How Do You Know If You Need Procurement Consulting?

No matter how good you are at your job, there comes the point where you have to wonder if outside perspective could help. After all, you’re only human.

But how can you be sure if procurement consulting will actually solve your problem, or make your job easier? What if the consultant makes you look like you don’t know what you’re doing? How much can you expect to pay them?

If you’re interested in procurement consulting but are struggling with these questions, keep reading, this post is for you.


Do I Need Procurement Consulting?

What keeps you from thriving in your role? Too often it's things we can't control – a bad boss, a toxic work culture, etc. But there are also times when it's something more simple, something we can change.

For example, the last consultant I hired, I engaged because I needed better data analytics. I had the right tools, but I didn't know how to leverage them fully. I needed someone who could help me build insightful reports.

Someone who could interpret the information and answer the question, "so what?" I knew I needed outside help because my team ran into this issue over and over. I knew if I could get the expertise I needed, it would be a huge asset to my organization.

So I hired a referral from one of my most trusted colleagues, and the results blew me away. The consultant helped me quantify my efforts and validate all the work I was doing. It was an invaluable investment.


You Might Need a Procurement Consultant If

  • You’re creating elaborate workarounds because you don’t have the right technology
  • Your team doesn’t have clean data or accurate spend analytics
  • Greater buying power is required to get the agreements you want
  • You’re managing a decentralized purchasing organization
  • There’s recently been a merger, acquisition, or you’re under new management
  • You want to bundle contracts or consolidate suppliers
  • People are managing categories they’re not an expert in
  • You want to outsource issuing RFPs
  • The organization is growing and scaling very quickly
  • You’re purchasing or implementing new technology
  • It’s a mid-sized business with a smaller procurement team

Spend some time considering what holds you and your team back. The more specific you can get, the better idea you’ll have of what type of consultant you might need.

Types of Procurement Consultants 

There a several types of procurement consultants available, including:

  • Technology procurement consultants
    • You might hire them to help you select and implement new solutions, ensure they meet safety standards, etc.
  • Industry experts
    • Hire them for strategy, insights, training, coaching, hiring tips, etc.
  • Contract experts
    • Hire them to help you get a better contract, to provide expertise, or to issue an RFP
  • Category specialists
    • They can help you outsource category management, and teach you how to improve supplier management
  • Combination of industry expertise and technology prowess
    • One stop shop consulting firms who can help with a little of everything
    • A great option if you’re not sure what you need

Start researching what procurement consultants can provide. Just remember to be realistic in setting your expectations, and that you’re optimizing your consulting spend.

We recommend looking for people who can provide both tangible solutions as well as the expertise to teach you how to leverage them. For example, work with someone who can not only use their category expertise to get you better contracts but who will also help you monitor your new suppliers.

Look for procurement technology that was built by procurement professionals. There are plenty of solution providers who can teach you how to use their platform, but who can’t solve your business problem.

Pick people that will serve as a partner and empower you to meet your goals.

 

Will Procurement Consultants Make Me Look Bad?

No one wants to work with a consultant who makes them look bad in front of their boss. Personally, I’ve been there, and it was excruciating. I’ve hired consultants who made me look like a hero and ones that made me look like a zero. (I quickly fired the latter.)

While a consultant does have to prove that you need them, that they bring value to the table, they shouldn’t belittle your efforts in the process.  

You want to work with people will be good colleagues and true partners throughout the process. A good consultant will position themselves as a resource that will free you up to focus on more critical tasks. Their goal should be to help you scale your efforts, or provide specialized expertise.

If you’re still worried, ask trusted colleagues for a referral. Read client testimonials and reviews. Take an initial meeting (usually free) and feel the organization out.

 

How Much Will Procurement Consulting Cost?

Since each consultant is unique, there is no one-size-fits-all answer to the question. However, you typically have a few different project-approach options. Here are the pros and cons of each.

Flat Rate Projects

Pro: it’s more results-focused, they work until X, Y, Z is complete. You don’t have to worry about being charged for time spent answering calls or emails, and you don’t have to track how many hours you’ll be billed. Even better, you have an almost guaranteed idea of what the project will cost, assuming you don’t add on any additional requirements.

Con: it's not a good fit if your needs are minimal. For example, if you want to pick someone’s brain for a couple of hours or ask them the occasional question, hourly will likely get you a better deal. Plus, you won’t have to negotiate a scope of work.

Pay by the Hour

Pro: it’s great if you need a small amount of work, or if you don’t want to have to spend time writing up project specs.  

Con: hours for emails, phone calls, meetings, proposals, revisions, all add up. You’ve often spent more than you realize. Also, you’ll likely ask for less than what you need because you don’t want to be billed more hours. Worst of all, the consultant may intentionally drag out projects, so they make more money.  

Retainer Rates

Pro: the huge advantage here is you get on-demand help. Since consultants are juggling lots of clients, they're not always there when a need arises; which can be a significant liability. Retainers guarantee that experts are there whenever you need them.

It's a great model if you have ongoing needs. That way, you're not always having to manage invoices for one-off projects or dealing with contract renewals.

Con: you pay for them even when you’re not actively using them.

Additional Questions to Ask Your Potential Consultant

  • What happens if I need something extra, that goes beyond the initial scope of our agreement?
  • What can you expect the communication process to look like?
  • Is success clearly defined?
  • What does an “ideal” client look like for you?
  • How much do you save clients on average?
  • Do you have existing customers I can get a reference from?  

If you’re continually feeling overwhelmed and overworked, procurement consulting might be worth a try. Still have doubts? Consider doing a trial project, or scheduling a free consultation.

If you’re interested in increasing your buying power or are looking for the best spend analytics software, we can help. Learn more, or contact us here.

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