The Expense Category Manager Doesn’t Have Personal Experience Working Within The Vendor Industry That Supports The Expense Category

It is extremely rare to have a vendor industry veteran on staff to assist you in analyzing your spend in their former area of expertise.

It is much more common to have a tenured and experienced expense category manager that has purchased products/services from vendors in the supporting industry.

The challenge is that the manger that only has experience buying from an industry (compared to having been inside it) doesn’t know what they don’t know, which means that, when they select the best value (being defined as the best mix of pricing, product/service quality, and vendor support) from a group of bids, they still don’t know what’s possible.

This also means that your company is most likely paying more than necessary, receiving an inferior product or service, and receiving inferior vendor support.

To know when you’ve received the best value an industry can offer, you need to know the cost of goods applicable to the industry. In addition, you need to know the support capabilities of the vendors as well as the cost of each support option. More about that in a moment.

Only when armed with the cost of goods and vendor support capabilities of potential vendors can you truly judge if you have received the best value from your vendor research. Without this knowledge, you’re merely selecting the “best” bid response from your research based on what vendors are willing to offer and not knowing what’s possible.