 50% used Google - which gave them millions of options but with little meaningful information other than poorly constructed web site information - and 18% used an informal EOI (or some watered down, but overly demanding and poorly supported version of an RFP).
And finally, James pointed out, the "three quotes" space is easy to overlook because it is usually a relatively small dollar value per project but when rolled up into annual spend it represents a significant cumulative dollar value.
The solution, according to Mr. Leathem is to help procurement to push down the buying responsibility for smaller "three quotes" projects to the end user - what he calls "the buyer" but to give them good tools so that they can manage the process effectively, and so that procurement can still be confident that there is an audit trail and reasonable compliance to existing procurement policy. This frees up procurement to focus on the big jobs that require a lot of their attention and time.
For more information about Magnetized Markets and their professional services procurement tool visit www.ifindconsultants.com
For a summary, and to listen to Jon Hansen's broadcast of the presentation visit Beyond Referrals.
Tuesday, January 19, 2010
Case Studies in Australian Procurement
Magnetized Markets is an Australian firm that creates procurement software and Beyond Referrals will be hosting their Managing Director, James Leathem of Melbourne Australia for a breakfast presentation in Winnipeg, Manitoba, Canada on Tuesday February 9th. Details are available here.
James will be presenting research as well as two case studies from the governments of Victoria and New South Wales on their use of the Magnetized Markets ifindconsultants and vendorpanel software.
James will be presenting research as well as two case studies from the governments of Victoria and New South Wales on their use of the Magnetized Markets ifindconsultants and vendorpanel software.
Tuesday, December 15, 2009
Good Consultant, Bad Consultant
I was recently forwarded some information about Matthew Stewart, a writer and former management consultant alleging that the industry was populated by frauds and charlatans. In fact he proposes that the industry is a house of cards delivering questionable value to nieve clients.
As a buyer of management consulting services you would be wise to listen to what Mr. Stewart writes as the industry, without a doubt, hosts consultants of questionable value. Just like lawyers that are disbarred, and doctors that are stripped of their license to practice, so too are there consultants that should be relieved of their...briefcase? Laptop? Pie charts? Cerlox binders?
And herein lies the rub. Management consultants are not licensed, not registered, not certified, not examined, or in any way required to adhere to a higher standard of ethical practice or competence.
Although you need a license to fish, apparently anyone can advise industry on strategy.
So how do you prevent yourself from being hooked by an advisory crook? I have two suggestions...
First the easy one. Look for consultants with a CMC designation (Certified Management Consultant). It is an international standard to which fewer than 1% of consultants invest the time, effort, funds, and professional-improvement to achieve. It's not common, because it is difficult to get, so when a consultant gets it, they are watched over by the other CMCs so as to not compromise the value of the designation. It is not mandatory, but it can be taken away, and is valuable and the closest thing the industry has to a "license".
Now the less obvious one - expertise. Make expertise the focus of your evaluation of a potential consultant. You can break that down into their functional expertise (what they do - HR, IT, Finance, etc.), and then their category expertise (the industry they know best - manufacturing, health care, emergency services, etc.). Try to match their expertise specifically to your challenge.
Examples of other engagements demonstrating their relevence and previous exposure to your problem are good indicators of expertise. Writing and speaking about problems like yours are a few others. Is expertise transferable across categories? Sometimes. Across functional areas? Not so much.
If expertise is not obvious consider that a red flag.
If the consultant addresses their lack of specific expertise by displaying their magical process that can address any problem in any sector consider that a second red flag (note: process is important but it does not replace or trump expertise).
If, in desperation, they try to win you over with their splendid personality, I recommend you drop the third red flag and run for the hills. You need expertise, not another name on your Christmas card list.
So at this point I should thank Mr. Stewart for bringing the frauds to light and for rightly holding them to task. It's not something any consultant is likely to relish discussing but good consultants won't fear the discussion either.
This issue must be addressed for the good of the clients, for the good of the industry, and for the good of Mr. Stewart's book sales.
To hear the CBC interview click here and scroll down.
As a buyer of management consulting services you would be wise to listen to what Mr. Stewart writes as the industry, without a doubt, hosts consultants of questionable value. Just like lawyers that are disbarred, and doctors that are stripped of their license to practice, so too are there consultants that should be relieved of their...briefcase? Laptop? Pie charts? Cerlox binders?
And herein lies the rub. Management consultants are not licensed, not registered, not certified, not examined, or in any way required to adhere to a higher standard of ethical practice or competence.
Although you need a license to fish, apparently anyone can advise industry on strategy.
So how do you prevent yourself from being hooked by an advisory crook? I have two suggestions...
First the easy one. Look for consultants with a CMC designation (Certified Management Consultant). It is an international standard to which fewer than 1% of consultants invest the time, effort, funds, and professional-improvement to achieve. It's not common, because it is difficult to get, so when a consultant gets it, they are watched over by the other CMCs so as to not compromise the value of the designation. It is not mandatory, but it can be taken away, and is valuable and the closest thing the industry has to a "license".
Now the less obvious one - expertise. Make expertise the focus of your evaluation of a potential consultant. You can break that down into their functional expertise (what they do - HR, IT, Finance, etc.), and then their category expertise (the industry they know best - manufacturing, health care, emergency services, etc.). Try to match their expertise specifically to your challenge.
Examples of other engagements demonstrating their relevence and previous exposure to your problem are good indicators of expertise. Writing and speaking about problems like yours are a few others. Is expertise transferable across categories? Sometimes. Across functional areas? Not so much.
If expertise is not obvious consider that a red flag.
If the consultant addresses their lack of specific expertise by displaying their magical process that can address any problem in any sector consider that a second red flag (note: process is important but it does not replace or trump expertise).
If, in desperation, they try to win you over with their splendid personality, I recommend you drop the third red flag and run for the hills. You need expertise, not another name on your Christmas card list.
So at this point I should thank Mr. Stewart for bringing the frauds to light and for rightly holding them to task. It's not something any consultant is likely to relish discussing but good consultants won't fear the discussion either.
This issue must be addressed for the good of the clients, for the good of the industry, and for the good of Mr. Stewart's book sales.
To hear the CBC interview click here and scroll down.
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