Working with Procurement – A Vendor’s Guide

in collaboration with Lauren Vaz, Director of Procurement

A few weeks ago, we explored the world of procurement with long-time industry veteran Ben Tu. As a follow-up to Ben’s expert commentary on the larger role procurement plays within B2B tech, I wanted to get the perspective of someone firmly in the trenches. So I sat down with Director of Procurement, Lauren Vaz, for more insight.?

Lauren and I first met when we worked together when I served as CIO for Automation Anywhere. As head of IT and head of procurement, needless to say we went through the (sometimes) arduous process of many purchases and negotiations together.?

Lauren has worked in procurement her entire career, focused exclusively on buying goods and services for SaaS companies like SuccessFactors, SAP and Marketo. She’s an expert on all the in’s and out’s of purchasing, from security and risk mitigation to legal and contract negotiation. Simply put, she’s responsible for buying the things that make her company run. Here’s what she had to say.?

YK: From a purchasing standpoint, what do you look for in a vendor or a main supplier?

LV: People who are easy to work with. The days of hard-nosed back and forth negotiation have long passed. I don’t want to do it, and neither does anyone else. Procurement professionals want our vendor interaction to be transparent and simple. Bring your offering to the table, or if it’s something I can look at in advance send it the day before. The process should be as efficient and quick as possible, more closely mirroring the modern consumer experience.?

When I’m purchasing a SaaS application specifically, I’m looking for a POC, the use of a license, and success criteria made clear up front. I want the ability to renegotiate rates after a certain period of time, and I want any up-front or future discounts clearly documented. Essentially, we want things to be well buttoned up on the operations side of the equation.?

YK: What does that look like in practice? What are traits you’d look for in a vendor that signal positive things to come??

LV: Flexibility is a big part of it, demonstrating some personal agency and empathy in the interactions. For example, don’t give someone a hard time for a simple ask. If their payment terms are net 60 and yours aren’t, don’t make that a sticking point. The easier a sales team and vendor is to work with, the more inclined I am to use them.?

Flexibility is especially important to leadership. When I present a contract back to company leadership, they want to see a vendor that’s willing to provide outs. Most likely we won’t ever want to exercise that option, but it provides comfort for the executive team. Simultaneously, it shows the vendor is willing to prove themselves and, more importantly, they believe they can. If these foundational pieces are in place early, the chances of someone up the food chain unraveling the deal halfway through are very slim.?

YK: Let’s flip that question around. What are red flags you look out for, signs you might not want to work with a vendor?

LV: Recently, I had an interaction with a supplier who wanted to charge us a large implementation fee despite the fact that we had used them before. I pushed back, and the vendor got angry and frustrated. Eventually, they offered a $20K discount — but then walked the offer back the next day. Those are pretty much all of the red flags to look out for in a nutshell — aggressive in negotiations, unpleasantness, unkept promises and unreasonable asks. I’m always skeptical of someone who is frustrated by the concept of explaining their value. If you believe something is worth buying, that part should be easy.?

Keep in mind that procurement has a lot of sway. We have a lot of skin in the game, as the front line working with vendors. When they treat us badly, we remember.?

YK: What separates the good vendors from the great ones??

LV: I really appreciate when someone listens to me, understands what I need and helps me find a solution. If I tell a vendor that my leadership team wants something specific, help me find a solution that’s as close to what we’re trying to do as possible. It’s not about simply acquiescing to the demands of procurement, but getting creative to problem solve as a team. We understand that everyone has a margin, and ultimately we want it to be a win/win for us and the vendor. As the head of procurement, it’s a very challenging position to have to go back to leadership without being able to present anything different.?

It’s not fun to deliver bad news back and forth, while trying to make everyone happy. Vendors who understand and empathize with this dynamic and really have your back are the ones that stick around long-term.?

YK: At a high level, walk me through the optimal purchasing process.

LV: We determine what we need, and set a target budget that we hit. During negotiations, we get all of the business and legal terms we set out to get. The negotiation and purchase process happens quickly so that the product can be deployed and add value. And of course, most importantly, both vendor and customer are happy with the outcome and feel good about it.?

YK: What other internal functions do you work with most closely??

LV: The other functions I work with most often internally, aside from main business buyers like IT, engineering and marketing, are legal, security and finance. Legal helps with contract terms, security helps to mitigate risk, while finance ensures the right financial terms are reflected and issues the PO. All three are equally important, but I have to prioritize who I go to first depending on the type of deal. Sometimes I don’t need security or legal, but I always need finance. It’s largely dependent on what we’re buying, and we have an intake ticketing system similar to IT that allows someone to put in a request for contract review to determine if it needs to be reviewed by legal or security.?

We have a series of questions in place to help us determine whether security or legal is pulled in first, depending on access to data, infrastructure or customer information. We might be purchasing space for a field marketing event with no access to our systems, for example, which would preclude the need for legal or security review.?

YK: What advice do you have for startup founders? Why is this something they should care about??

LV: Founders need to understand that selling successfully into the enterprise requires your contracts to be in order. Too many times I ask a vendor for an order form, and get a blank stare. Similarly, salespeople shouldn’t be confused by their own contracts. They need to understand what they’re giving out, and make sure all of the terms are clearly documented.?