The document discusses the complex relationship between sales and procurement, highlighting misperceptions and frustrations on both sides. A survey conducted revealed differences in understanding and communication, indicating that while both groups recognize the importance of collaboration, significant performance gaps exist. Key recommendations include improving communication, sharing benefits, and adopting a long-term perspective to enhance cooperation.

1. SALES & PROCUREMENT: FRIENDS OR FOES
27 FEBRUARY 2013

2. Today it’s all about
2

3. On the relationship
between Sales and Procurement
3

4. Going beyond the clichés
Walking in each others shoes
Procurement as the dark side only
focused on getting the most out of
you | to avoid when possible
Sales as opportunists | trying to close
a sale even if not in my interest
4

5. ABOUT THE EVENT

6. WHY DELOITTE & VLERICK
• Joint ambition to grow the Sales network and profession in Belgium
• Marketing community strong developed in Belgium, Sales community
not
• Ambition:
• Center of expertise around sales
• Backed up by academic research
and industry experience
• Professionalizing and
strengthening sales capabilities
• Creating strong sales community
• Through focus groups, events
and other activities
6

7. ON THE RELATION BETWEEN SALES AND
PROCUREMENT
Survey launched in October – November 2012
To bring clarity on a number of topics:
• Overall state of the relationship?
• Main challenges and frustrations?
• Opportunity to move to ‘win-win’ collaboration?
• Concepts like ‘value selling’ or ‘solution selling’ are widespread,
yet also top of mind?
• Is Sales aware of Procurement’s expectations and vice-versa?
• Are both parties backed up by appropriate internal support?
7

8. WHAT DID WE DO?

9. WE LOOKED AT RELATIONSHIPS
sales procurement
• Sales management • Procurement
• Marketing management
• Production and • End-users such as
supply chain engineering, R&D
• Finance • ICT
• … • Finance
• …
Internal Overall understanding, Internal
challenges perceptions & frustrations challenges
9

10. BROAD SET OF RESPONSES
68% 32%
active in sales active in procurement
113 54
respondents respondents
10

11. WHO ARE OUR SALES PROFESSIONALS?
Sales management / Sales Products 48,8%
58,4%
executive
Account manager / Key account
29,6% Services 36,8%
manager / Sales representative
Inside sales 1,6%
Solutions 14,4%
I don’t have sales responsibilities 10,4%
Commodity 51,2%
Specialty 48,8%
11

12. WHO ARE OUR PROCUREMENT PROFESSIONALS?
Procurement / supply chain Products 59,4%
18,8%
executive (CPO)
Procurement / supply chain
31,3% Services 28,1%
manager
Buyer / senior buyer 50,0%
Solutions 12,5%
I don't have procurement
0,0%
responsibilities
Commodity 43,8%
Specialty 56,3%
12

13. OVERALL RELATION

14. STILL LARGE DIFFERENCES IN PERCEPTION OF
OVERALL RELATION
0%
Super Collaboration
3%
20%
Partnership
27%
63%
Cooperative
35%
17%
Combative
35%
0% 10% 20% 30% 40% 50% 60% 70%
Procurement Sales
14

15. RELATIONAL AND
BEHAVIOUR

16. WE LOOKED AT VARIOUS BEHAVIORAL
ASPECTS
sales procurement
• Sales management • Procurement
• Marketing management
• Production and • End-users such as
supply chain engineering, R&D
• Finance • ICT
• … • Finance
• …
Scoring behavioral criteria
Internal on importance and Internal
challenges performance | assess gap challenges

17. SALES BEHAVIORAL ASPECTS
STRONG ALIGNMENT ABOUT WHAT’S IMPORTANT …
Importance
Sales Proc.
Deliver on promises 4,5 4,4
Understanding the customers' business challenges 4,3 4,1
Efficient and proactive communication by sales 4,2 4,0
Long term, close and personal relationships 4,2 3,7
Sharing of benefits 3,9 3,7
Providing new insights 3,9 3,7
Generating performance improvements 3,8 3,8
Exchange of company information 3,7 3,9
Insights on total cost of ownership 3,6 3,8
Transparency of product/service offerings 3,5 3,8
• Overall sales and procurement are pretty well aligned on what’s important
• 3 important foundations for a strong relation
• No alignment on importance of building long term relations
• Remarkable low score on total cost of ownership
17

18. SALES BEHAVIORAL ASPECTS
… YET LARGE GAPS IN PERFORMANCE EVALUATION
Importance Performance
Sales Proc. Sales Proc.
Deliver on promises 4,5 4,4 3,8 3,0
Understanding the customers' business challenges 4,3 4,1 3,6 3,1
Efficient and proactive communication by sales 4,2 4,0 3,6 2,7
Long term, close and personal relationships 4,2 3,7 3,9 3,1
Sharing of benefits 3,9 3,7 3,5 2,6
Providing new insights 3,9 3,7 3,4 2,8
Generating performance improvements 3,8 3,8 3,5 2,7
Exchange of company information 3,7 3,9 3,4 3,0
Insights on total cost of ownership 3,6 3,8 3,2 2,4
Transparency of product/service offerings 3,5 3,8 3,4 2,6
Average performance 3,5 2,8
• Yet, significant gap in terms of performance evaluation
• Largest gaps in ‘delivering on promises’, ‘communication’, ‘long relationships’
and ‘benefit sharing’
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19. SALES BEHAVIORAL ASPECTS
WHAT SHOULD SALES DO?
• Ability to deliver on
promises
• Efficient and proactive
IMPORTANCE
Good understanding of
communication
the customers' business
challenges
High Fix it
Fives now • Focus on sharing benefits
• Exchange of with the customer
company • Providing insight in the
information total cost of ownership
We have
• Building long term, bigger Tackle it • Transparency of
close and personal fish to fry later product/service offerings
relationships
GAP TO BRIDGE
19

20. PROCUREMENT BEHAVIORAL ASPECTS
AGAIN ALIGNMENT ABOUT WHAT’S IMPORTANT …
Importance
Proc. Sales
Providing clear and detailed requirements 4,1 4,2
Efficient, clear and timely communication 4,1 4,1
Open communication about the selection process 3,9 4,0
Focus on aligning both businesses and sharing benefits 3,9 3,9
Focus on generating top line performance improvements 3,9 3,8
Emphasis on long term personal relationships 3,8 3,9
Providing performance follow-up and feedback 3,8 3,8
Exchange of company information 3,7 3,9
Supporting after sales follow-up 3,4 3,4
• Strong alignment on what’s important and what’s not.
• Communication, transparent selection and clear requirement are most
important for the relationship
• Aftersales activities are considered as not that crucial in the relationship
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21. PROCUREMENT BEHAVIORAL ASPECTS
Importance Performance
Proc. Sales Proc. Sales
Providing clear and detailed requirements 4,1 4,2 3,6 3,2
Efficient, clear and timely communication 4,1 4,1 3,6 3,3
Open communication about the selection process 3,9 4,0 3,6 3,0
Focus on aligning both businesses and sharing benefits 3,9 3,9 3,3 2,8
Focus on generating top line performance improvements 3,9 3,8 3,4 3,2
Emphasis on long term personal relationships 3,8 3,9 3,4 3,1
Providing performance follow-up and feedback 3,8 3,8 3,3 2,9
Exchange of company information 3,7 3,9 3,2 2,8
Supporting after sales follow-up 3,4 3,4 2,8 2,8
Average performance 3,4 3,0
• Procurement evaluates own performance better than sales. Yet, gap is
smaller compared to sales behavioural aspects
• Biggest gaps are ‘communication of selection criteria’ and ‘sharing of
benefits’
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22. PROCUREMENT BEHAVIORAL ASPECTS
WHAT SHOULD PROCUREMENT DO?
• Providing clear
requirements
Focusing on business • Efficient, clear & timely
impact by searching for communication
the means to generate • Open communication
IMPORTANCE
bottom line or top line about selection
performance • Sharing benefits
improvements
High Fix it
Fives now
Supporting after sales • Emphasize on long term
follow-up and personal relationships
participating in We have
bigger Tackle it • Provide performance
satisfaction monitoring later follow-up and feedback
fish to fry
initiatives • Exchange company info
GAP TO BRIDGE
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23. FRUSTRATIONS AT
BOTH SIDES

24. FRUSTRATIONS AT BOTH SIDES
Sales  Procurement Procurement  Sales
1. Only focused on cost 1. Limited information sharing /
reductions and price Poor communication
negotiations
2. Procurement is not seen as
2. Lack of strategic insight / the first point of contact
Lack of knowledge of business
needs
3. Opportunistic behaviour
3. Procurement reluctant to give
access to other stakeholders
Largest impact on relation
24

25. INTERNAL CHALLENGES

26. INTERNAL CHALLENGES
sales procurement
• Sales management • Procurement
• Marketing management
• Production and • End-users such as
supply chain engineering, R&D
• Finance • ICT
• … • Finance
• …
Internal Overall understanding, Internal
challenges perceptions & frustrations challenges
26

27. LARGE MUTUAL UNDERSTANDING OF INTERNAL
CHALLENGES FOR SALES
Sales say: Procurement thinks:
Top 4: Top 4:
1. High administrative burden 1. Focus on short-term objectives (e.g.
revenue) rather than long-term
2. Focus on short-term objectives opportunities
(e.g. revenue) rather than long-
term opportunities 2. Finding your way in a complex
organization (e.g. different
3. Internal alignment between products, departments)
departments on situation of
customer 3. Internal alignment between
departments on situation of
4. Internal misalignment, customer
communication and company
politics (e.g. regional vs global, 4. Internal decision power of sales
sales vs marketing) department to live up to customer
expectations
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28. SAME FOR PROCUREMENT CHALLENGES
Procurement says: Sales thinks:
Top 4: Top 4:
1. Internal acceptance as value- 1. Too much focus on cost reduction
adding partner instead of TCO or added value
2. Convincing internal client of new 2. Convincing internal client of new
suppliers suppliers
3. Proving the added value to the 3. Internal acceptance as value-adding
business partner
4. Visibility of what comes up from 4. Proving the added value to the
the business business
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29. CONCLUSIONS

30. A DUAL PERSPECTIVE: ANECDOTAL EVIDENCE
SALES CONCERNS PROCUREMENT CONCERNS
 Commoditization  Too much “black-box
 Ever extending sales cycle selling
times  Increasing accountability
 Managing the right Go-to-  Managing transaction
Market Strategies costs
Is SOLUTION SELLING really dead?
30 © Vlerick Business School

31. OVERALL FINDINGS
sales procurement
• Too much focus on • Value-adding partner
short term • Demonstrating added
• Internal alignment value
on customer • Convincing internal
• Internal client
misalignment, • Internal visibility
communication and
company politics
Actions Sales: Actions Procurement:
• Deliver on promises • Clear requirements
• Efficient and proactive • Communication
communication • Open communication about
selection
Frustrations wrt • Sharing benefits
Procurement:
• Focus on cost and price Frustrations wrt Sales:
• No access to other • Information sharing /
stakeholders communication
• Not first contact
• Opportunistic
Internal Overall understanding, Internal
challenges perceptions & frustrations challenges
31

32. WRAP-UP AND CONCLUSIONS Deva
You are bound to work together, so:
1. Start engaging with each other before, during and after
formal transactions – will increase value of both sides
2. Step in each-other’s shoes – understand each-other’s
objectives and have relevant conversations
3. Do what you say and say what you do
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33. THANK YOU!
VLERICK BUSINESS SCHOOL
DELOITTE