Managing risk: why should I?

Estimated reading time: 2 minutes

Hopefully by now you’ve seen our ‘4 Tips for Managing Risk with your Bidders’ guide, or read a couple of our associated blog posts. But let’s take a step back for a moment – why should you be concerned about managing risk with your bidders as part of your procurement process? What have you got to gain by doing so?

Here’s just a few reasons why it’s so important and the differences it can make:

It allows for innovation

Adopting a flexible attitude and approach to fixing your requirements and managing risk can enable innovative solutions to be proposed. On the flip side, failure to do so can result in cost-effective solutions being inadvertently closed down by restrictive or prescriptive requirements. Successful risk management may well be the answer to encouraging creativity (and better bids) from your bidders.

It encourages open and honest engagement

A bidder’s willingness to be open and honest is likely to be related to how risk-mature you are as a buyer. By learning how to successfully manage risk with bidders, you can therefore simultaneously encourage better engagement for enhanced procurement outcomes. 

It can positively impact your costs, the quality of the services you buy and your delivery time

During your procurement your ability to effectively manage risks with your suppliers is likely to have a big impact on these three things (cost, quality and time). Invariably, you will be paying for the risk somehow – either because the risk is explicitly retained by you or because the risk is owned by your supplier but they have “priced it in” to the contract. It’s therefore well worth carefully considering risk and how you best manage it, so that you can take control.   

Whilst we can drill down into specific examples like the above, ultimately our key takeaway here is that the entire success of your project will depend on how you work with bidders to develop solutions that reduce your risk. So, what are you waiting for? Download your copy of the guide now for our 4 top tips on how to best do so.