Thursday, 9 October 2014

TLC - TENDER, Loving Care

Authored by Fayaz Haq

GITEX Shopper, the region’s biggest and best consumer electronics event wrapped up last week. Many power retailers and global brands took the opportunity to launch their latest and greatest products; the iPhone 6 being no exception.

Coming back to work this week, discussions around the office were clearly focused on technology…probably post-GITEX fever, as they say. A couple of colleagues were proudly showing off their iPhone 6’s which gave me the opportunity to probe them on their reasons for willingly dishing out over $1,000 to purchase one. The first person raved about how the iPhone 6 was so much bigger (yet thinner), so much more powerful (yet having a better battery life) with the most stunning HD display than ever before…and then repeated himself by mentioning everything in an almost perfectly reverse sequence. And that was it! “Reaaaaally?,” I thought to myself. It almost felt like one of Sir Jony Ive’s videos. I remember thinking, “well, isn’t the basic premise of a brand introducing a new model to be better than its predecessor?” So some product upgrades and marketing gimmicks were sufficient for this person to happily spend their money.

The other guy is a Graphic Designer, i.e. one of those people that are always in denim and a black v-neck tee, has a fancy iMac and you’re always wondering what they keep doing in Final Cut Pro! Clearly the whole Apple ecosystem being seamlessly integrated with this person’s hardware devices (at home as well as in the office) was what drove this person to make their investment decision on the new iPhone.

This whole conversation got me thinking of questions such as, “What is the best supercar in the world?” or “Who is the best athlete in the world?”, or even “Which country would you like to live in?”

Rest assured; responses to such open ended questions will vary from one person to another. Each time subjectivity is introduced into the equation, the outcome will be far from consistent. In such situations, individuals assess and process information at hand based on their interpretation of their requirements or experiences prior to forming an opinion.

On the other hand, consider the following scenario. As a child passes through their schooling life, they go through a series of assessments where clear marking guidelines and standards are set up by a governing body for educators to follow. Teachers will objectively evaluate a student’s response on a test against a clearly defined standard that identifies the appropriate marking scheme for each question in order to derive an outcome. When the results are summed up, the student is assigned an overall mark or grade.

Many other day to day examples can be considered such as the exact mixture of ingredients when a pastry chef is baking a cake to ensure that it turns out as expected (both from the way it looks and tastes), or a parking warden inspecting the validity of parking tickets and issuing fines to vehicles with expired tickets.

The story seems to be a bit diluted when it comes to evaluating responses to tenders. Having been given the opportunity, over the last decade, to work both within a procurement function as well as with clients in my role as a consultant, I’ve had first-hand experience into the manner in which evaluations of a supplier’s tender response are conducted. In some cases (and regardless of commercials), end users based their technical evaluations on subjective factors such as the comfort level and convenience of previously having dealt with a supplier or factors such as personal relationships. In others instances, technical evaluations were conducted by comparing suppliers’ responses between one another.

While comparing commercials (or total cost of ownership) responses to a tender between suppliers is the right thing to do, technical submissions should also be compared against pre-defined, clear, and objective evaluation criteria or scoring grades. This ensures accuracy, consistency and reduces the overall evaluation period. This also supports the creation of clear and concise agreements to help end users better manage contract milestones and monitor supplier SLA’s.

Is following a structured an objective process in evaluating a supplier’s response to a tender to do with the maturity of an organization? Is it the way that the procurement function is positioned in the boardroom and the manner in which procurement policies and procedures are (or aren’t) clearly understood throughout the organization? Does it have to do with proper planning and taking the time upfront to develop clear and structured evaluation criteria? In carrying out evaluations and making decisions, does adding professionals into the mix make a difference?

I’d love to get your feedback on how supplier evaluations are conducted within your organization and whether you feel the processes you follow delivers value to your stakeholders.

Conveniently sent from my iPhone

1 comment:

  1. Tender evaluations should always be conducted using strict and non-judgemental processes This is where the evaluation criteria and methodology come into place. The process for evaluation is significantly different when comparing Public and Private entities however. On the Public side, it is required to provide all criteria and sub-criteria to all bidding representatives for response. To make the bidding compliant in either case, a template should be used for each evaluator's response, and the responses should be tallied as a whole in order to alleviate favoritism or collusion. Be consistent in having a group of individual evaluators from different areas of the project to ensure the full scope of work is considered. This will ensure you are fairly evaluating a project before it moves forward.