What Does Category Management Have To Do With Me, The Business Development Professional?

Happy Fiscal New Year! With the start of the new fiscal year comes promises of a clean slate, and a fresh fiscal start (or at least funding until December 9). It is also an opportunity to reframe your everyday business development tasks and reinforce your tactics to stay competitive.

Over the past two months, we tackled the WHAT and the WHY of Category Management – and in this post it is time to discuss the fun stuff, i.e. the WHO and WHERE. Who being you, the business development professional (and we are all business development professionals); the Where being where this initiative is going to impact your business development cycle.

As explained in Part 2 of the Category Management Series, the Government has already started implementing Category Management through the merging and eradication of legacy IDIQ contracts, as exemplified in several examples below that have happened in the past fiscal year below:

• August roll out of the Government’s new Professional Services Strategic Plan
• Department of Homeland Security’s (DHS's) decision to end its five year, $11 billion ceiling Technical, Acquisition and Business Support Services (TABSS) Blanket Purchase Agreement (BPA); the contract will expire in 2017 and DHS has already committed to using General Services Administration’s (GSA’s) One Acquisition Solution for Integrated Services (OASIS) vehicle
• GSA’s reverse auction to set up three BPAs for five agencies to buy more than 45,000 laptops and desktops

Category Management memorandums call for Chief Information Officers (CIOs) and Chief Acquisition Officers (CAOs) to work together to achieve the goals of Category Management spend. In essence, Category Management’s aim to have the Government work as a single Enterprise thus impacting not only procurement offices, but program offices as well.

Managing spending by category won’t just change how common goods and services are bought, it will affect why they are being bought – making the two main elements to watch of the next fiscal year(s): why and demand.

Gain Perspective

“Winning is the science of being totally prepared”.- George Allen, Sr.

As part of industry, I have accepted that procurement will continue to change with Category Management and that resources on duplicative contracts might be scratched from the pipeline. Category Management is going to require that the Government understands the minutia of program operations to manage demands.

While the Government is working on its understanding, the impact to us contractors is clear: upcoming pipeline opportunities might be halted while the Government “re-examines” their acquisition strategy causing this opportunity to either: a) move to preferred vehicle; b) continue to push; or c) disappear completely. To make sure that your company, business development, and overall capture are ahead of the game and are ready for what is sure to be a few curve balls – here are some helpful links that explain a few proposed Government acquisition strategies that might be coming soon to your company:

• Understand Federal Information Technology Acquisition Reform (FITARA) and what is driving a majority of these categories, especially Information Technology (IT)
• Understand the proposed rule issued by the Federal Acquisition Regulation: Strategic Sourcing Documentation and the impacts this might have
• Review and explore the Acquisition Gateway to familiarize yourself with the resources the Government will be sharing

Do the Research

Many business development professionals make an unforgivable mistake when they call a prospect: they start talking before they have done the research and have “earned” the right to do so. By doing the research, you gain perspective on where your company fits in to the procurement puzzle. By understanding the why and demand, you can then strategically create a game plan that will allow your company to benefit from the new Category Management initiatives. Here are a few suggestions on where to focus your research:

• Employ the FREE tools such as FPDS and USA Spending – by leveraging these FREE tools you can understand how much each agency is spending and slice this data by company, contract, and department. This can point towards how the agency might be adjusting their acquisition strategy based on category management – and find out where you can bring efficiency based on your core competencies and best practices.
• Understand where the money is going - about 20% of the $60 billion in government-wide professional services spending now flows through GSA-managed contracts, says Tiffany Hixson, the agency's professional services category executive. She is adamant that her customers are program, not only procurement, organizations. "From my perspective, it's the full acquisition community that is my customer," Hixson says. "That's going to be a big focus for GSA and [the Office of Federal Procurement Policy] -- that this isn't just about the contracting offices." Consider informational meetings with your customers and teammates (after conducting your research, of course) rather than spending that time on the 15 minute elevator pitches.

Focus on Relationship Management

86% of consumers say loyalty is primarily driven by likability and 83% of customers say its driven by trust. These days, customers and clients are looking for a more empathetic and personalized touch. Every time you interact with your potential customers, current customers, end-users, etc. – there is an opportunity to build and strengthen your relationship. Under Category Management, the Government as a whole will become a client due to increased sharing and communication. This means people are going to talk. A dissatisfied customer will tell 9-15 people about their experience and around 13% of dissatisfied customers tell more than 20 people.

However, your Relationship Management strategy should not solely focus on the Government. If Category Management continues on its current path, the emphasis on government-wide contracts could be problematic for small businesses (SB) due to fewer resources to pursue these contracts. These procurements are highly competitive and because the contracts have long terms, there are infrequent opportunities to compete. Now more than ever, this fiscal year and beyond, Relationship Management is going to prove crucial within the Government and within Industry. Here a few tips to help focus your Relationship Management Roadmap:

• Introduce your company and start a dialogue with the Category Management Team to become educated on Category Management
• Talk to your Contracting Officers (CO), Contracting Officer Representatives (COR) and Contracting Specialist about Category Management and how you can help your customers address those needs
• Find out where you can improve from your customers and end-users – take CPARS seriously, consider program assessments mid-way through contract performance or on a yearly basis
• Focus on creating synergistic/streamlined business arrangements that show an understanding of the game

With the What, Why, Who, and Where, our bases are covered and it is time to bring it home. In my next post, the final in this series, I will conclude with the impacts that Category Management could have on your proposal shop and how to adjust your bid and proposal strategy to be prepared to meet these changing acquisition strategies. Do you have any questions about Category Management? Sound off in the comments below!