Assessing an Opportunity: The First Step in the Procurement Process

Categories : Procurement Stages | Assess Opportunity
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Published on : Dec 04 2017

At what point do your internal stakeholders engage you in a purchasing project? It may not be until it’s time to identify suppliers, create the RFP and negotiate a contract. But if they involve you earlier in the process – when the team is assessing the opportunity – you’ll provide more value and even out the level of effort throughout the whole project.

Management and stakeholders may not be able to see on their own the value of bringing you in early. However, present them with these key questions and talking points and you’ll likely convince them that procurement can bring exceptional value from the start, including saving time and money on the project.

Key Questions:

  • What are the key factors affecting price of this product or service?

  • How long does it take for a product to be purchased and integrated?

  • Who is involved in the buying process?

  • What are the costs associated with changing suppliers?

Talking Points:

  • It’s critical to understand the total cost of ownership (TCO) to factor in costs other than the initial purchase price. This will help create a more realistic budget looking into the future. This needs to be considered from the very start of the project.

  • There are several elements that can help leverage opportunities and/or avoid threats, such as: the availability of substitute goods; the product life cycle; the cost of related goods; and the risk of switching costs. These are criteria to think of while assessing a project – not after it’s already been launched.

For more questions and talking points, download IBISWorld’s Assess Opportunity Cheat Sheet.



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