Inside Supply Management Magazine

Making Complex Service Category Sourcing Work for You

May 31, 2018

It can be difficult to penetrate sourcing in some complex services areas due to perceptions, assumptions, traditions and the like, but persistence and stakeholder engagement are among the strategies that can help procurement become a trusted partner.

Mahmood Shah, director, global procurement operations, MetLife, and Suraj Prashad, assistant vice president, strategic insurance services, global procurement, MetLife, offered these thoughts during their presentation, “Breaking Through in New Complex Services Categories,” at ISM2018 earlier this month in Nashville, Tennessee:

What is a complex category? It’s a category such as legal and IT; these categories typically have highly specialized subject matter experts (SMEs).

What are the challenges of procurement’s involvement in sourcing such a category? Often, these SMEs say they don’t need procurement’s help because they — not procurement — have the expertise and have been sourcing the category for years. Additionally, they might assume that procurement is only concerned about saving money, with no other interest in the process.

Adding to the issue is that the category’s suppliers tend to have strong relationships with the stakeholders, who are often former consultants. It may seem like they’ve formed a special “club” that you’re not privy to. It can be an uphill battle to influence some stakeholders to let you participate in sourcing activities and have the opportunity to penetrate spend.

What are some strategies and best practices?

Meet resistance with persistence.

Don’t be discouraged by setbacks.

Build your knowledge so that you can better engage with stakeholders and suppliers. Keep in mind that it can take years to build a trusted adviser position.

Get the right people in place: The ideal complex category lead is a high performer, data junkie, good communicator, good listener and insider who is fearless and resilient.

Engage with stakeholders. Rather than always saying yes to their requirements, challenge assumptions and help them to better understand requirements. Learn where they are today — and what their goals are.

Use your stakeholders’ suppliers to your advantage.