What is Procurement’s Role?

More than one speaker at Kennedy Information's Consulting Summit, which was held earlier this month in New York City, mentioned the emerging trend of the procurement department inserting itself into an organization's consultant acquisition process.

Formerly, the almost exclusive purview of CEOs and senior business unit leaders, the hiring of a consulting firm is beginning to involve the purchasing/procurement function at some organizations. Overall, this is good news; but with this nascent trend comes great opportunity as well as potential pitfalls.

The great opportunity is that procurement professionals will bring a thoughtful and rational rigor to the sourcing of consulting services. The potential pitfall is that some of these procurement professionals will simply focus their efforts on cost reduction at the expense of other just as important factors. Undoubtedly, cost is a big issue for any organization. It is made even more so by the reticence of some of the older and well-established strategy consulting firms to be more transparent in how their fees and charges are calculated.

But surveys by both Kennedy Information and Consulting Intelligence show that price alone is not the most important consideration of most clients.

Demonstrable experience and competence in: the consulting process, the type of industry and the type of issue to be addressed all typically rank higher when clients are asked what's really important in hiring a consultant.

The presence of the procurement professionals should be welcomed and can be of great service, provided they put in place processes to quantify and document relevant experience and competence. This will involve acquiring new skills to enable them to effectively assess experience and competence.

The one thing the procurement professionals can't do is dictate to their internal customers which firm – or team within a firm -- to use for a specific project . That decision must continue to be made by the responsible business unit executive.