Unpaid Outsourcing: The New Breed of Service
By
VendorSeek
We've heard things like this from our parents, bosses and mentors:
. There's no such thing as a free ride
. You get what you pay for
. Nothing worthwhile comes easy
This is so ingrained into us that when someone comes along and offers something "free", we immediately become paranoid, wonder what they're "selling" and move quickly to protect our wallets! We're just waiting for the "pitch".
But wait. What if there really are people that can solve urgent logistics, purchasing and materials problems with no risk - people that are ready to listen to your problems, do research on your behalf and find you the best (and often lowest-priced) solution - at no cost to you? Does this sound too good to be true?
Introducing "Solutions Brokers": Creating Win-Win-Win Solutions A multibillion-dollar manufacturing company was in the middle of an intensive site construction project, with 3,500 construction workers and contractors on site. The Purchasing Department was directed to solve two urgent situations: Traffic and Food Service. These 3,500 people needed to park, get to work and eat! This needed to be handled immediately. After considering several options and struggling with how to get this done in the time allotted, they were put in touch with a Solutions Broker.
In only 48 hours, the Solutions Broker had contacted over a dozen service providers and identified three prospective providers for each of the problem areas based on the client's criteria and requirements. The Solutions Broker pre-negotiated the prices with the vendors, identified the higher quality, low cost providers, and handled the site walkthroughs with the vendors. In less than two weeks, the problem was solved and contracts were signed. A Transportation Management firm was selected that would start shuttle services 48 hours after contract signing, and a Food Services firm was scheduled to setup a cafeteria operation over the scheduled weekend. The client company had to pay no consulting dollars to the Solutions Broker, the cafeteria provider setup the cafeteria with no fees for the manufacturing company, and the transportation service was negotiated with flexible terms such that the manufacturing company was guaranteed of service quality and could stop at a moment's notice.
This was a true "win-win-win". An outsourcing win for the client since they found immediate solutions to urgent problems at no cost. Using the Solutions Broker gave them time to focus on other urgent issues while the problem was being solved. A win for the vendors because they landed business and significant revenues they had not expected - an un-forecasted addition to the top and bottom line with an extremely low cost-of-sales. For the Food Service provider, the three-month contract boosted their catering revenues 20% for the year. For the Transportation provider, the unexpected revenues of over $30K-month were achieved with no sales effort. For the Solutions Broker, long term revenue streams resulted for the duration of the contracts as a portion of sales commissions from both suppliers.
The Value of Using Solutions Brokers Manufacturers are increasingly becoming challenged in locating and negotiating with providers. This is especially the case in dynamic markets where practices and technologies are changing rapidly. Solutions Brokers address these challenges by augmenting the client's expertise in areas of risky or doubtful provider engagements, or in times of urgency when their internal procurement resources are stretched beyond capacity. Clients are also shielded from being bombarded by salespeople, and are saved the time and effort of reviewing products or services that don't meet their requirements.
On the other hand, Vendors/Providers no longer rely solely on traditional marketing techniques to grow their business. In the business services and technology markets, competitive advantage does not guarantee high growth. Solutions Brokers assist providers in attaining targets by serving as a channel to matching clients' needs and requirements to the vendor products and services that are the best fit.
Solutions Brokers should be used in situations where you need a solution immediately, and have either exhausted your in-house expertise and aren't happy with the solutions or that you simply have so much to do that you can't get everything solved in the demanded timeframe. Solutions Brokers generally assign your situation to a single partner or representative, and this person is exclusively focused on solving your problem in a short, concentrated timeframe.
Solutions Brokers are generally paid by the vendors they bring to the table to solve your problems. They're not restricted to preferred vendors for any particular service or product. They have extensive business networks, and will contact several vendors that can meet your defined needs, and based on your criteria, bring appropriate options and innovative solutions to the table. They will conduct reference checks on your behalf, conduct research into your problem or situation, visit with the vendors, and even help you with your evaluation of the presented vendors. After the sale, they manage vendor performance to ensure that the quality of products and levels are service meet your needs. They have a vested interest in making sure that you're delighted with every product or service, since their long-term success depends on you continued use of their recommended vendors.
Types of Services that Solutions Brokers Provide Solutions Brokering - This is essentially "Unpaid Procurement Outsourcing" and the primary service that is offered to manufacturers or other types of clients. This service is a full lifecycle offering that formally establishes the business or technology requirements of the client and locates providers that are able to fulfill these requirements and then managing the "delivery program" and ongoing vendor performance. Brokering is made successful by ensuring that the requirements expressed by the clients are effectively delivered by the identified and recommended providers.
Through a solutions brokering service clients are able to procure solutions that independently would have been difficult or impossible to locate. Clients are relieved from the exposures associated with engaging less known providers and risk is reduced during the deployment of complex solutions. Solutions Brokers assure competitive pricing and optimum performance by pre-negotiating contracts with providers and monitoring progress throughout all engagements.
Supplier Contracting - This is the primary service that is offered to vendors/suppliers. This market positioning service exposes providers to business opportunities that are unreachable using their existing marketing channels. Providers are funneled opportunities that are aligned with their capabilities and the implementation bandwidths they possess to deploy mission critical systems.
Through this service providers are brought opportunities that would have been impossible to uncover using traditional marketing vehicles. These opportunities are uncovered purely based on the relationships established with a specific client by the Solutions Broker and the knowledge possessed on their needs. Solutions Brokers assume the role of chief negotiator and ensure the interests of both providers and clients are effectively met.
Trying Out a Solutions Broker If your purchasing department doesn't have a backlog of procurement requests, you may not need or want to use a Solutions Broker. If business is steady and predictable, and you're not faced with impending deadlines that are causing you heartburn or loss of sleep, you're probably not the right client for a Solutions Broker.
But if your buyers are struggling with too many requests, if your material requirements are changing dramatically, if you have to buy products or services that you've never bought before, or if your supplier network is struggling to meet current demands with a looming deadline - try using a Solutions Broker for an urgent, time-consuming, problematic need. Unpaid outsourcing - It won't cost you anything, and the results could be, well, Win-Win-Win.
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