There’s a major change happening in local government IT procurement – and it started well before COVID-19 came along and, as discussed on this site, reduced the amount of red tape involved in purchasing. This change relates to the criteria on which the tender submissions themselves are assessed.
It is rarely articulated explicitly, as most tender documents still follow a standard structure, whether due to compliance or habit. However, it is having an increasing impact on how IT purchasing decisions are made and is likely to grow in importance as buyers understand how to evaluate it as part of the tender process.
A fourth element of procurement: people
Local government IT proposals have traditionally been evaluated on three factors: does the submission meet the criteria set out in the tender, is the price competitive, and is the tendering organisation a viable business to work with? These criteria are based on the guidance set out by the Crown Commercial Service (CCS), which states: 'The over-riding procurement policy requirement is that all public procurement must be based on value for money, defined as “the best mix of quality and effectiveness for the least outlay over the period of use of the goods or services bought”.'
However, in tendering for and winning many such contracts with Fordway over almost 30 years, I’ve identified that a fourth leg has recently been added to the three-legged procurement stool: people, or what I term the ‘Human Factor’. This has been confirmed in debriefs for tenders both won and lost.
Local authorities are increasingly realising that a technically sound, value for money proposal from a qualified organisation is not enough. The people they will be engaging with across the spectrum matter just as much to its overall success, and are key to delivering the value that local authorities and ultimately their residents demand. Today, delivering effective IT services in local government is as much about partnerships and people as it is about technical competence. As a result, procurement and IT teams alike are giving more weight to the question: 'Are these the people we want to do business with, and would we be comfortable working with them for the duration of this contract and beyond?'
Meeting the unspoken criteria
The human factor is difficult to quantify in a traditional tender evaluation system. It’s a combination of values, alignment, understanding and communication, and all of these can be difficult to unpack. However, we are starting to see more open questions in tenders, which enable respondents to demonstrate that they have a deeper understanding of what lies behind the technical criteria and how they would address those 'soft’ factors.
Each authority is unique, serving a different population and with different priorities and challenges. Vendors now need to show that they understand the organisation they hope to work with: not just its IT strategy and systems, but how it functions, its vision for the future, and why its requirements have developed in a specific way. They also need to demonstrate excellent and transparent communications skills, which are key to a successful working relationship. A strong proposal will respond to these unspoken drivers as well as the stated criteria and, as we are increasingly seeing, will be evaluated accordingly.
Do we share similar values?
Values are perhaps the most straightforward aspect of the human factor for vendors to articulate. Every supplier has its own character, from large corporates to the SMEs that GCloud was designed to encourage. By meeting potential suppliers face to face, whether in person or online, and looking closely at the case studies that they provide, local authorities can gain a deeper understanding of the values of and personalities behind each organisation.
And as we all know, size matters. A large company may be viewed as a safe pair of hands, but can the right people be contacted, not just departments, if an issue arises, and is the project large enough to really matter to them? A smaller company may be fast-moving and say all the right things, but is it too dependent on a single individual, potentially leading to a single point of failure? What is right for one local authority will not suit another. Getting the balance right is critical to long term success.
For example, we bid successfully to an organisation which had been disappointed by the service it received from a large supplier. In their debrief, they told us that while our proposal was relatively similar to others they received, there were two key differences: competitive pricing, and a better level of overall service, with the ability to speak directly to the right people at the right times.
Perhaps the move to more remote working for both local authorities and IT suppliers has helped to crystallise the importance of the human factor in business. It will be interesting to see how this manifests itself more explicitly in future IT tenders.
Richard Blanford is chief executive of Fordway