Tuesday, January 29, 2013

Comparing Online Procurement Training Providers, Part II: Cost Per Hour

I'm back for Part II of this series designed to help procurement leaders identify the critical differences between online procurement training providers.  In Part I, I covered how to evaluate the differences in quality between online procurement training providers.  In this Part II, I will cover the concept of "cost per hour" as it relates to online procurement training.

To reiterate a point I made in Part I, online procurement training is not a commodity.  You can't just look at the title of an offering and a price and think you know whether it is more or less attractive or a better or worse deal than a competing offering.  Let me show you an example...

I am perusing a course catalog from one of the providers in the space.  This provider offers an online course entitled "Optimum Quality:  Quality Improvement Methods."  Good title, right?  OK, so what's the cost?  It's $189.  Sounds affordable, right?  Should you go for it?

Well, with online training, it is important to know how much education you are getting for your purchase.  Often, providers express the length of their online courses in terms of Continuing Education Hours, or CEH's.  The number of CEH's represents the approximate time, in hours, that it will take the average person to complete the course.

So, for this particular course, I see that it is 2 CEH's.  So, those that would enroll in this course would be paying $189 for 2 hours of training, or about $95 per hour.

Let's do a comparison.

I'm on a competing provider's website and found a course entitled "Improving Quality in the Supply Chain."  Looking at nothing other than the title and being familiar with the providers, it sounds like it would cover similar subject matter.  So, now let's take a look at the cost...

I see that "Improving Quality in the Supply Chain" offers 8 CEH's.  The cost is $229.  That seems more expensive.  However, it is actually less expensive on a cost-per-hour basis.

Those that enroll in this course would be paying $229 for 8 hours of training, or about $29 per hour.

So, from a pure cost standpoint, the second course would be a better value at $29 per hour than the first course, which runs $95 per hour.

Of course, that's not enough information to make a decision.  You need to consider the quality of the courses as described in Part I and the other factors we are going to discuss in future installments of this series.

Stay tuned!

Disclosure:  I am the founder of an organization that offers online procurement training.  However, in this series, I will not mention the name of my company nor the names of any competitors.  I will keep this totally general and vendor-agnostic so that you can get the benefit of one perspective on evaluating online procurement training without getting a sales pitch touting a specific provider.
To Your Career,
Charles Dominick, SPSM, SPSM2
President & Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com


Monday, January 28, 2013

Comparing Online Procurement Training Providers, Part I: Quality

In procurement, some categories of goods and services are easy to compare.  What you get from one supplier may not be much different than what you'd get from another supplier.  In those types of categories, your results will be similar, regardless of which product, service or supplier you choose.  You almost can't lose.

Other categories are characterized by more differentiation between suppliers.  Quality, speed, cost, service, innovation, and social responsibility can vary tremendously between suppliers.  And the business results you can reap from your purchase of those categories will vary as well.

Online procurement training is one of the latter categories with significant differences between suppliers.  Because it is a category that procurement leaders only buy once every few years, most procurement leaders do not know where to start in trying to understand what those differences are.  This series is here to help you identify all of the various factors that you should evaluate when making online procurement training decisions.

The first factor that we'll cover is Quality...

Think about some of the people that you know who have negotiation as one of their job responsibilities.  Chances are, most of them would individually claim to be a good negotiator, right?

But are each of those negotiators equally as good?

Probably not.  And I bet you can identify two of those negotiators that are the furthest apart:  one who really is good and one who only thinks he is good.  Again, though, both of them will say that they are good negotiators.

Such is the case with negotiation training.  Some of the offerings will be great and really teach your procurement staff some useful tactics and techniques, and some of them...well, won't.

For example, I am looking at negotiation training material from two providers as a type this.  Both suggest using open-ended questions in a negotiation.  However, one provider includes a multitude of examples of such questions.  The other does not.  Which of the two would you consider to be higher quality negotiation training material?

While this one example may seem trivial, imagine eight hours of training where one provider offers no examples and the other offers plenty of examples.  You can imagine that, if there were two students each participating in this training with a different provider, there will be quite a difference in the post-training performance of those two students!

The bottom line is that quality must be part of your evaluation of online procurement training options.  There are many ways to assess quality ranging from reviewing public one-to-five-star ratings to actually getting to sample the material itself.

Never assume that because two providers offer training on the same topic that your team will receive equal benefit regardless of the supplier.

Stay tuned to this series as I cover more ways you should be comparing online procurement training providers.

Disclosure:  I am the founder of an organization that offers online procurement training.  However, in this series, I will not mention the name of my company nor the names of any competitors.  I will keep this totally general and vendor-agnostic so that you can get the benefit of one perspective on evaluating online procurement training without getting a sales pitch touting a specific provider.

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

Friday, January 25, 2013

How To Stop Maverick Buying

I hope that you enjoyed the article "Maverick Buying:  6 Steps For Stopping It."

In the article, I only had space for four of the six steps.  So here are the other two!

Step #5:  Monitor spend and take corrective action.  It would be nice if all you had to do was to put in rules and they would be followed.  Unfortunately, that's not how the world works.  That's why there are security guards, police, referees, prefects of discipline, and others in enforcement roles.  You have to watch for unauthorized purchasing and then approach the offenders.  Doing so may reveal weaknesses in policies, procedures, or communication or, on the other extreme, it may reveal individuals who have less-than-noble intentions.

Step #6:  “Outbuy” internal customers.  As explained in PurchTips Edition #264, some internal customers will think that they can perform purchasing activities better than you.  When you’ve demonstrated that you’ve made the best purchasing decisions on behalf of the company, compliance will be at least a little easier.

So, as you can see, there is no single "magic bullet" for stopping maverick buying.  It requires a multi-dimensional plan.  But the good news is that it can be stopped.  And I hope that this post and the article helps to give you the structure you need to eradicate maverick buying from your organization.

If you linked to this post from the article, you can click here to return to it.

To Your Career,
Charles Dominick, SPSM, SPSM2
President and Chief Procurement Officer - Next Level Purchasing Association
Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com

Thursday, January 24, 2013

How Procurement Professionals Can Win Over Reluctant Internal Customers, Part II

 Last month, I published Part I of this post.  In Part I, I said that "it takes at least two very important things to convince [reluctant internal customers] to let the procurement department get involved" in their areas of spend:  benefits and proof.

In Part I, I talked about the first item, benefits.  In this Part II, I'll talk about proof.

If there is one truism in internal customer relations, it is this:  internal customers think that the procurement department can only screw up their operations by getting involved.

Sorry if that is a bit frank, but that is the perspective of a great many internal customers of procurement departments.  By communicating the benefits specific to internal customers of allowing procurement department involvement, you may begin to change internal customers' perception, but it takes more than that.

It takes proof.

Proof that you won't screw up their operations.

So, how can you prove that?

Well, it's best if you have a well-documented track record of your success of not only succeeding at applying procurement best practices to a new area of spend, but also not screwing up the operations of the stakeholders of that area of spend.  You want to be able to demonstrate that you've worked with other internal customers with the same concerns and, ultimately, they ended up being glad that they trusted you because their world is so much better now that you entered it.

After reading Part I, you know the benefits of procurement involvement in the eyes of the internal customer, now you need to document real-world examples of how you actually brought those benefits to other internal customers.  Imagine an internal customer writing this:

"I really thought that we had our operations down to a science, so I was very tentative towards the idea of the procurement department coming in and changing things that, to me, appeared to be running smoothly.  But, my fears were unfounded.  The procurement department was very sensitive to my concerns.   They made sure that our key processes were not disrupted.  Then, they did the unexpected:  they relieved us of some of the most time-consuming parts of our jobs that aren't core to what our department does, they made our lives easier by setting us up with suppliers who don't give us headaches, and they saved our department budget money that can be deployed on some other things that we have been hoping to do.  I never thought that I'd say this, but I am so glad that we teamed up with the procurement department!"

Think about how that could help you break down the barriers to working with a reluctant internal customer.  Well, testimonials like this are part of the "proof" that I talk about you needing in order to get cooperation.

Have you made the connection?  That using a testimonial like this is something a new supplier would do in an effort to win a contract award from you?

If you have, that's good!  Because this proof thing requires that you think like a supplier's marketing department.

What else does a supplier's marketing department do in an effort to persuade you to choose that supplier over a competitor?

There are definitely some techniques that can be adapted to what I'll call procurement department marketing.  I'll discuss a few of these principles now...

One of the things you may have thought of is providing references.  If you've been in procurement any decent amount of time, I'm sure you asked suppliers to provide references to give you some assurance that their promises are more than mere puffery.

You can use references to sell the procurement department's "services," too!

Who in the organization can a reluctant internal customer call to receive assurance that the procurement department can really help them in the manner promised?  Those are the people you need to build strong relationships with so that you can have them go to bat for you when another internal customer has an aversion to working with you.

There are plenty more examples of these type of supplier marketing tactics that you can adapt to marketing your procurement department - and I encourage you to think of more - but I'll leave you with one final aspect of proof that you need to have in your arsenal.

That aspect of proof is what I call a "portfolio of examples."

A portfolio of examples is a collection of documents that demonstrate your success stories with helping internal customers through your procurement work.  Sure, it should include information about meeting or exceeding classic procurement goals like cost savings but, ideally, it should provide plenty of examples of how you helped internal customers with the things that are most important to them.

Testimonials, references, and a portfolio of examples.  These things comprise the type of proof that you need to convince internal customers to allow you to get involved.

If you don't have this proof already, don't worry...you have to start somewhere.  So, go delight those internal customers, build great relationships, and document your success.

Before you know it, internal customers may beat you to the punch and ask you to get involved in their spend even before you identify the opportunity to approach them!

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


Wednesday, January 23, 2013

Free Procurement & Corporate Culture Webinar This Tuesday!

Why do the best planned and most well intentioned of purchasing initiatives fail to execute? What are the root causes behind the veneer of unsuccessful procurement plans?
In the webinar "Aligning Procurement Initiatives to Company Culture," you will learn that the culture of the department or business as a whole plays a significant role in determining the fate of your purchasing strategies. You will learn:
1. The different types of cultures
2. How to distinguish between various corporate priorities 
3. How to align purchasing objectives to the culture 
4. How to troubleshoot for success.
The presenter for this webinar will be Tim Reis, SPSM, a procurement manager with 10 years of experience and a regular columnist for Leading-Edge Supply Management magazine.
This webinar will be held on Tuesday January 29 at 11:30AM Eastern US time.  This webinar is free to all members of the NLPA and membership in the NLPA itself is free and instant.

Here's how to register for the webinar:

If you're already an NLPA member: Go to http://www.NextLevelPurchasing.com/login.html, log into the members' area, and navigate to the "Webinars" tab. There you'll find a registration link, be sure to enter a valid email address as attendance details will be sent to you by email.

If you're not yet an NLPA member: Sign up for your free membership in the Next Level Purchasing Association at http://www.nextlevelpurchasing.com/procurement-association.php?pcb. After doing so, you'll receive an email with information about how to log in. After logging in, navigate to the "Webinars" tab. There you'll find a registration link, be sure to enter a valid email address as attendance details will be sent to you by email.

Registration is free but may be limited, so sign up soon to ensure access to this event. I hope that you will join me for this exciting webinar!

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

Tuesday, January 15, 2013

Is There Such A Title As "Purchasing Psychologist?"

I hope that you have enjoyed the article "Managing IT & Complex Category Purchasing."

One of the prescribed practices for getting complex category purchasing under control that was shared in the article was "Consolidate Ordering Methods."  In describing this practice, I suggested that you "Provide your internal customers with a process where the standardized products and contracted suppliers are part of the first and easiest method of their product research."

This implies something.

This implies that you know - or will learn - how your internal customers conduct their product research.  You need to truly understand what drives their behavior if you want to change it.  You need to be curious. 

Understanding internal customer's product research can begin by asking variations on the basic questions:  when, who, why, and how.

When?:  When is the very first moment when your internal customers determine that a product will be needed?  Hint:  It is not when the requisition is created and probably even happens well before the budget for the current year is approved in some cases.

Who?:  Which individuals are involved in determining that a product is needed?  Is it one person?  Is product identification delegated to someone?  Is a team involved?  Are there approvers of product choices?

Why?:  Why is the need for a product purchase determined?  What factors drive that decision?  Is it something like a new project?  Is it a new problem that needs to be solved?  Is it to take advantage of an opportunity that someone identified?  Is it simply to use budget that will be lost if not spent (it happens!)?

How?:  How do internal customers conduct research on determining a product that will fit the need?  Do they contact the first supplier they know who provides such products?  Do they go on the web?  Do they consult your internal purchasing system for standard items?

Once you know these things, you can start figuring out what you need to do to change behavior.  If it sounds like you're being a psychologist, well...you kind of are!  Maybe some day "purchasing psychologist" will be a job title!

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


Thursday, January 03, 2013

A Procurement Transformation Isn't Complete If...

I hope that you have enjoyed the article "True Procurement Transformations, Part II."

In my last blog commentary on this Procurement Transformation series, I differentiated between procurement transformations and procurement tweaking.  That got me thinking about an experience I had a little over a year ago.

Just as my book, "The Procurement Game Plan:  Winning Strategies and Techniques for Supply Management Professionals," was about to be published, we sought thought leaders to preview the book and provide testimonials to be printed on the back cover.  We had some wonderful people contribute!

However, there was one person whose feedback we couldn't use.  Don't get me wrong, she gave great feedback.  But there was one sentence in her testimonial that said something like "there are some concepts covered in this book that are a little basic."

I don't deny that the book covers a few fundamental processes that every procurement department should employ.  However, I felt that these fundamental processes should absolutely be included.

Why?

Because, despite their foundational nature, there are a great many procurement departments out there that have not employed them, and aren't performing optimally as a result!  What's ironic is that this person giving the feedback hadn't even implemented all of the very processes that she was dubbing basic!

So, don't tell me that you've completed a procurement transformation if you really haven't.  In my mind, a procurement transformation isn't complete if you don't have all of the fundamentals implemented, regardless of how advanced some of your processes are.

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

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