Monday, August 1, 2011

Differences of opinions – a note to readers

One of the things that I've found in reading a number of on-line posts is that many times individuals will have different opinions. One of the things I've said many times is that and individuals view of the world will depend upon where they sit.In procurement there are tops down views that senior managers have, there are bottom up views that buyers have and there are cross views that supplier and commodity managers have. The same applies to opinions on contracts. How you feel about what's best for a particular subject will always depend upon where you sit (the country you live in and the legal system you deal with. Your view will also depend upon the types of contracts and suppliers that you deal with. This means that for every general rule there may be on what's best, there will always be exceptions.

For example, in a discussion about the best approach to resolve disputes some argued arbitration, some argued mediation, and others argued litigation. The individual that argued mediation was a mediator so his view of what was best was influenced by his view of the world. An individual that argued arbitration was from India. So I looked to see why he might have had that view and found that the average time period for a case in Indian courts to be resolved was fifteen years. I could understand his view that for him arbitration was probably the best approach. An individual that argued litigation as a way of resolving disputes was from the U.S.where the time is much shorter and the cost of litigation is much higher.In using litigation disputes are usually settled well before the parties would go to court just to avoid the full expense of litigation.

I always welcome different opinions.I would encourage individuals to also share why they have a different opinion. It may be simply because they have a different view of the topic because they have a different view of the world.


Getting To Know Your Customer

I’ve always been of the opinion that a strong relationship with your internal customer is an important part of writing contracts. Many times when I’ve been asked to support a new customer I would approach them and ask them if I could temporarily sit in their location so I could better understand the group and their needs.
What I wanted was to learn more about their business and their needs. I wanted to learn the issues that were important to them and the issues they had little concern about. I wanted to learn what drove their business and what they would consider being a success. I wanted to learn what was important to them. Was it cost? Was it schedule or time to market? If there was a major purchase they were making I wanted to understand why they were making it or what problem they were trying to solve. I wanted to learn from their past experience in terms of problems they had experienced in the past. I wanted to understand their business and the impact problems would have on their business. I would ask a lot of questions. The time I spent doing this I considered an investment in being able to both support them better and also to help me do my job better. It also helped build a stronger, more open relationship with the customer. If you help them meet their goals, the majority businesses and business managers that I’ve dealt with will also work with you to help you meet your goals.

There are many advantages that you gain when you make this investment:

1. The more you know about the customer’s business, their problem and what they need or want, the more prepared you for being able to qualify the right suppliers to involve in the bid or proposal process. When you select the right suppliers for the work, you should have fewer problems.

2. The process provides you with key information you can use when reviewing purchase documents that are initially prepared by the group. If you fully know their operation, you can ask why something isn’t included or why something needs to be different from their norm. The better the document meets the needs of the business, the fewer the problems you should have.

3. Knowing a customer’s business, concerns and the real impact problems would have on their operation helps in structuring the contract and preparing contract terms to help manage against the problems that affect the customer. It also provides you with the information needed to include terms that help meet their needs. If your contract and terms are structured to meet the customer’s needs you should have fewer problems and less changes.

4. Understanding the customer’s business is immensely helpful in negotiating contract terms as it allows you to easily explain the problem or problems a supplier’s position or approach will have on the customer’s operations and why you simply can’t accept it.

5. If you build a strong relationship with a customer, when your management solicits feedback about the relationship and your performance, you will have a strong supporter.