Once an employer has written its project specifications, tender documents, undertaken some research and considered the providers it already knows about, what should it do next when approaching a new project?
Well, now is the time for the organisation to evaluate its business needs and objectives and clearly define them. Using its stakeholders to map out priorities will help it to build strong foundations with providers.
The next step is for the employer to rate its organisational needs in order of importance. Is it quality and reliability or speed to market and flexibility when change inevitably occurs that it values most?
Value for money for organisations struggling with tight margins may also be important, while others may prioritise a strong service proposition, a good cultural fit or good risk management and fraud controls. Each employer will have its own specific needs.
Variety of sources
Research can include a wide variety of sources, as well as an employer’s core stakeholders. Employers may consider referrals from partners or current providers, talking to trade associations, perhaps business advisers and business support organisations, or attending sector-specific exhibitions where they can compare, quickly and easily, the number of providers available for their key needs.
The research stage can help employers to not only whittle down the number of providers, but also help them to get under the skin of potential providers offering important products and services. A concise request for information (RFI), a business process that details a provider’s capabilities, will give employers a lot more information about their final provider choices.
Strengths and weaknesses
The RFI is an opportunity for providers to clarify their strengths and weaknesses, their capabilities and subsequent fit with an organisation, their growth plans and, of course, financial information to ensure the employer is not forced to bail out a key provider when times get tough. Only then should an employer send out a request for quotation (RFQ) with its full specification.
Employers should always meet their chosen providers and audit regularly once they have signed on the dotted line. Developing good relationships is important throughout the life of a contract; this stage is just the beginning.
David Noble is group chief executive officer of the Chartered Institute of Purchasing and Supply