Accountancy firms with experience of the public sector will be more than aware of the procurement directives and procedures that go hand in hand with attempts to win a slice of the public sector pie.
Today, however, dedicated procurement experts are playing an increasing role in the selection of professional advisers in the commercial sector, as companies attempt to secure the best deals with their suppliers.
While public sector procurement is guided by legislation and specific purchasing procedures, corporate procurement is very much dependent on a company’s unique policies.
But even before you think about submitting a proposal, ask yourself ‘should we bid or not?’ From our experience, accountancy firms are less likely to win a bid if they have little or no prior knowledge of the client or their business, do not understand the decision-making process or have not developed relationships with all the decision-makers and their influencers (yes, this includes procurement professionals).
Firms are also less likely to be successful in winning the business if they don’t know the incumbent adviser and their strengths and weaknesses, or have no knowledge of how to add real value in their submission.
Pursuing a tender opportunity without having addressed these issues is not only a waste of resources but can also be counterproductive as the bid will probably fail and demotivate all those involved in it.
For the best chance of success, it is vital to form a relationship with the client prior to them inviting you to tender. Knowledge and understanding of the client’s business will not only put you in a stronger position in the pitch, it also means you could have more control over who you work with.
There may be many people and influencers involved in selecting and then, all being well, working with you. To form a relationship you need to understand them all. This involves identifying all those who influence the procurement process.
Everyone’s agenda will be different and each will have different expectations. Again, excellent information gathering skills will help enormously, as will having as many allies as possible feeding you accurate, timely information. This means building relationships with procurement professionals too.
Firms that have a successful track record in winning competitive tenders map out the key people they feel they need to get closer to within a client, then allocate individuals from their firm to build relationships with each one. In doing this they are able to really understand the individual’s motivations and get to grips with the ‘open’ and ‘hidden’ agendas of each person involved in the process.
But understanding people’s motivation alone isn’t enough. To win a company’s business you need to demonstrate the value your firm can bring. That means influencing the right people and showing you really understand their industry and its dynamics, as well as the specifics – and politics – of their business.
It’s important to demonstrate that you are keen to spend time getting to know them. Be proactive and bring things to their attention; seek ways to help them be more efficient and reduce costs.
Influencing people is not something you can do on the fly. You will need a campaign or action plan mapped out from the start, which evolves as your understanding of the prospect improves. The campaign may involve sending targeted information to the prospect, inviting them to relevant events or conducting introductory meetings.
This is a time intensive process and some firms feel they cannot allocate resources to this. But neglect this stage at your peril: by passing over relationship building and briefing meetings, bid teams are unable to amass the knowledge that will ultimately differentiate their firm and make their bid successful.
Contrary to popular belief, procurement is not about finding the cheapest adviser. The main thrust of any procurement process is to secure value for that company.
Value for money and finding the cheapest bid are not the same thing.
But while the price you put forward must be competitive, real efforts need to go into building value in the eyes of the client. The value they attribute to your solution will depend on the importance of the ‘problem’, the benefits they stand to derive from you, the urgency of their need, the number and quality of potential alternative advisers and, of course, the corporate and personal implications of getting the project right or wrong.
No matter how similar you may think one client is to another, they see their business as unique. And yet firms wrongly assume that what works for one client will be attractive to another. To be successful it’s important to really understand what expertise they are seeking from you, what added value would attract them and what they are ultimately prepared to pay.
You can get this information from a variety of sources including published information, sources within your own firm, other suppliers, and even people within the prospective client.
But the price you secure will also be determined by how much you believe you are worth. If you don’t believe you are bringing real value for money, then neither will the client.
Moves to centralise procurement could be seen as a depersonalisation of the procurement process, but in business today, people still place tremendous value on relationships. Even when there are strong contenders who, on paper at least, satisfy all the procurement criteria, companies will often retain the incumbent advisers because of the value they place on that relationship.
If you feel procurement is a pain, reconsider your relationship. Procurement professionals are, after all, only human.
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