Get Started: Map Your Institutional Procurement Processes and Obstacles
This planning stage is going to offer your team a set of filters through which to view your procurement data and helps you understand the procedural landscape that new vendors must navigate in order to do business with your institution.
Review vendor insurance requirements
It is likely that every vendor – big or small, local or not, no matter what they are selling – must demonstrate to your procurement office that they are carrying the same set and level of insurance coverages. Your local-procurement implementation team should review these requirements and identify where these requirements may act as obstacles to small businesses, what the non-negotiable requirements are, and where there are possibilities for some flexibility.
Review how vendor payment terms work
Many of the local vendors your institution will want to establish business with are going to be small businesses whose limited size and capacity makes them vulnerable to revenue disruptions. A 90-day payment stipulation in vendor contract terms can sink a small business that cannot afford to wait that long for payment from your institution. Review the payment procedures and consider an audit to understand the real vendor payment rhythms in your procurement system so that you are able to communicate realistic expectations for vendors, and to identify ways of tightening the process to achieve shorter payment terms.
Know your institution’s e-purchasing expectations
University procurement has gone online, and approved vendors in any such system must be able to provide web-based access to their catalogs and payment mechanisms. This is another possible barrier to a small locally-owned business which may sell things that your institution can purchase, but which doesn’t presently have the capacity to put these functions online. Many diverse and local businesses do not have fully developed e-purchasing platforms, and it may take a few initial orders to provide them with the revenue that they need to further build it out. If your institution is committed to local purchasing, taking time to work with vendors on issues like this is part of the process.
Engage with the local business association
You’ll want to learn what the small businesses in the area say about doing business with your organization, and the local or regional business association can help. Is it easy? Impossible? Frustrating? Risky? Difficult to overcome capacity issues? The business association can help focus any work that needs to be done with vendor communication and onboarding.