Last week, I traveled to New Jersey to deliver a seminar for a client. While the seminar itself produced some blogworthy nuggets that you’ll be hearing about soon, today I’m going to share a little story about my limo ride from the hotel back to the airport.
(And, if you’re curious, the client was the one who insisted on getting me and paying for a limo. If it was up to me and my sense of thriftiness, a cab would have done just fine.)
As an entrepreneur, I can’t help but to engage in dialog with small business owners when the opportunity arises. As someone who has dedicated the last decade-and-a-half or so to the procurement profession, I can’t help but see the procurement implications in most business discussions.
Such was the case on this ride. I started asking the limo driver – who also happened to be the owner of the limo company – about how business was going. He confirmed my stated belief that a recession is a time when luxury services suffer.
In a very interesting portion of our conversation, he said “Things are so bad, even my corporate clients ask my price before booking me now!”
Think about that for a second…for a luxury-priced service, some employees – stewards of their companies’ money, if you will – were not in the habit of even asking a price before agreeing to spend money that isn’t theirs.
A little ridiculous, eh?
I think so. And I think that it is a procurement department’s duty to instill some sort of evaluation process for decentralized purchases, even if the particular category or transaction is not part of Procurement’s responsibility.
That doesn’t mean having every decentralized buyer be educated in advanced negotiation tactics. It may just mean distributing instructions like: always ask for a price, always compare at least two available prices, and determine whether there is an acceptable probability of the supplier performing satisfactorily.
The basic premise of asking for a price shouldn’t be something that is just done during difficult economic times. It, and other basic buying skills, should be ingrained in the process used by every individual who spends company money.
It is up to Procurement to drive that education through the organization.
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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