World class organisations have a formal bid management process that includes a Bid Qualification activity in which procurement risk is well documented, but what is the risk to a supplier going into business with you? These risks also have to be considered before it starts to prepare the Request for Proposal (RFP) or begins filling in long and tedious tender documents, Elaine Porteous, tells SmartProcurement.
“Suppliers expend a lot of time and money responding to your RFP, even if you have selected them as preferred bidders. As a result they are selective in their submissions, and rightly so. Best practice in bid management is to ensure that all bids are winning bids,” said Bill Graham, renowned expert on bid management, speaking to bid managers at a Johannesburg event hosted by the Association of Proposal Management Professionals in February.
An experienced and alert supplier will ensure that a client’s requirements are in alignment with the supplier’s vision and strategic aspirations and that the client is a key part of its target market. The supplier will also identify and classify all its risks, said Graham.
What are suppliers’ risks?
During a risk review of a major and high value project what are the typical key areas that are considered by suppliers? Over and above obvious questions like:
• Have we the actual solution / service / product?
• Have we the relevant skilled resources to deliver the results?
• Will it be profitable for us?
Astute suppliers will ask the following questions before making the Go / No-Go bid decision:
• Have we the skills, resources and time to put this bid together by the due date?
• Have we a robust internal bid management process?
• Can we demonstrate the required business track record?
• Have we considered all the risks of this project (legal, BEE, financial)?
• Do we have an 80% chance of being successful?
The Bid Manager must be able to answer these questions and, if the bid is to go ahead, the right resources should be applied to the task and they need to be correctly motivated and incentivised to achieve a quality bid submission.
Market and Customer Intelligence
A top-class supplier will also qualify your RFP by focusing on external issues. It will keep an up-to-date dossier on the customer, including all financial and operational information that is in the public domain, and also some that is not! Researching companies and people over the Internet and through social networking sites is easy and delivers information that few are aware of. Competitor information is available in the same way and, depending on the outcome of the information gathering process, the decision to bid or not to bid can be made.
“Many companies chase opportunities without consideration for their winning potential,” noted Graham. Those organisations with a bid management team and documented processes in place will ensure that the decision to submit a bid is directly related to their potential to win it.
SmartProcurement is presenting a one-day technical workshop on tenders in Government, based on our successful workshop at the 2009 Publis Sector Supply Chain Summit. For more information contact Erieka Santos at firstname.lastname@example.org