THE BUSINESS REVIEW FOR PROCUREMENT LEADERS
A large multinational company may spend up to £800 million a year on professional services. A cut of 10- 20 per cent in rates, therefore, has the potential to deliver massive savings and grab the board’s attention. Face- to- face interviews conducted by the author with 30 chairmen, CEOs and other board executives found that most worry about how their companies buy these services and want their procurement functions to be involved.
However, only a quarter believe procurement is doing a good job. Many believe it is poorly prepared and prone to unnecessarily upsetting key relationships with consultants, bankers, lawyers and marketing agencies. To avoid this perception and deliver impressive results, CPOs first need to understand the often very personal and long- standing relationships board directors have with companies such as McKinsey and Goldman Sachs, as well as the political games that are played at board level.
Using an adapted version of the "chasm theory", Patel then identifies the three "cracks" that even the most savvy of CPOs can unwittingly fall into during the five phases typically associated with a professional services strategic sourcing initiative, and offers suggestions on how they can avoid this fate.
