In a recent post, Spend Matters addressed a significant issue: handling supplier selection advice from a third party. In that post, editor Jason Busch cautions those in buying roles to be wary of such advice because it may be covertly driven by some type of revenue-sharing arrangement between the advisor and the recommended supplier.<\/p>\n
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Jason writes that \u201cthe onus should be on procurement organizations to ensure that they are representing their organization\u2019s best spending interests by [investigating] any potential conflicts of interest among those influencing \u2014 or facilitating \u2014 a decision on their behalf.\u201d I agree.<\/p>\n
When advised to select a supplier, Jason suggests asking the advisor questions such as:<\/p>\n
In other words, find out how the advisor and his\/her organization would benefit if you selected a supplier based on the advisor\u2019s recommendation.<\/p>\n
I feel that this post is one of the most useful ever on Spend Matters and should be bookmarked by every procurement professional. Stay in procurement long enough and you will confront this situation.<\/p>\n
However, I also believe that questioning advisors who recommend doing business with certain suppliers is only half of the vigilance that you should employ. The other half is questioning suppliers who recommend against doing business with a supplier.<\/p>\n
In those situations, you can ask:<\/p>\n
In my time, I\u2019ve seen crazy situations such as one in which a buyer who knew his market quite well was recommending doing business with a well-known supplier in that market and presented that recommendation to management. Management \u2013 who knew nothing about that market, which is why they have buyers with such expertise \u2013 asked an advisor about the supplier. The advisor, who really didn\u2019t know the market yet didn\u2019t want to admit his abject ignorance to a client seeking advice, told management not to do business with that supplier because the advisor had never heard of the supplier. Management listened. And ended up spending more on an inferior service. All because it listened to an advisor that knew nothing instead of a buyer who knew a lot.<\/p>\n
My additional advice about supplier selection advice:<\/p>\n
In a recent post, Spend Matters addressed a significant issue: […]<\/p>\n","protected":false},"author":12,"featured_media":4040,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2989","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-procurement"],"yoast_head":"\n