Upcoming Founder Articles & Appearances:

Mark Trowbridge  wrote an article for ISM eSide Supply Management's June Edition titled "Negotiate Like a Master".  Click here to visit that ISM article site.

Mark Trowbridge will be a keynote presenter at the ISM Services Conference in Tempe, Arizona on December 6th - 7th.

Two interviews with Mark Trowbridge were recently-published by Buyers Meeting Point.  To view each article, you can click BMP Interview #1 Link and BMP Interview #2 Link

Next week, I'll be making a keynote presentation at the ISM Services Conference at the Pointe Hilton Tapatio Resort in Arizona on the topic of Creating a Great Services RFP. Without letting the cat out of the bag, this article will present a few of the elements of my presentation...

Typically, sourcing and contracting for services is more-complicated than for products. A Request-for-Proposal (RFP) for services therefore must be constructed in a sophisticated manner. Key differences between services and products include the following:

Differences Between Products and Services

First, products are tangible (they can be defined) while services are intangible (only the results can be measured); 

Second, products are easily measured (units of measure) whereas the quantity of a service does not determine the results;

The legal foundation for the acquisition of products favors the buyer (under the Uniform Commercial Code [UCC] in United States or the Convention on the International Sale of Goods [CISG] internationally) while there are fewer protections for the buyer of services (Common Law in USA, etc.);

Third, while TCO modeling does apply to both products and services, there is a greater focus on non-price cost factors associated with services;

Fourth, product is delivered at a point in time while service value is received over time;

Fifth, products are often ordered on just a purchase order, while services usually require a contract;

Sixth, to acquire a product, we need to answer "What?", "Where"? and "When?" whereas to acquire a service we need to answer "Why?", "How?", "Where?", "When?" and "Who?". 

So what distinguishes a GREAT RFP for services? Here are three of eight attributes I'll be presenting to the ISM Services Conference (in addition to explaining some different RFP leveraging techniques)....

First Attribute - Put the Carrot First: A great RFP should begin with a well-articulated communication that concisely describes the services being solicited, ballpark scope, and desired length of contract. Just as you were taught to write a strong business letter in graduate school during Business Writing 101, the first paragraph needs to grab the attention of a supplier's leadership team. Don't hide this information later in the document...the supplier may never get there.  

Recently, I assisted a large financial services firm develop a complex RFP for Software-as-a-Service P2P technology solutions.  One of our team's most-important activities was to properly motivate potential bidders by involving their senior executives AND dangling a carrot which captured their interest.  We did this by personally contacting the involved company sales executives to "plant the seed".  The first portion of the RFP was then worded to clearly summarize the scope and opportunity to grab their attention and interest... 

Second Attribute - General to Specific: A strong RFP will move from "General" to "Specific" topics. In the introductory communication of a RFP discussed earlier, the dates for performance should be stated up front (don't hide them later in the RFP).   Key performance dates might include (i) Submission of Intent to Bid, (ii) Submission of Questions, (iii) Bidder's Conference, (iv) Submission of Proposal, and (v) Bidder Presentations. The remainder of a great services RFP will progress to general questions about the bidding company, more specific questions about the proposed service solutions, then very specific pricing questions, and finally a response to detailed legal terms.

Third Attribute - Ask Meaningful Questions:   Most of us don't wear the cheapest suit we could buy, or drive the least costly car in the marketplace. But many of the questions found in a typical procurement RFP for services often focus upon controlling bidders' possible responses to keep price low, rather than eliciting creative responses which highlight each bidding firm's unique capabilities. For example, forcing a "Yes" or "No" answer, rather than asking "Why?" or "How?" Great RFPs are sometimes require suppliers to apply their unique capabilities to hypothetical challenges in a manner similar to behavioral interviewing of an executive job candidate.

If you're attending the ISM Services Conference, you'll be among several hundred procurement professionals who attend ISM's second-largest conference. Please take a few minutes to drop by my presentation on Friday morning to learn more about Creating a GREAT Services RFP. I'll also be hosting a networking table on the topic of "Buying Consulting Services" Thursday morning and serving as a judge for a Graduate Student Competition on Friday afternoon.

Strategic Procurement Solutions trains procurement groups around the world in our Expert Strategic Sourcing™ (3 day) onsite training workshop (which presents many other RFP preparation techniques).   Readers may contact us at Info@StrategicProcurementSolutions.com for more information about this or our other training or online employee skills testing services.

About the Author - Mark Trowbridge, CPSM, C.P.M., MCIPS is one of Strategic Procurement Solutions founders. His 27 years in procurement leadership began in the Manufacturing, Airline, and Financial Services sectors...culminating in a role leading three-quarters of the strategic sourcing activities, and all of the contracts management responsibilities, of Bank of America (then, the USA's third most-profitable company). During his last two years with Bank of America, Mark's areas of responsiblities delivered a Quarter Billion Dollars in cost reductions. During the last dozen years, Mr. Trowbridge has worked in the consulting field with many leading corporate and governmental clients. His business travels have taken him throughout North America, Europe, the Middle East, Asia, and Malaysia. He is a frequent author on supply management topcs, with articles appearing in publications like Supply Chain Management Review, Inside Supply Management, eSide Supply Management, and Strategic Procurement Solutions' own Best Practices in Supply Management Journal. 

In a study performed by the Hackett Group a year ago, 63.9% of participating companies identified "Securing and Upgrading Talent" as a top challenge for their organizations. This challenge has continued to the present day, as corporate and governmental groups remain challenged to both find and keep highly-skilled procurement talent.

This article will discuss some talent management techniques which top supply management groups are utilizing to turbocharge their staff capabilities. As one of our clients once said, "It doesn't matter whether we have the most-advanced rocket ship in the world...if we don't have skilled astronauts to man the controls."

Talent Management Technique #1 - A Dynamic Staffing Model: Let's face it. Senior management is not allowing procurement groups to add staff. The "New Normal" is to do more with less. So creative groups are designing their capabilities around a core group of employees who can efficiently source and procure 80% - 90% of the organization's spending. Temporary staff, skilled project contractors, and consultants are being used to augment specialty sourcing projects and peak workload conditions. Although we're a boutique firm, Strategic Procurement Solutions has been selected by large client companies like BP, Intel, Johnson & Johnson, Volvo Trucks, Newmont Mining, Allianz Financial, Blue Cross Blue Shield, Delphi and others to both (i) recruit direct hire employees, and (ii) provide skilled project temporary staffing.

Talent Management Technique #2 - Assess Staff Skills: Studies performed by the Corporate Executive Board's Procurement Council and CAPS Research indicate that you must first assess staff-member skills before planning how to improve team talent. Three approaches to skills assessment are used by large companies. The first approach is a self-assessment survey, a technique often conducted by the big consulting firms for a hefty fee (this technique has each staff member subjectively evaluate their talent level, sometimes augmented by their manager's viewpoint.   A sample question might be, "On a 1 to 10 scale; evaluate your negotiation skills").   Obviously, this approach is quite subjective and is becoming less-popular.

A second approach is a behavioral assessment, such as that offered by some supply chain trade associations (this approach has each employee answer survey questions about how they handle different work circumstances. A sample question might be, "How many times have you led a reverse auction during the last month?"). The problem with this type of approach is that it must be customized to each person's position in order to be helpful. For example, if the employee is not involved in sourcing, they may not lead auctions as part of their responsibilities. Thus they would receive a low score on the sample question (even though they could actually have a good knowledge of auction techniques).

The third approach is that offered by Strategic Procurement Solutions to our clientele. We provide an Online Supply Management Skills Diagnostic™ which tests each person's knowledge of best practices related to 24 competencies needed by today's procurement professionals. Their individual scores are then applied to their unique position description to identify potential developmental opportunities. This approach is the most scientific of those presented, and many procurement leaders feel it provides the most tangible insights.

Talent Management Technique #3 - Train to Improve Talent: Based on the results of skills testing, a plan can be developed to improve the talent of staff members. Group training needs can be efficiently addressed by onsite training presentations from a training firm (typically, it is less costly to train onsite for groups of ten or more employees). Individual training needs (such as category-specific sourcing techniques) can be cost-effectively addressed through specialty trade event attendance or webinar training (up to 90 minutes in length). And overall personal development can be improved through earning professional certifications like MCIPS, CPSM, CSM, or CPCM.

Strategic Procurement Solutions presents some great onsite training programs to company and governmental groups, with recent presentations in North America, Europe, Asia, and the Middle East. We also perform preparatory training for CPSM and CSM certification exams. We've been privileged to have been selected to train clients like Apple, LG Electronics, Nationwide, Bristol-Myers Squibb, Coca-Cola, Intermountain Healthcare, State of Colorado, RH Donnelley, Canadian Government, State of Oregon, Colgate-Palmolive, Limited Brands, State of Massachusetts, and many others... More information can be requested at Info@StrategicProcurementSolutions.com

About the Author:  Robert Dunn, MBA, C.P.M. is one of Strategic Procurement Solutions' founders.  His 37 years in procurement leadership covered management positions in the Government, Technology and Financial Services sectors; culminating in a role directing all of BankAmerica Corporation's procurement operations.  He has served as President of two ISM/NAPM affiliates, and taught supply chain management at the post-graduate level for California State University - Hayward and St. Mary's College - San Francisco.  He has worked with major corporate and governmental clients in the consulting industry for the past 18 years.  Robert has worked on major procurement initiatives in North America, Latin America, Europe, and Asia.