The Evolution of Buying and Selling in the 21st Century
By Robert A. Arthurs

It has become evident that the way companies source products and services is changing. There is an increasing trend in procurement to actively seek out, not just the best price, but the best value, for the best price, by the most qualified suppliers. Purchasing has become very sophisticated and so must the selling of products and services. Unfortunately, many people confuse sophisticated with complicated. A recent study by the Florida State and North Carolina State Universities, outlined conclusions about the trends in purchasing and the skills needed by both purchaser and vendor. Some of the most significant trends are the continuing pressure to reduce costs, while developing and managing strategic supplier relationships. Ethics and accountability along with the transparency of the purchasing process are also very important issues outlined in the study. Other general conclusions include the collaboration and strategic relationship management with suppliers and the focus on the total cost in supplier selection along with cost management across the whole supply chain. This inevitably will mean a greater focus on performance based spending and an outsourcing of services and other areas of non-conventional spending. This evolution will precipitate a need for a broader range of business skills for both the purchaser and the vendor. The vendor will need to fully understand their place in the business process of the purchaser and the purchaser will need to understand how to choose the best vendor partner so the relationship will be productive and profitable.
Introducing The Request For Proposal or RFP to the purchasing process is one method of implementation of this evolution that is becoming very prevalent. The RFP, in its various forms, creates a competitive environment for the procurement of goods and services that enables the purchaser to get the best possible value, for the most competitive price, by the most qualified suppliers. It provides for safeguards against fraud, collusion, nepotism and cronyism. In essence, it allows everyone to compete fairly for the same business in every market segment and in every sector of the economy. The only question remaining is why most businesses avoid bidding on RFP’s. The answer is simple. Small to medium sized enterprise makes up the majority of our economy and the process is more sophisticated than the average small to medium sized business is used to dealing with. That does not mean that it is complicated, just different. Many people fear the unknown and it is the lack of knowledge and training that fuels that fear. The RFP has become a big scary monster that most businesses would rather avoid. The only way to overcome this paralyzing fear is to develop the new skills needed to take part in the changing economy. The ability to adapt to the new ways of buying and selling will determine the success of any venture into the future. Ethics, leadership, team building, developing and managing strategic partnerships and relationships, managing the supply chain, managing change, managing risk, strategic planning and thinking, uncovering hidden opportunities, writing RFP’s and bids, negotiating and interpersonal skills are all skills that will be required to take part in the changing economy on any scale. Education and training will be a very important part of any businesses strategic plan.

The business community is also facing changes in the way they are perceived in society. There is an expectation that businesses become community focused and socially responsible. Addressing issues such as sustainability, socially and environmentally responsible business practices and community focused economical development is no longer just the right thing to do, it is becoming mandatory. The greatest challenge for businesses can often be, simply understanding the definition of sustainability and social responsibility and what the means of implementation should be. In 1992 during the UN conference in Rio de Janeiro, many of the world’s leaders agreed to a number of principles about sustainable development in Agenda 21. Three aspects that must be considered are: Improving socio-economic conditions, strengthening the role of major groups in society and the conservation and management of resources and the environment. Figuring out how to put these principles into practice is up to the business community.
The way the world does business is evolving and to survive and thrive businesses must keep pace with the tide of change.