What do 400+ consulting clients have to say about procurement?

Not much.

As I mentioned earlier in the week, we’ve spent the last few months talking to more than 400 senior executives who use consulting services on a regular basis.  Almost all work in big organisations most of which have preferred supplier lists which should – in theory – govern their choice of consultants.  In practice we found that preferred supplier lists matter when one or more of the following conditions apply:

• The project involves either a huge amount of work across multiple countries or using consultants to substitute for full-time employees.
• It relates either to technology, process improvement and/or regulation or to the use of consultants as “contingent labour”.
• It’s being bought by a middle-ranking executives (these, it seems take procurement rules seriously than their more senior counterparts).

The more senior the person, the more specialised their need, the less likely they are to use – or even expect to have to use – a “preferred supplier”.  Most people at this level think that the role of procurement is to negotiate the contract and bring the price down as much as possible, but not to interfere with the choice of firm.  As one person summed up the situation, “If I have a standard set of requirements then it makes sense to use a firm from our preferred supplier list, but, if I’m looking for a specialist, then I’m the best judge of who to use.”

It’s not a surprising attitude: procurement procedures designed to standardise the buying process inevitably work best with standardised services; procurement people often move too quickly between categories so it’s hard for them to build up anything like the market knowledge their internal clients have.  But does it matter?  It certainly re-iterates a point we made recently about there being a glass ceiling in consulting procurement.  At the same time, it also confirms and legitimises the role procurement teams play in several important and financially significant areas.  The contribution of procurement managers may be narrower than they would like, but it’s also more accepted than most feared.