Thursday, 10 October 2013

Disruptive procurement - lessons from Azerbaijan election

I don't think I've never discussed Azerbaijan before and certainly never their Presidential election. Today justifies a change as there are lessons for procurement from the announcement of the re-election of Ilham Aliyev as President.

Firstly, we have the announcement of the results a day before the actual voting took place. Secondly, we had the allegation that fake candidates were included so as to confuse the electorate.

I'm sure you've had similar experiences to me: someone makes the grand statement that no one else can provide what they need or that no one else can beat that price. Effectively they've announced the result before the competition has even started - they've 'done an Azerbaijan! The funny thing is that whenever you disrupt their thinking, and introduce other potential providers, there seems to be a lack of loyalty to the earlier preference - does the specifier feel betrayed by the earlier preference? I think physiologists refer to that as cognitive dissonance. Regardless, to me, one of the key roles of CPOs is to get in and disrupt the 'foregone conclusion' - we need disruptive procurement.

Then we have the lesson of the fake candidates. Yes, we've all come across a list of potential alternative providers, some of whom haven't the capacity to take on the work, others don't have the capability and some are known to be significantly more expensive. This creates a veneer of going to the market when in reality it is nothing more than a sham - they've dome an Azerbaijan! Some years ago I introduced a system which enabled me to open the door to potential new suppliers by insisting that every time a new RFP was sought, a new supplier had also to be invited. The result was an opening of the market and better deals. To me that's another form of disruptive procurement.

Yesterday, I discuss the absence of challenge in business cases. That provides another example of where disruptive procurement could be effective. Had Procurement been involved earlier, 'disturbing the waters', so much reputational damage could have been avoided and money more effectively spent.

To be disruptive does not mean being aggressive. It requires winning 'hearts and minds' - it requires influencing skills not policeman skills. It also requires being involved right throughout the procurement cycle, from defining the problem which has to be solved.

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