Complex strategic procurements are characterised in a number of ways – by their size, value, risk e.g. ‘never been done before’, political visibility, sensitivity in the marketplace and so on.
They’re not your normal procurements, where you go to market for more of the same. They might involve procuring major IT systems and services, planes, trains, major sporting venues, but also things such as community grant programs. The value doesn’t necessarily matter – the complexity does. These procurements take up a lot of time and effort – they often account for more than 50% of annual company spend and are worryingly responsible for 90% of procurement risk.
Can we ever tame them, and make them simple?
The short answer is no; they will always be complex and need proper care and attention throughout the life of the procurement – never turn your back on them. Even the ‘perfect’ plan, travelling in a nice straight line from Point A to Point B can be knocked off course.
The need to plan upfront cannot be underestimated, with a focus on the user, system and functional requirements from the outset. This can play a vital role in helping to minimise any risk to a project’s delivery. Defining and rolling out best practice processes and ensuring procurement regulations are adhered to can also go a long way towards increasing project efficiency and ensuring a successful outcome.
Where do the challenges come from – is the marketplace your friend or the enemy?
Strangely enough, having worked on both sides of the fence as an evaluator and a bidder on large projects (not at the same time though!), I’ve experienced misconceptions from both sides about the thinking and behaviours of the other. No supplier wants to see a procurement fail, and no buyer wants to see suppliers fail. The answer – talk early and often.
Suppliers want buyers to be better informed customers, so their requests are better shaped and attract good responses. Buyers want to make sure there is competitive tension in the marketplace, to ensure they are getting the best bids from suppliers. So, hold open days, workshops or information sessions, where everyone has equal access and can contribute to the solution. You can keep talking right up to the issue of your formal request, as long as everyone can see what is going on.
Getting fit and ready for the ordeal – what to do?
Let’s face it, complex equates to scary in many people’s minds. After you’ve broken the news to your team at the Monday morning catch up that they are going to tackle a complex procurement, by the time you get back to your desk your inbox will be full of leave requests. How do you instil a sense of purpose without generating the fear?
The thing people worry about the most is that something will go wrong, and they will be blamed. Start off by explaining what won’t be happening, to cut down on the “…but what if?” questions. Then, link in the rules that you will be playing by and the principles that will be maintained.
Finally get them involved in the planning, and especially the reviews and feedback at each review point, to reassure them their concerns and ideas are being listened to.
The final bit – where do you start? (Hint: not at the start)
After understanding that you will be managing intense activity, with a bunch of enthusiastic suppliers and maybe a less than enthusiastic team, where do you start? Easy, start at the end.
At the very start of the process, you will need to be clear what success will look like for your organisation, the end point i.e. the procurement objective. This may be made up of different elements, for example social inclusion, local industry, support, cost controls etc. Develop that objective and stick that up on the wall for all to see and leave it there. Then work back from that point, making sure everything you’re planning or thinking about fits into or supports that objective. If it doesn’t, then don’t do it!
Having a clear and well understood objective provides your team with direction, suppliers with the end point for their engagement, and the upper and lower boundaries for the management of the procurement.
So, complex procurements aren’t really that bad – just misunderstood. And that’s why we are here – to minimise the risks, provide support and ultimately deliver best possible outcomes for these projects. Get in touch with the team to find out how we can help your next complex procurement.