Tuesday, November 25, 2014

Are You Employing Championship-Caliber Negotiation Preparation?

Is a lack of negotiation preparation setting you up for failure even before negotiations begin? If you want to achieve championship-caliber negotiation results, you have to become a championship-caliber negotiator.  And championship-caliber negotiators know that negotiation preparation is not optional; there are no shortcuts to negotiation success.

The adage "By failing to prepare, you are preparing to fail" is very true when it comes to negotiating. By not using the best negotiation preparation techniques, you could be leaving substantial value on the table at each and every negotiation.

But there is good news. You can learn the same negotiation preparation techniques that the best procurement negotiators use.

How? By taking the online Express Course "Championship-CaliberNegotiation Preparation," which was just launched today!

In this course, you will learn:

  • What championship-caliber negotiation is
  • The tasks of championship-caliber negotiation
  • The negotiation concept referred to as "Expanding The Pie"
  • The characteristics of championship-caliber negotiators
  • Tips for conducting negotiation research
  • How to envision the future supplier relationship in preparing to negotiate
  • How to avoid the negotiation risks of backdoor selling
  • How to establish your negotiation guideposts
  • And more

Sign up for "Championship-Caliber Negotiation Preparation" today for immediate access to the step-by-step guide to effectively preparing for all of your future negotiations.  You can take this single-lesson Express Course in about 30 to 60 minutes, whenever you want and as many times as you want to over a 30-day period.

How can you gain access to "Championship-Caliber Negotiation Preparation?"

Two ways:

  1. Enroll in just this Express Course, or
  2. Sign up for a Premium Membership in the NLPA and get access to this new Express Course PLUS 20 additional Express Courses and so much more!

BLACK FRIDAY SALE! Purchase an Annual Premium Membership on or before Black Friday, November 28, 2014, and save $10!

For $89.99 (US) you'll have all of the benefits of NLPA Premium Membership for one year.  Simply click on the link below and the discount will be applied automatically.

Take advantage of the typically less busy Black Friday work day (for most people anyway) and do something great for your procurement career.  Act soon, this offer expires on November 28, 2014.

If you'd prefer to enroll in "Championship-Caliber Negotiation Preparation" only, you can do so for $14.99 at:

Thank you for your interest in letting Next Level Purchasing Association help you have a rewarding career.

To Your Career Success,
Charles Dominick, SPSM, SPSM2, SPSM3
President & Chief Procurement Officer - Next Level Purchasing Association
Co-Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At

Monday, November 10, 2014

How Apple Balances Procurement & Marketing For Financial Success

I hope that you have enjoyed the article, "Why iPhone Cost Savings Matter Less."

In the article, I referred to my method of calculating additional profit from increased sales.  I'll cover that here.

Let me begin by talking about volume.  In press releases from September 2013 and September 2014, Apple reported that it sold nine million iPhone 5S's in the first three days of sales in 2013 and 10 million iPhone 6 and 6 Plus' in the first three days of sales in 2014.

So, that's 1,000,000 more phones sold in the first three days this year thanks, presumably, to the new characteristics of the phone, most notably the larger size.

According to Apple's latest annual report, it sold 169,219,000 iPhones in the last fiscal year for a total of $101,991,000,000.  Dividing the sales by the number of units, the revenue per phone sold is $603.

Multiplying 1,000,000 more units by the revenue per unit of $603 gives a value of increased revenue of $603,000,000.

In the last fiscal year, Apple posted $53,483,000,000 "income before provision for income taxes" (otherwise known as Earnings Before Taxes or EBT) against revenue of $182,795,000,000.  Dividing EBT by revenue gives you a pre-tax profit margin of 29%.

Multiplying the pre-tax profit margin of 29% by the increased revenue of $603,000,000 gives you an additional $175 million in pre-tax profit.

To return to the article, click here.

If number crunching and financial statement analysis like this baffles you, consider enrolling in the online courses "Finance For Strategic Procurement, Part I" and "Finance For Strategic Procurement, Part II."

To Your Career Success,
Charles Dominick, SPSM, SPSM2, SPSM3
President & Chief Procurement Officer - Next Level Purchasing Association
Co-Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At

Tuesday, November 04, 2014

What Makes One Procurement Certification A Better Choice Than Another? Hint: It's Not Just One Thing!

Imagine this conversation...

Sarah Carbuyer:  "What is the best vehicle available?"

Johnny Expert:  "A Ford F-150."

Sarah Carbuyer:  "Why?"

Johnny Expert:  "Most people I know are familiar with the Ford F-150."

Sarah Carbuyer:  "OK, I'll go buy a Ford F-150."

How does this make you feel about these two people?

Is Johnny's recommendation a little short-sighted?

Is Sarah a little too easily influenced?

How about yes and yes!

So, what would be the correct answer to Sarah's question?

Is there one?

Yes.  The correct answer is:  "It depends."

The best vehicle for Sarah depends on her circumstances.

Does she need to park in tight spaces?

Does she need to drive around five kids?

How much of a priority is fuel efficiency?

And what if the number of people who are familiar with a vehicle model does matter to Sarah but she lives in Japan where Toyota is a more "recognized" name than Ford?

How helpful is Johnny's advice now?

See, there are a lot of things that Sarah needs to consider to find the best fit for her.  But people like Johnny dole out advice based on one factor and one factor alone.  And that's not always helpful.

There are a lot of factors to consider.  And there are a lot of great options available.

Unfortunately, the same thing happens on social media with procurement certifications.  Someone will ask for a recommendation and someone else will chime in with one and only one recommendation based on his/her situation, not the situation of the person asking.  And while intentions are good, it's not necessarily as helpful as it could be for the person seeking advice.

In the procurement profession, we are fortunate to have a choice of certifications.  If one certification was right for everyone, there would be no need for any others.  But different certifications have different advantages.  And that's why just like multiple vehicle models exist, multiple procurement certifications exist.  Heck, there are plenty of ambitious procurement professionals out there who have certifications from multiple providers.  Procurement certifications are not mutually exclusive and it only helps a procurement professional to be more competitive in the job market if they achieve as many credentials as practical for him/her.

It is important for someone seeking a procurement certification to consider more than one factor when choosing a certification.  If someone selects a certification just because it is one that they are familiar with before doing any research, what does that say about their procurement skills?  After all, isn't it a core competency of procurement to thoroughly research a market and identify the option that is the best fit for the organization?  Why should anyone apply a lesser standard to the selection of their own certification?  After all, earning and maintaining a procurement certification requires a multi-year commitment and an investment of money.

So, my advice for anyone asking a question like "What is the best procurement certification available?" is to look at multiple options to determine which is the best fit for your personal circumstances. 

Even though I am the founder of a procurement certification provider, I wanted to keep this post provider-agnostic so that the thought process could be applied to any certification.  You can stop reading now and walk away with some good, objective insights if you have an allergy to the slightest bit of bias.

However, if you do want to better understand 14 factors to consider when comparing procurement certification options, here is a link to a whitepaper that the NLPA published - http://goo.gl/M9lQKo.

To Your Career Success,
Charles Dominick, SPSM, SPSM2, SPSM3
President & Chief Procurement Officer - Next Level Purchasing Association
Co-Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At

Monday, November 03, 2014

Are You Making This Expensive Procurement Mistake?

Several years ago, I actually looked at one of our homeowner’s insurance bills and found our provider increased our rates significantly beyond our initial rate.  So, I went out and found better coverage and a much better rate with an alternate provider.

Then, the other day, my new homeowner’s insurance bill arrived in the mail.  “Ugh”, I thought, another envelope I’ll let my wife take care of.  Then, I heard her ask me if I was interested in taking a look at it.

With a lack of enthusiasm and sincerity, I said, “sure, why not”.  To my shock and horror, the bottom line struck me like a kick to the gut…a whopping 40% increase!  For once, I was actually glad to get a paper cut! 

In less than an hour, I had a new homeowner’s policy through another provider that was 20% less than my previous year’s rate. Celebrating my victory I added the savings to our vacation money jar!

So the question I have for you is simply, “when is the last time you looked at what your suppliers are charging you for goods and services that are typically overlooked”?

Think about it, even if you are utilizing many of the procurement best practices and are taking the time strategically negotiating large deals, there are goods and services purchased that are potentially falling under the radar.
Andrew, your long-forgotten supplier, certainly isn't going to call and say, “Jacob, you are spending 15% more for paper supplies than you have to, let me offer you better pricing”!  Andrew is glad to never hear from you and may even try to slip in additional price increases without your knowledge.  Jacob, it is time to go to battle with Andrew!

Now, it doesn't have to be a battle of cinematic proportions, rather, it can be a “win-win” for both organizations!

Remember, the last number a supplier wants to see showing up on his or her phone is from a buyer who buys in large quantities, pays their bills on time and never asks any questions. 

Before contacting your supplier, make sure you are well-prepared with a list of open-ended questions to ask your supplier regarding terms, pricing and possible solutions that are satisfactory to both parties. 

For example, asking a question like, “can you do better on the price of paper supplies?”, can easily be dismissed with a simple “no”.
Whereas, saying, “Andrew, we have had a great relationship with FineView Industries for years, but I recently noticed that the price of paper products is much, much higher than your competitors, what can you do to help us both out?” 

In this scenario, you are asking an open-ended question that requires a thoughtful answer.  You are subtly implying that even though you like FineView Industries, you are very much aware of their competitors without making a direct threat to take your business elsewhere.  Also, by positioning the question with the wording “help us both out”, you are letting the supplier know you are willing to achieve a “win-win” result. 

Of course, you will want to utilize your contract-writing skills as well, making sure you have the newly agreed upon terms in writing.  Just make sure your supplier isn't hiding any pricing or terms behind fancy jargon.

Once you have hashed out the details and negotiated agreeable terms, make sure to let your supplier know you will keep in touch.  This is a good way to keep your supplier relationship strong and helps to keep you as a top of mind buyer for your supplier.  

Greg Uhrlen
Marketing Manager
Next Level Purchasing Association
1315 Coraopolis Heights Rd, Suite 1001
Moon Township, PA 15108
Phone: 1-412-262-1334

Friday, October 31, 2014

SourceDogg Takes a Bite Out of eProcurement Marketplace

Ambitious and aggressive are certainly words that can be used to a new player in the eProcurement market in the United States.  Founded in 2009 and based out of Galway, Ireland, SourceDogg is an ISO9001 certified provider of eProcurement software solutions aimed typically at small to mid-sized businesses.  Thanks to strong sales and funding from Nucleus VP Group, SourceDogg has been able to increase the size of their team from 20 to 90 in the past two years. 

According to Alan Phelan, CEO of SourceDogg, in an interview with the Irish Examiner, “Our solution is a cloud-based eSourcing platform which is hosted on Microsoft’s Windows Azure cloud computing platform, which provides us access to data centers in multiple countries and unlimited processing power for our customer.” 

Since SourceDogg is cloud-based and doesn’t require additional hardware, it could be an appealing solution for those organizations who do not want to incur additional IT maintenance and management expenses.  On average, it takes 3 to 4 weeks for implementation of the SourceDogg eProcurement system.

SourceDogg has a live chat feature available at all times which works as an online help function for users having difficulty within the system.  This functionality is available to both buyers and vendors and stands out as a rather useful feature for those with minimal experience within the system.

In addition to possessing a Windows 8 look and feel, SourceDogg has a very clean, easy to follow user interface (UI).  In addition, like other user-conscious eProcurement systems, it has a right sidebar to keep track of where you are at all times while in the e-Request creation process.

Creating an e-Request is very intuitive.  When creating an e-Request you can easily attach files, which is a relatively new feature to the system.  SourceDogg also contains a failsafe approval system which ensures that only e-Requests with a set, indicated level of approval can be published to thus avoid maverick spending.

With SourceDogg it is possible for users to clone any e-Request that has been created, except for one that has been deleted.  A cloned e-Request is then created and set into a draft state.  All data relevant to the prior e-Request is cloned and it is available in just a couple of clicks which makes it extremely handy for e-Requests that need to be created frequently. 

SourceDogg offers a supplier settings profile that integrates with LinkedIn, allowing for particular contacts at supplier to show up in the profile area making it much easier to be aware of your particular supplier’s personnel who work with your account.
When looking to choose a supplier, you can add weighted fields to further evaluate and compare suppliers against your specific criteria and each other. You can then save these weighted questions to a library where you can recall specific questions for other suppliers going forward without having to repopulate the fields manually.

Any supplier can come on board free of charge with SourceDogg, thus reducing the time needed to submit a quote or proposal.  As a buyer, you have the choice to choose from you own approved suppliers or invite a list of registered SourceDogg approved suppliers to participate in your sourcing events within their own private email system.  All global currencies are available based on the location of the particular supplier. 

There is also a supplier tagging feature available where you can add your own tags to suppliers (to narrow searches) or use SourceDogg generated tags as well to specify particular features a supplier offers. Punchout catalogs will be introduced in the next updated release of SourceDogg in November 2014.

There is a Q&A message board available in real-time between buyers and suppliers. The message board shows all suppliers, but not by their actual name that other suppliers can see.  Here, you can also easily monitor a supplier submission status. Due to strong demand from their clients, a recently added feature here is the ability to attach a file in the message board area.

Within SourceDogg you can award supplier contracts as well as decline supplier offers with the ability to indicate why the supplier has not been chosen at the present time.   In this area, there is also the ability to store and manage contracts in an online filing cabinet for future referrals.

Reports available within SourceDogg regarding vendors offer such features as the percentages and numbers of successes and failures indicated by each individual supplier.  Reports are available for export in Excel and PDF formats.

As of this time, there are no mobile apps available for SourceDogg, but the system works with all desktop, mobile and tablet versions of the available major browsers.  Going forward, SourceDogg will be offering reverse auction capabilities within the system starting in Q1 of 2015.

SourceDogg’s largest volumes of customers are presently in the areas of manufacturing, construction hotels and hospitals.  They have recently expanded their business reach into India and are currently looking to expand their reach further into the United States.

Greg Uhrlen
Marketing Manager
Next Level Purchasing Association
1315 Coraopolis Heights Rd, Suite 1001
Moon Township, PA 15108
Phone: 1-412-262-1334

Risk Mitigation In Any Industry

The Next Level Purchasing Association welcomes this guest post from Heather Grossmuller from Source One Management Services.

When it comes to third-party vendors, there is no one-stop solution to mitigating risks. However, there are some key elements that could play a vital role in managing risks more effectively. Take for example Target and Lowes. Both are reeling from data breaches due to a lack of third party security protocols. These breaches did immeasurable damage, yet could have avoided by integrating two very import risk mitigating tactics -- a comprehensive Service-Level Agreement (SLA) and SRM (supplier relationship management) Program. 

According to TechTarget.com, SLAs are negotiable instruments that reflect the company’s appetite or tolerance for risk; its size and complexity, geographic distribution, type of information managed, as well as the ability to effectively monitor the third-party management program. In the case of Sony’s PlayStation Network producing one of the worst data breaches of the 21st century in April 2011, a thorough SLA could have included a third-party data breach violation penalty which could have offset the millions lost while the site was down for a month. In order to most completely address risk in an SLA, the following should be considered: security and privacy of information, safety and risk analysis, compliance obligation scope, enforcement structure, internal audit accessibility and disclosure requirements, and corrupt practices management.

Since trust in suppliers alone cannot prevent scandal or potential risk, an in-depth SLA is a critical component to risk mitigation along with an all-encompassing supplier relationship management program. Through monitoring a supplier’s operations, a company has the potential to be confronted of compliance issues early on, before a widespread scandal can occur. In this sort of relationship, although a supplier may not be a direct component of a company, an organization would be held accountable as though a third-party association was a direct employee in certain industries. To prevent an outside party from causing widespread scandal and damaging brand reputation, it is crucial to have control mechanisms in place. 

Through establishing a common set of procedures for interacting with suppliers, an SRM program opens communications and enhances the way companies work together. With this enhanced visibility into supplier operations, there is less threat of an incident causing lost sales or hardship because the company would institute structure to their roles that would be continually monitored and assumingly accident-proof. 

Whichever the method of risk mitigation, it is essential to prepare for any disturbance to business whether through proper SLA preparation or an in-depth SRM program. The consequences of negligence can be ground-breaking and are—in many industry leaders’ opinions—worth the investment. 

Heather Grossmuller is a Marketing Manager at Source One Management Services, LLC, a Philadelphia Business Journal “People on the Move” Recognition Recipient, an advisory board representative of La Salle University’s Association of Women MBAs, and all-around marketing enthusiast. As Marketing Manager, she oversees Source One’s efforts in internal/external communications ranging from social media management to recruitment.

Sources Referenced: