A Key To Good Purchase Recommendations
PurchTips - Edition # 44
By Charles Dominick
Will You Be Able To Sell Your Recommendation?
In many organizations, some purchases are so significant that decision-making authority does not rest within the purchasing and supply management department. In these cases, the purchasing department recommends a decision to an officer of the company.
A key to making your recommendations effective is the use of a strong executive summary. An executive summary is single page that addresses the most significant aspects of your recommendation, omitting all trivial matters. It should quickly give the decision-maker confidence in your recommendation.
What sections should your executive summary include? Consider these:
- A table listing high-level points like what is being bought, for whom, and from whom.
- A description of the advantages that led you to select the recommended supplier. These include, to name a few, financial advantages, performance advantages, technical advantages, compatibility advantages, and combinations of various advantages.
- The total cost and independent benchmark costs. Decision-makers need to feel like they are not overspending. Benchmarks like competitive bids, historical prices, internal estimates, or published prices can offer assurance of fair value.
- A description of how you qualified the supplier, proving its ability to meet your organization's needs.
- An overview of key contractual terms. The most significant terms in most contracts include: term, pricing, delivery, warranty, remedies for failure to perform, termination rights, and service and support.
If the purchase itself must be justified, you will need to describe how spending money on the purchase will result in more money being saved or earned.
And, remember, keep it all to one page! Details can be attached, but a busy executive needs to get key information "at a glance."
Spotlight On Professional Development Opportunities
Are you failing to take advantage of Microsoft Excel's powerful techniques for purchasing? Look, even if you are an experienced Excel user, you may not be utilizing the tools that can help you make sound purchasing decisions and deliver top-notch presentations. Next Level Purchasing's online class "Microsoft Excel For Purchasing Professionals" will enable you to perform sophisticated purchasing analyses through exercises that are based entirely on the situations that you face in your work on a daily basis.
You will learn how to use PivotTables, functions, and subtotals to summarize large amounts of purchasing data, plus?
- How to develop "Should Cost Models"
- How to create weighted average supplier scorecards
- How to visually compare bids, analyze spend, and track supplier performance by creating charts
- How to develop "Target Pricing Models" for negotiation strategy, and much more
For more information on this and other online classes for purchasing professionals, visit:
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