Procuring New IT – It’s not about buying
Why are so many membership organisations still struggling to procure the right CRM or website at a budget they can afford? Why are the better IT suppliers in the sector so often frustrated at the process they have to go through in tendering – and often pull out?
There are many reasons – and whilst there are pockets of good practice, we are still seeing too many examples of poor procurement strategy and approaches.
Fundamentally, successful IT procurement isn’t about buying, it’s about discovery – how you discover the best IT solution for your organisation. That discovery process includes all the elements you need to address – functionality (will the system meet the need or solve the problem), relationship (is this supplier the right one for you) and of course affordability.
The discovery process has to be both comprehensive (you don’t want to miss something good) and efficient (both for you and potential suppliers).
A formal structured tender process is a good way of ensuring competition and value for money – but it should be towards the end of the process not at the start. I suggest that you should only invite suppliers to partake in a formal tender when you are sure that they have the potential to deliver what you need – otherwise you are wasting your time (and money) and theirs.
The key to successful procurement is what you do in advance of your tender process – understanding your own organisation (strategy, need to be addressed, appetite for change, resources available etc.) and understanding the market (products, suppliers, technologies and costs).
Typical examples of poor practice we’ve seen recently in the sector include:
- Random tendering – large tender lists with no clear procurement strategy. If you end up with the best solution it will be purely by luck.
- The 300-page tender document – over-specifying what you think you need and not allowing suppliers to demonstrate what their systems could achieve for you. A busy supplier (often the better ones) will not bother to respond.
- A tick-box approach to evaluation – rigid adherence to some pre-defined process that ignores context (a frequent feature of public sector purchasing) almost guaranteed to deliver the wrong outcome. (I heard this week of a supplier who responded to tender questions with ‘as above’ as the information had already been given, who then scored zero because the tender response had been split up and the question evaluated in isolation by a different person!)
- Unaffordable tenders – tender lists have been compiled without any real understanding of the market. Wasted time for everyone involved when none of the responses can be progressed.
David Hart is one of the leaders of the Masterclass "CRM and Digital Transformation for Associations". View the next one here.
In E AND H we have developed procurement processes for the membership sector that are both effective and efficient. We maintain contact with all the leading suppliers – understanding their products, strengths and weaknesses, whilst remaining completely independent. If you would like some advice or assistance with your understanding of the market and procurement strategy then please contact me at firstname.lastname@example.org.