What’s wrong with formality?
Commissioning a new web project is a big decision for most clients and one that needs to be approached with care. There’s potentially a lot of time and money at stake. A successful project can have a big positive impact on the organisation’s reputation, finances and wider goals, so there is a high opportunity cost in choosing between a bad, average or excellent supplier. It’s therefore sensible that measures should be put in place to maximise the chances of selecting the best supplier for the project.
Every organisation has its own process of selecting an agency to partner with on projects, with some being much more formal than others; most commonly with government departments, NGOs and large corporations. I’ve got about 15 years of experience dealing with tender processes, and I have seen that even though formality is well intentioned, it rarely, if ever serves the best interests of the client. So why do clients insist on such formal processes? For two reasons:
- To increase the chance of project success in terms of quality, timeliness and value for money by ensuring due diligence is done, and limiting any chances of human error in the selection process.
- To ensure that there’s accountability in the process, minimising the chances of corruption or bias.
The problem is that the formal processes put in place to achieve these objectives simply don’t work.
Jumping through hoops costs time and money
When a formal invitation to tender (ITT) or a request for a proposal (RFP) lands in the inbox of an agency, you can guarantee that no matter how exciting the project, it will be accompanied by a sinking feeling and a roll of the eyes. Who is going to draw the short straw and have to navigate through the bureaucracy?
There’s no two ways about it: formal tender processes take up a lot of time for everyone involved. They’re designed to make suppliers jump through hoops, read extremely boring documents, fill in mind-numbing forms, and justify details that sometimes have nothing to do with the project.
The side effect is that, although it may be uncommon to admit it publicly, in private most agencies add a premium onto the cost of any projects with formal and bureaucratic tender processes. And why shouldn’t they? Jumping through flaming hoops can be extremely time consuming, and the chances of success can be low. Somehow the project will need to pay not just for the extra time incurred, but also the extra time incurred on other formal tenders that the agency didn’t win.
Just think about that for a minute. One of the goals of the tender process is to ensure value for money and yet the process itself adds significant cost to the project. Isn’t that counter-productive?
I’ve spoken to several agencies who admitted privately to doubling or even tripling quotes that are subject to very formal tender processes. We don’t go to that extreme at Wholegrain, but if we think the tender process itself is unusually time consuming and will add a real cost to our business, we will openly add a premium that we think is fair. Considering that formal tenders are standard practise for government contracts and common in the non-profit sector, this is a terrible waste of money for taxpayers and charity donors.
As an agency owner, I can say that although it’s great to win high budget projects, we don’t want to earn money from form filling and bureaucratic box ticking. We want to earn money for our creative and technical skills, delivering true value to the client.
You can’t talk to a form
At the heart of any formal tender process is an assumption that everything that matters can be achieved with forms and contracts. Ask detailed, standardised questions, then back them up with detailed, rigid contracts and you can’t go wrong. Can you see the flaw in this assumption? This assumption overlooks the single most important thing in any project: human relationships.
Relationships are the foundation of all projects, and they are what truly define success or failure. When the client and agency have great rapport and are truly on the same page with aligned interests, the combined project team can be unstoppable. But without that strong relationship,no amount of documentation can force the project to be successful.
It astounds me how many times we respond to an ITT or RFP asking if we could meet to discuss the project and are told that it’s not permitted in the process. If we are lucky we might get a single phone call in which we are expected to ask our questions.
In some cases the entire scope of communication pre-proposal is limited to emailing questions within a defined time window, and to have the answers in writing at the end of the window. No human interaction, no real communication or dialogue. It is essentially impossible to establish any human relationships or to understand the various stakeholders in any depth when they’re hiding behind the wall of bureaucracy, resulting in proposals that don’t best address the clients real needs and neither side knowing if they can work well together.
This is not a recipe for success.
Concealing bias towards preferred suppliers
The people who design tender processes might think that the best way to eliminate bias is to eliminate human interaction, but what it actually does is exaggerate any existing biases. That’s why it’s so common for the outcome of the pony trial to be that they hire the people that they already knew. The people that they wanted to hire in the first place – the only people who they have ever had any meaningful interaction with.
It’s rarely possible for the client to publicly admit that they have a preferred supplier, but it is incredible how often they do. And why shouldn’t they? It’s natural that the client would have a preferred supplier if they already have a positive, mutual working relationship. I will admit that sometimes we’re on the beneficial end of this, but we have to be honest that it makes a mockery of the tender process. Bidders who are not the preferred supplier and are not told so, are unfairly encouraged to waste their time bidding for projects that they have little or no chance of winning. The impact of this is that good suppliers get disillusioned and don’t bid for future projects.
Instead of eliminating bias and corruption in the procurement process, the formality of the process can actually exaggerate it and make it easier to conceal it. It would be much more healthy for everyone to simply be transparent about existing relationships and acknowledge the value that they bring to the project.
Ruling out the little guys
One of the side effects of formal tender processes is that they rule out a lot of small suppliers for two reasons.
The first reason is that small businesses often don’t have the resources to be able to invest the time required to complete the process, nor the necessary experience in ticking the right boxes.
The second reason is that these processes often contain stringent requirements that can be difficult or impossible for small businesses to comply with, even though they are often not actually important to the project. The result is that bigger businesses which are geared up to navigate this type of tender process, and have everything in place to tick every box imaginable, will have an inherent advantage, even if they aren’t the best fit for the project.
Prescribing a solution
Anyone involved in design will know that the best briefs are those that describe the problem but do not prescribe the solution. They acknowledge that solutions are the outcome of an effective design process and by definition should not be dictated in the initial brief.
However, many tender processes are incompatible with good design practices, not only because they dictate the solution, but because they sometimes fail to even correctly identify the problems to be solved. How can a project succeed under such conditions?
There are better ways to mitigate risks in projects
The objectives of formal tender processes are to ensure the fair selection of the best supplier for the job. While formal ITTs and RFPs are undoubtedly well intentioned, they rarely deliver on these objectives.
If we want to achieve these objectives, then we need to take a very different approach by following these principles:
- Transparency – Being open and honest lays a good foundation upon which to develop successful projects and avoid any risks of bias and corruption in the process. The client organisation should be upfront about the objectives, what is known and unknown, and the nature of any pre-existing relationships with suppliers.
- Dialogue – With strong working relationships being at the heart of all successful projects, it is essential that the procurement process prioritises the development of relationships, and that requires dialogue. If the process is designed properly, it should be possible for all serious bidders to get to know key stakeholders and discuss their proposed approach before submitting a formal proposal, and the final proposal should really just be a formality.
- Discovery – It should never be assumed that the solution is known without having gone through a proper design process, and so it makes no sense to ask for a fixed quote to build something that is not yet known. The discovery and design process should be separated out and completed as a standalone project before anyone is asked to quote for implementation of solutions.
- Simplicity – The tender process should not be difficult or complicated for the sake of it. A good process will be as simple as it can possibly be while obtaining the information required to make an informed decision. This makes bidding more accessible to smaller suppliers and saves everyone time, which ultimately translates into cost savings.
A more human approach to tendering
Web projects can be costly and time consuming, so it is absolutely right that organisations want to minimise risk and put measures in place to help ensure a positive outcome.
The reality, however, is that many of the techniques used to reduce risk in formal tender processes actually result in projects with a reduced chance of success; whether it be from increased cost, solutions that are not truly aligned with needs, or missing out on the best partner with whom to work. Although many organisations need to be able to document a fair and structured process in choosing suppliers, formal tender processes rarely deliver the best outcomes.
A more human approach that involves open discussion between all stakeholders, a process that is achievable for even the smallest suppliers and the ability to test the relationship and identify the best solutions before going all in will deliver much better results time and time again.
And of course, if you want a shortcut to a world-class WordPress website, call us on 0207 112 8240, or email us here and we can have a real, human conversation :)