Services Procurement

Begin with the End in Mind

There is a saying that is used in jest to define Consulting Services – A Consultant is someone who asks to see your watch, then tells you what time it is and asks for an exorbitant fee.  Likely the person who coined that phrase is among those who learned by experience and paid for something that wasn’t exactly what he was hoping to receive

Defining and describing what you want is one of the most challenging aspects of buying a Service.  The strength of the Service Supplier’s marketing team makes it even more challenging because the glossier the Power Point Deck the more enticing the offer.  So why not allow the Service supplier to write your Statement of Work?

The answer is simple: if the supplier is defining the Service deliverables, you are almost guaranteed to get something that he wants to sell you rather than something of value to you and your business.  To be a good steward of company time and money, it is important to clarify the results and the benefits you hope to achieve from the Service.  Then together with the Service provider, you can discuss and align to the expertise, time and resources needed to do the job.

Ask yourself and your team: “What is the problem we are trying to solve or the opportunity we are trying to capture?”  Force yourself to be as clear and simple as possible, and to quote Stephen Covey,  “begin with the end in mind”.  Define the outcome, the measurable result you need to improve your business situation.

Here are some good examples:

  • Eliminate the losses of energy and water present in our manufacturing processes which prevent us from achieving a 30% efficiency improvement needed by 2030 to deliver our company sustainability pledge.
  • Transfer management and ownership of low value (x$), high transactional materials (>x# per period) to a service supplier and deliver x% savings, efficiency and productivity while increasing user satisfaction.
  • Deliver a productive, compliant, contracted labor workforce to perform manual manufacturing line support that enables P&G to focus on core/automated manufacturing technology.

Once you define your end objective, writing your Statement of Work and identifying potential suppliers are your next challenge.  Do you have en example of a good Statement of Work?  Share yours with me and I’ll develop a workbook of Best In Class templates and examples we can all reapply.

2 thoughts on “Begin with the End in Mind”

  1. It is always come with 2 challenges. 1: More detailed the SOW is, more easy for a service provider to deny “additional” but make sense work. Service is keeping on changing, we need to have an efficient way to keep the SOW up to date; 2: Longer the SOW is, long the KPI list will be. We need to have a right balance between detailed and simplification.
    Also, from reality standpoint, some of the services are moving from in-house to out source service provider. It will be great to see some principle difference between in-house measure (measure of an employee) and KPI (measure of a service provider).

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    1. HI Terry – I agree, in particular when Services and the Service Partners are more mature, you want the results without having to outline all the specific details. The Service Partner should proactivly engage to meet the business needs. I also find that trust is a key element – it is hard to let go of things that were previously performed in house and allow the Service Provider to do it his way.

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