When a company discovers that they’re either purchasing something significant in an unstructured way or the need arises for a new category of purchases, it’s common for multiple suppliers to be evaluated. During the evaluation process, everything from best price to expected reliability will be taken into account.
As anyone with any amount of purchasing negotiation experience will tell you, this practice is part art and part science. While purchasing negotiation may seem a little intimidating at first, the most important thing to remember is it’s something that anyone can learn. Although there are people who make this process seem like magic, the only reason they’re able to do that is because they have so much experience with it. So as long as you’re willing to practice how to negotiate with suppliers on a regular basis by actively engaging in the process, it will likely take less time than you expect to get very skilled at it.
What’s the Key to Successful Purchasing Negotiation?
As mentioned above, a big part of purchasing negotiation success is practice. Since there are a wide range of scenarios that can come up during this process, it takes a little time to become fully familiar with everything you may encounter. In addition to practice, there’s one other component that can take you a very long way.
That component is preparation. The reason this component can have such a big impact on the outcome of purchasing negotiations is because knowledge really is power. By entering a negotiation with as much information as possible, a purchasing manager can put themselves in the driver’s seat of the negotiations.
Setting the Right Expectations for Different Suppliers
One of the most common mistakes that people make with purchasing negotiations is taking the exact same approach with every supplier. The simple reason a blanket approach doesn’t work is because your business doesn’t have the same relationship with all of its suppliers. That’s why it’s important to classify suppliers into A, B and C categories. By understanding the dynamics of a supplier relationship, you’ll be able to craft the right approach to negotiations with them.
Lose-Lose vs Win-Win
While entire books have been written on how to negotiate with suppliers, the most common approaches can be boiled down into two basic categories. With lose-lose negotiating, all someone cares about is bringing the price down as much as possible. Although saving money may sound like a win, the reason that’s not necessarily the case is because it comes at the expense of things like delivery times or quality.
Even though win-win is the less common form of negotiating, it’s the one that purchasing managers should strive for. While this approach still makes it possible to save money, negotiations are handled in a way that also ensures other aspects like quality and delivery are done in the best way possible.
Since getting really good at purchasing negotiations takes practice and time, you may be looking for a way to free up more of your time to focus on this very valuable activity. If that accurately describes your current situation, find out how Bellwether’s Purchasing Software can give you the additional time you need to hone your negotiation skills. Contact us to learn more today.
One of the things we’ve noticed over the course of working with a wide range of purchasing managers and suppliers is that the majority of purchasing managers don’t negotiate. This observation is based on our own experiences, as well as conversations with numerous suppliers. While suppliers aren’t complaining about the fact that more purchasing managers aren’t trying to negotiate, almost all of them have made it clear that they would be open to negotiating a deal.
Since this trend marks quite a bit of missed opportunities for most purchasing managers, we want to cover some tactics that any purchasing manager can use to easily negotiate more of their deals:
Take Time to Prepare
Research has found that 62% of people who engage in negotiations spend less than 60 minutes getting prepared. While that may not seem like a very big deal, the reality of negotiating is it’s all about how you go into this situation. Without proper preparation, the experience is going to be much more stressful than necessary. By taking the time to do all necessary research and really get yourself ready for the conversation, you’ll find that you have the confidence needed to be highly persuasive.
Utilize Open Questions
Because negotiations can take many different forms, there are numerous strategies that someone can utilize during the course of striking a deal. Open questions are one of the most underutilized forms of negotiating. The reason this type of question works so well during a negotiation is because it puts you in control by making it very difficult for the other party to evade what you’re asking.
Know What You’re Trying to Accomplish
Although this may sound obvious, plenty of people enter into situations involving a negotiation without first defining their specific objective. Since negotiations are all about give and take, it’s generally best to set an ideal objective, as well as a realistic objective. And depending on your willingness to work with a supplier, it may also make sense to have a walk away limit.
Don’t Be Overly Competitive
While negotiating can provide you with a rush of excitement, that doesn’t mean you want to get too caught up in the competitive aspect of this tactic. When people enter a negotiation with the outlook that they’re going to win every single deal point, they end up sabotaging what could have otherwise been a very positive experience for both parties.
As you can see from the above tactics, negotiating is a skill just like any other. As a result, it can take some time to feel really confident as a negotiator. But as long as you commit to negotiating and make an effort to continuously improve, you’ll be very happy with the results that you begin to get from this practice.
One of the many features that Bellwether Purchasing Software offers is the ability to approve requisitions and purchase orders from anywhere. As long as you have access to email or a web browser, you can complete this task. A big part of why this flexibility is good news for purchasing managers and others involved in the purchasing process is modern workflows continue to become more mobile.
A simple way to understand why mobile is having such a big impact on how people work is to look at existing consumer behavior. Since most people consistently use their phone from when they get up until they go to sleep, it’s easy to see how this behavior carries over into the workplace. The fact that the average person has their phone within reach for 14 hours a day is why Apple and other technology companies are betting so big on wearable devices like watches.
Understanding Just How Big Mobile Has Become
Although you can see mobile devices anywhere that you go, it’s still easy to forget just how much of a societal shift that these phones have caused. The best way to put the full impact of mobile into perspective is to dig into the numbers.
Currently, 378,000 iPhones are sold a day, while only 371,000 babies are born on a daily basis. The incredible popularity of the iPhone and other smartphones is why more people on earth own a mobile phone than do a toothbrush. It’s also why projections point towards the presence of 10 billion mobile connected devices by 2017.
Shopping is one of the behaviors that consumers regularly rely on their mobile device to do. Not only do 80% of consumers use their smartphone to shop, but 56% believe their mobile devices make shopping more enjoyable. And what may come as the biggest surprise is a full 25% of consumers do all of their online shopping via a mobile device.
Since these stats put into perspective just how big mobile has become, it’s easy to see why failing to embrace this trend would be a mistake for a business. But by making the transition to a more mobile workflow, businesses can ensure that their best practices don’t fall out of step with what’s happening around them.
Mobile Provides An Advantage in Both B2B and B2C
Regardless of the specific industry you’re in, your personal productivity will benefit from being empowered through mobile. Not only will mobile provide you with flexibility and the ability to stay on top of your work, but it will also benefit anyone who works with you. So if you want to feel more in control of your daily processes and less stressed out by your responsibilities as a purchasing manager, Bellwether Purchasing Software features like mobile accessibility will greatly benefit you. Contact us today to learn more.
Whether you’re a purchasing manager or an employee from another department, if you’re looking at Bellwether Purchasing Software, you may have already spent enough time reading about this product to know that it’s going to improve your efficiency and productivity. However, before you can start reaping all the benefits that our Purchase Manager Software has to offer, you may need to make a case about how your company can benefit from a procurement approval system.
Since Bellwether Purchasing Software is committed to reducing stress and increasing productivity, we thought it would be helpful to put together a post that explains exactly how a company can benefit from a procurement approval system. Once you finish reading this post, feel free to use as much of it as you need to build a compelling case for how your company will benefit from utilizing Bellwether Purchase Manager Software.
Putting the Role of Procurement Into Perspective
In order to properly demonstrate the benefits of a procurement approval system, it’s important to put this practice in the right context. While procurement has evolved over time, its core is still tied to keeping purchasing costs low and ensuring that inventory remains properly stocked.
While those tasks may seem fairly straightforward, if you take a step back and look at them, it becomes clear that they impact many areas of a business. From ensuring that margins are strong to enabling a business to properly service its customers, a lot of what a business does relies on procurement.
The Benefits of a Procurement Approval System
Now that we’ve clarified why procurement is so important to a business, it’s time to explain exactly how a procurement approval system will benefit a company. Because this type of system guides the entire procurement process, it covers requisition, approval, purchase and receipt of goods.
The first reason this type of system is beneficial is because it ensures business is only done with approved suppliers. Second, it requires a valid purchase in order to obtain goods or services. Third, this type of system encourages supplier competition, which in turn can lead to more favorable pricing.
Fourth, information like confidential procurement practices are properly safeguarded. And finally, a procurement approval system not only minimizes conflicts of interest, but also provides a system for dealing with any that arise. Because a procurement approval system has so much to offer a company, the only question left to answer is how to best implement one.
The Best Way to Implement a Procurement Approval System
Utilizing Bellwether Purchasing Software is the best way to implement this type of system. Not only does our purchasing software suite make it possible to easily automate purchasing processes and eliminate paper, but it works without requiring any IT support. And because Bellwether Purchasing Software has numerous other features that make it possible to save time, it’s simply the best way to start using a procurement approval system. Contact us today to learn more.
At Bellwether Purchasing Software, we’re committed to improving purchasing managers’ professional quality of life. Whether that means easily automating purchasing processes or providing clear information that can easily be shared with others, we consider ourselves advocates for this field.
Since purchasing isn’t a practice that exists in a bubble, we’ve found that employees from other departments often have questions about different topics that fall within the scope of procurement. One of those topics is what’s meant by the terms strategic sourcing and tactical sourcing. Because we know from our conversations with purchasing managers that this question comes up on a regular basis, we wanted to create a resource that purchasing managers could point people to or even print out as a resource.
What is Strategic Sourcing?
Holistic, long-term and systematic are the three terms that best describe strategic sourcing. The approach to sourcing focuses on both the current and future needs of a company. One of the main focuses of strategic sourcing is having both the lowest TCO and lowest supply line risk. A big part of how strategic sourcing operates is by creating a closed loop link. Since this loop exists between the supplier and customer, it becomes possible to improve elements like delivery on an ongoing basis.
In order for strategic sourcing to be carried out in the most efficient way possible, it needs to properly address relationship management, supplier evaluation and spend analysis.
What is Tactical Sourcing?
Whereas strategic sourcing takes a longer-term outlook, tactical sourcing focuses on activity that’s transactional and short-term. Although there are some aspects of tactical sourcing that can be reactive in nature, it does take a proactive approach to ensuring that purchases are made at optimal prices, as well as that supply is available when it is needed.
This type of sourcing is most commonly found within manufacturing companies that are small to medium in size. Another area where tactical sourcing significantly differs from strategic is there’s no emphasis placed on understanding a company’s overall requirements. The same goes for really digging into what a vendor is capable of doing in terms of helping a company. Instead, most of the quick quote and order processes used in tactical sourcing are focused on providing production operations with the support it requires.
While strategic sourcing may seem like the obvious choice for a company, there are plenty of companies who have found that tactical sourcing best fits their needs. That’s why Bellwether Purchasing Software is designed to fit into a company’s workflow instead of requiring them to change all of their practices. By offering this type of flexibility, our Purchase Manager Software makes it easy to get everyone on-board and subsequently enjoy all the rewards of a properly optimized procurement process.
Most of the small and medium enterprises are now turning their attention to cloud based purchase order software programs. This is one of the ways to maintain a growing business, especially now that modern technology has become an essential part of nearly every business worldwide. You don’t want to be left behind and converting to this type of software will be a big step in the right direction. But you don’t want to jump on board just because everyone is doing it. What are the benefits of this software program to your business? The main concept of cloud computing is to allow a company to gain access to any software or server from any internet connected device – your office computer, laptop, tablet or even your phone. That is generally a key motivation for businesses to utilize cloud based software programs.
Services available over the internet are typically sold on a subscription basis so it will be upon you to choose the best one. Reduced upfront cost is a great reason why cloud based software is such an affordable option for smaller businesses. The subscription fee typically covers all ongoing costs including software updates and happen in the background on the server without having to involve your business or interrupt your operations.
Cloud based purchase order software allows you to track your cash flow effectively so that you don’t end up paying your suppliers more than you owe them. Businesses that do this manually get tripped up with errors and losses through irregular payments, but that is no longer a concern with such a software program. It will let you know if there are any fiscal commitments that are pending thus making accountability easy. Cases of the company losing cash through procurement will be effectively dealt with once you have installed cloud based purchase order software to your company.
The fact that your suppliers will be paid on time without any delays is an added advantage coming with this software. It is possible to set reminders which ensure you don’t miss due dates on any outstanding debts. Having a reputation for on time payment can make negotiations easier. There is enhanced accuracy and lowered errors when making purchase orders with a cloud based software program. The software makes any updates to invoices and purchase orders automatically which eliminates chances of errors occurring. You will find this software very useful in case your employees frequently make such mistakes either deliberately or not. Whether its supplier details, inventory records or accounting details; all that will be updated in an accurate manner using this software program.
The speed at which purchase orders are done increases once your company is using a cloud based software program. The system has the ability of integrating all processes involved in making a purchase order saving you sizeable amount of time that could be consumed when doing it physically. You just require a single click and the purchase order will be sent to the supplier. With the internet, you can send the order through an e-mail and the feedback is always prompt. You have a reason and half to get cloud based purchase order software for your business.
Cloud based purchase order software programs have numerous benefits that will push you into having one for your business. They improve speed for sending purchase orders, improve accuracy and offer cash flow control among other benefits. Consider Bellwether Purchasing Software: for all your purchasing needs.
Procurement management software will help a business take care of any risks associated with purchase as well as suppliers. The procurement chain is usually subjected to many dangers that can result in heavy losses but you will be well protected with a software program. Since there are many programs in the market today, you should be extra careful on how you make your choices not to end up frustrated. The following tips will be helpful once considered. You must first have a good understanding of the diverse procurement management tools existing in the market. These will be helpful in collecting data about certain procurements, manage the workflow, manage the performance of suppliers as well as take care of the risks that might come up.
For the procurement software that you are considering make sure to look at the version that is currently in the market and when it was released. You should go for the latest release because it has all the advanced features and its effectiveness will be unmatched. You will only have yourself to blame in case the version you have selected has expired features and cannot help in streamlining your company procurement. Even though it’s impossible to have any software that is entirely free from viral attacks; that should be a key consideration when making purchases. It should have high resistance to such attacks through active scanning and elimination of detected bugs.
You must consider the analytical prowess of the procurement management software you buy because you are well aware that procurement responsibilities are many at your company. The software should be in a position of handling all the information collected from the supplier and that will help in making good decisions for the sake of the company. Don’t just choose a program because you have come across it or your competitor has one. There are several other tools and hardware that your software program will require in working effectively. You have to ensure the software you have purchased for your procurement management is compatible with all your other systems. It should never work as a lone-ranger but in tandem with other related tools.
The software program should also not experience problems working with your computer system. The reputation of your procurement management software program matters a lot and must be among the considerations you make during purchase. Is it suitable for performing as you expect? Is it reliable enough? Those are the queries you must seek answers to in determining its reputation. The company that manufactures the software must as well have the best reputation including good market presence and enough experience. Never gamble around with such a vital decision that will have great impact to your company’s procurement process. Contact us at Bellwether Purchasing Software today for your free live demo.
The procurement management software program you end up choosing for your business should be the right one and not one that which will give you problems. It should be reliable, effective and of good market reputation for a guarantee that it is well suited. Don’t just choose any PO software you come across without proper considerations.