The most important relationship in tendering for complex services is that between the internal client and the outside provider, a webinar was told.
Paul Vincent, managing director of Insight Sourcing Solutions, said defining need was critical to success.
“If you get this wrong, everything that follows will undoubtedly be wrong,” he said.
Speaking during a SM webinar on how to tender for complex services, in association with Comensura, Vincent said to develop a scope of work six questions needed to be asked:
1. What is the reason for the service?
2. Can you describe the service?
3. What are the roles and responsibilities?
4. What are the expected standards and performance?
5. What is the period of performance?
6. Where will services be provided?
Vincent said the role for procurement was to get involved at the right time, ensure best value for money, protect risk and “create real value for internal customers”.
“From a procurement perspective one of the challenges is being an integral part of the overall process,” he said.
Vincent said the best way to do this was to anticipate business needs, help shape the scope of work, track the market and to focus on outcomes not price.
Jon Milton, business development director at Comensura, recommended buyers identify gaps in their understanding, bring in consultants as required and talk to service providers.
“Very few buyers understand total cost,” he said. “It’s worth getting expertise from suppliers in this area.”
Milton said buyers needed to assess bidders carefully. “Ask bidders difficult and uncomfortable questions. This should help you scratch through the sales veneer,” he said.
Victor Hernandez, global sourcing strategist at IBM Procurement Services, said “in complex services the supplier has the power”, but this could be returned to the buyer by clearly defining the scope of work. He also said it was important to set aside the right amount of time for the tender, typically between one and three months.
To listen to the webinar again, click here.