The tender process can seem complicated and time-consuming from a buyer’s perspective, but it is essential to manage it as efficiently as possible. David Noble offers his advice on how to succeed.
As a concept, tendering is a simple undertaking in which everyone involved understands where tenders come from, what information must be made available, and when and how each stage of the process is dependent on the other (see Box 2, below right, ‘A typical tendering process’).
True, suppliers often dread the tender process as it can take a considerable amount of time and expense. But it does offer an open and transparent process to ensure the best supplier wins the contract. And – if approached methodically – tendering can actually save time by preventing parties from missing vital information and then having to rework data over long email chains.
Obviously the first, crucial, step in running the tender process is to involve the purchasing department from the outset – even if it’s just the one person. But that’s only the beginning. Below I outline what I judge to be the eight main ways to make your tendering process a success.
Internal stakeholders, ie your organisational colleagues, should agree on a realistic set of requirements and timescales, with sufficient time set aside to negotiate the contract prior to the work commencing, or at a minimum, be clear on what work can be completed prior to contract signature, for example by way of a ‘work definition phase’. (A work definition phase is where you establish requirements, as seen in the ‘preparation’ column of Box 2, and highlight the scope and timings of the project so that all stakeholders know when their support will be needed. Making a business case for the project will help you clarify this.) This process should also allow time to test any suppliers’ assumptions before costs are finalised, and to switch suppliers should contract negotiations fail.
This is an extract from the Finance & Management Magazine, Issue 194, December 2011.