Tender Management in 2019: Time to stop the scattergun approach
Mireille Gielians, Senior Business Consultant at HSO
Many organisations are dependent on their commercial tendering processes to win a project or tender. Each tender process is a combination of risk, project and stakeholder management. Whether you win a project or tender does not depend on coincidence, it takes a lot of control and complex management. In my role, I see that tender projects are becoming increasingly more complex and difficult to orchestrate. A solution for tender management, with which you make the complexity transparent and manageable, is, therefore, a necessity to improve win ratios and increase efficiency.
Below I share with you four top tips that will solve typical challenges that I come across in Tender Management.
- Get prepared: the importance of stakeholder management
With a new project, it is important to come to the table with the contracting party and its stakeholders as early as possible. Do you have any projects that will start soon?
If you have a clear picture of your ‘pipeline’, do you know which stakeholders are the most lucrative to your business? It is important to maintain multiple contacts with contractors, project developers, architects, and other supply chain partners during the tender process. Record details about relationships and contact history in your CRM system so that you build up history and insights to ensure that you are taking the right action, at the right time, with the correct people.
- A new way of tendering
Previously, a tender was often only issued for the execution of a project. Today, it is also increasingly common for a tender to be issued for ongoing service and maintenance that follows the project. Technical service providers and installation companies also find themselves transitioning towards a different revenue recognition model. This transition from a defined project to service via subscription, (also called servitisation), requires a different approach and involves other risks that should be considered.
Is the project with ongoing maintenance profitable? The role that a contractor plays in a project is also changing. There are often multiple third parties and specialists involved. What does a collaboration with supply chain partner X and specialist Y mean for the chance of success? Understanding historical data helps determine which type of projects and which collaborations have the best chance of winning the business and will deliver the highest return.
- The importance of risk management
Include risk management in the process so that it becomes an integral part of the tendering process. For example, accurately record who must give agreement or a go/no go decision, at what time.
- The link between the back-end and the operation
The success of a project often depends on the accuracy of risk management and prediction. Over optimistic estimates can break a project, just like incorrect calculations or unexpected circumstances (which can sometimes be detected in advance). It is crucial that these risks are identified as early as possible and, if it isn’t possible, that the potential consequences for the organisation are made clear. A tip here is to connect the project to your ERP system where you will be able to map the planning, available resources, production capacity and the workload of the maintenance department centrally, in advance.
Over the years, the above challenges have been rather ‘invisible’ to many companies. It is not a lottery, you can get smarter, through the use of technology, to gain greater control than has ever possible before. Invest in managing and securing your tender process and raise the bar to a higher level. You will be surprised to by the benefits you will experience.