1 – Choose your Project Leads in advance
- Both at the global and local level
The success of a project rests on the people who lead it. For each country, you should identify a single point of contact whose approach will be specific to that market.
Make sure you also map out all the key figures involved in the purchasing of ‘intellectual services ‘ for each market. In some countries, this task falls to the HR team or even to the single operational teams rather than to a centralized Procurement department, which requires a global strategy to rationalize how service providers are sourced.
Something else to bear in mind: some countries are far more advanced than others when it comes to training and developing procurement professionals. Make sure you understand how well-trained local procurement teams are in your target markets, this will vary considerably!
- When choosing your Project Leads, always factor in the Total Cost of Ownership (TCO)
Nothing new here – everyone will be familiar with the notion of TCO. When it comes to an international procurement strategy, this is even more important because hidden costs can suddenly make a project much less financially appealing than it initially appeared.
Consider, for instance, the downside of having project teams scattered across different time zones: does that mean they will be working on a staggered schedule, that you’ll have to pay extra for them to be available during non-standard working hours, will you have to revolutionize your work schedule? Better plan ahead to avoid nasty surprises…
2 – Find the right balance between global strategy and local specificities
Expanding your operations abroad means you have to account for country- and even region-specific requirements. Make sure your global strategy can be adapted to each new market in all its dimensions (cultural, legal, financial, etc.
A few concrete examples:
- Roles and job titles that are fairly common in one country may be virtually unknown in others: in France you’ll encounter plenty of ‘Business Engineers’, but if you try to recruit for this position elsewhere without contextualizing the post, you’ll get nowhere.
- Different countries also have different names for the same companies! IT consulting firms for instance are often referred to as ‘ESN’ (entreprises de services du numerique or ‘digital services companies’) in France
- Even the way consultants bill their services varies from country to country. In Europe they tend to charge a daily fee and invoice once per month, in the US and Canada they usually charge by the hour and bill twice a month, etc.
3 – Set strict evaluation criteria to select your service providers
When defining a global procurement strategy to recruit external consultants, many are tempted to target emerging economies which offer a large pool of innovative and promising talent. Before you even get to sourcing, however, you must set appropriate evaluation criteria.
First of all, you have to question whether outsourcing is even advisable. It all depends on the kind of technical skills required and how critical the projects in question are to your company – the closer they are to your core business activities, i.e. to your business model and to your USP, the more cautious you should be outsourcing them.
Next, make a list of all the evaluation criteria, and assign a different weighting to each. Cost is obviously a key factor, but you shouldn’t ignore other elements such us:
- Quality of deliverables and to what degree they match the initial brief
- Working language and time zones
- Pros & Cons of nearshore vs. offshore outsourcing
4 – How mature is your international business strategy?
How mature is your international procurement strategy in terms of partnering with external service providers? Even where a long-standing, established strategy is in place, do question the necessity to outsource to an international pool – is it just a matter of cutting costs?
In order to outsource globally, your project management capabilities must be really solid, with clear and clearly communicated deliverables to avoid the misunderstandings and endless back-and-forth which constitute less of a risk when the whole team is in one place.
Furthermore, good written and spoken English is an essential requirement for both internal and external talent – should that not be the case, there could be serious communication problems.
5 – Find a trusted partner
Finding a trusted partner will always be a winning strategy to save time, manage risk, avoid mistakes and gain in flexibility while cutting costs. What could be better than to collaborate with someone you trust and are used to working with?
A partner that is already present in, and therefore knows your target market well is a key asset, because they can provide precious insights into the country’s culture, legal and tax system, ways of working, etc – which will stop you making costly mistakes.
Conclusions
All in all, a winning procurement strategy is one that strikes a good balance between value in and cost out.
No other business department is as linked to economic developments as Procurement. We may not often think of it this way, but it essentially reflects the way organisations operate and transform. Tell me what your procurement strategy is and I’ll tell you who you are
