Management consultancy has traditionally been about building strong relationships in the boardroom, with engagements being awarded based on the quality of solution and its potential benefits. Consultants have not always welcomed involvement of traditional procurement functions and their focus on detailed work specifications and costings.
However, BP is an example of a company that is changing the role of procurement, from a process-driven function to an advisory and relationship-driven role. The company uses 30 mainstream consultancies, as well as a number in niche areas with low spend.
“We are in the top 20 clients globally,” says Paul Alexander, procurement director for professional services. “We believe that we own our problems and their resolution and we buy consultancy services only where it offers BP specialist skills or independent views that it does not, and should not, possess in-house.”
BP believes in having a close relationship with the consultancies it uses and is focusing its time on building relationships with key suppliers that offer the best quality and value for money.
Traditionally, line managers engaged with consultants and then contacted procurement to follow up with the necessary paperwork. This has changed, with procurement now staffed by people experienced in relationship management that have an intimate understanding of the supplier market and the needs of their internal business clients.
“The more astute members of the consulting community are in and out of here all the time, including their senior partners,” says Mr Alexander. “They recognise that the procurement function has an increasingly influential role and it benefits them in the long run to work alongside us. We also act as a ‘critical friend’ of the [BP business unit].”
Procurement traditionally strives to create a level playing field for suppliers bidding for work. They carefully control communications and information to suppliers throughout the process and their conversations with line management.
“In business consulting you have an uneven playing field if some suppliers have a stronger relationship with a particular client than others,” explains Lisa Russell, procurement manager for business consulting. “We want to drive better relationships with key suppliers, so there is openness and honesty in discussion, not an arm’s length relationship. To create a level playing field we must encourage and open up discussions between suppliers and internal managers.”
The result is a much speedier tendering process, with BP going straight to consultancies that it knows are strong in a particular area. Given a clear brief, the procurement function can complete a tender in a few weeks.
The key criteria are quality of people and the quality of proposed solution and its price.
“Where we have a large number of global organisations able to provide similar services, the individuals we are working with truly differentiates them,” says Ms Russell. “People do business with people.”
Procurement has always been concerned with obtaining services at the right quality, using the right people at the right cost, but Mr Alexander says its new role is “bringing common sense, objectivity and discipline to a relationship-rich environment”.
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