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Why consultants need to learn the language of procurement
Consultants have always had what could euphemistically be described as an “interesting” relationship with their clients’ procurement teams. In theory, the types of large organisations that regularly purchase consulting services have long had to abide by robust sets of procurement rules when selecting a firm to buy from—the same as for any other product or service category. But, in practice, these rules have generally played second-fiddle to the whims of senior stakeholders (outside of the public sector, at least). If there’s a specific partner at, say, McKinsey whom the COO knows and trusts and wants to work with, it’s unlikely that the procurement team is going to step in and try to ensure a genuinely competitive tender process takes place.
So, when it comes to consulting projects, procurement teams have often been treated more as rubber stamps than as active participants in the buying cycle. Earlier this year, we surveyed 50 procurement managers in large, US-based organisations; on average, these procurement managers estimated that their teams had “meaningful involvement” in only 45% of their organisations’ purchasing decisions for consulting services.
In the early days of the pandemic, it looked like that already limited role was going to get diluted even further: Needing to make purchasing decisions at record pace in order to respond effectively to the rapidly changing set of challenges thrown up by COVID, many clients elected to work around their organisations’ longstanding processes and cut their procurement managers out of the picture. Our research, for example, found that 77% of businesses suspended at least a portion of their standard procurement rules due to the pandemic.
Now, however, the situation looks very different. For the most part, rules and guidelines that were suspended in 2020 have been reinstated. And many procurement managers report that they now feel more involved in the buying of consulting services than they did prior to the pandemic. While some businesses will no doubt continue to treat their procurement teams as an afterthought, others may start to invest their procurement specialists with a greater degree of authority and responsibility as a way of ensuring that costs are kept under control during the post-pandemic recovery. There is ample evidence to suggest that companies with comparatively mature procurement functions have tended to recover more quickly from previous crises. Ambitious procurement managers will use that fact to argue that now is the time to give their business units a proper seat at the table—especially when it comes to service categories like consulting, where their role has historically been at its most limited.
Consultants, therefore, will need to prepare for a world in which a non-zero number of the organisations they sell to start to use their procurement functions in a very different way; one in which procurement teams are no longer brought in solely at the end of the buying cycle to carry out due diligence and finalise contract details, but in which procurement specialists are instead actively consulted during the initial framing and scoping of an engagement and at every stage of vendor selection. If you’re a partner at a consulting firm, don’t be surprised if you find yourself talking directly to procurement specialists more often than you used to over the next few years.
And if you want to make sure those conversations go as smoothly as possible, you’ll need to start paying more attention to the specific interests and priorities of procurement managers—and how these differ from those of end users. Our research suggests, unsurprisingly, that cost is the most important factor for procurement teams when choosing a firm to recommend their organisation purchases from: When evaluating potential delivery partners for a consulting project, procurement managers want to know exactly what steps each firm would take in order to prevent budgetary overrun.
But cost isn’t the only thing that procurement managers care about. More and more organisations have started to charge their procurement teams with “greening” their supplier bases; so, showing off your firm’s ESG commitments can be a powerful way of getting procurement managers on-side. And many of them have started to incorporate explicitly COVID-related questions into their interrogations of suppliers, asking consulting firms both about how they “did their part” during the worst phases of the crisis, and about how they intend to protect the health of project team members during the engagement. Having well-rehearsed answers to these types of questions is sure to go a long way towards enabling your firm to continue winning bids in a world of newly empowered and emboldened procurement functions.