Earlier this month, I presented strategic sourcing principles to a sales team. Needless to say, we had some interesting conversations!
One of the topics that was heavily discussed is backdoor selling. The team asked me if I thought that they should refrain from contacting someone within the organization who is not on the sourcing team when they are instructed in the RFP not to do so.
Of course, I suggested that they refrain from deviating from the procedures established by the sourcing team. After all, I’ve personally disqualified suppliers who were unwilling to play by the RFP rules.
When I said this, the executive VP stood up and reminded the team that my opinion was that of a sourcing professional and not of a sales person. He then stated that when they are “frozen out” from communicating with the buying organization – in other words, they are told to simply submit their proposals and are not given the opportunity to meet with the sourcing team – they always lose. But when they find a “white knight” within the buying organization, they are able to overcome being frozen out and often win.
This VP summed it up by saying: when there is a strict, arms-length RFP process and they are prevented from speaking with a person of influence within the organization, there is a nearly 100% chance that they will lose. When they speak with a white knight, they have a better chance of winning. In other words, they would rather lose because they violated the rules than lose without having had the opportunity to communicate with the buying organization.
Now, obviously, most of us know why procurement departments restrict communications within the organization: so that a fair sourcing process can be conducted and to protect confidential information. But has that led sourcing teams to go overboard in how they prevent dialogue? Personally, I’ve been on the sales side of sourcing initiatives where the seller is held at arms-length to such a degree that suppliers can’t even learn what the buying organization is really seeking.
In my opinion, strict sourcing does increase backdoor selling. That’s because some sourcing teams do not allow people of influence to be accessible through the front door. Then, if one supplier does break through the veritable communication fort that the buyer has erected, that supplier may have an advantage over those that have failed to do so.
I am not saying that we should go back to a free-for-all. But I do think sourcing teams should carefully consider facilitating access with influencers to all suppliers, of course ensuring that the procurement leader is present.
What do you think the solution is?
Be more strict? Or be more creative while also being fair?
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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