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News and commentary from our Team.

Our Business Lifecycle Process

Our business lifecycle governance process formalises our approach to value creation and managing the associated risks. It helps us to:
- determine what market we want to be in
- tender successfully for contracts that add most value
- effectively deliver these contracts to deliver this value
- retain and develop these contracts

Identify Opportunities
Firstly we look for markets that:
- offer multiple contracts and good growth
- provide appropriate margins and cash-flow
- allow us to differentiate ourselves from the competition
- offer the opportunities to build long term relationships

Once we know the market is attractive, we identify opportunities to pursue. We then evaluate the quality of each opportunity, including:
- our understanding of the customer’s business and vision
- their funding for the project, and
- how likely they are to procure.

For further information on our selection criteria, see the previous Blog Post.

Tender Selectively
Bidding can be expensive and take many months, so we only bid for opportunities that meet our criteria and where we have a strong chance of winning.

The bidding stage has numerous steps, from our pre-qualification, to being shortlisted, to our final tender. During the process, we develop a detailed solution for the customer and test it thoroughly. At every step, we review the opportunity and confirm that we want to proceed.

Once the customer selects us, the final step is to negotiate and sign the contract.

Execute Contracts Effectively
Effectively delivering a new contract is absolutely vital. As we implement the solution we designed during the tender process, we ensure that the right planning and controls are in place to effectively roll out the contract.

We design the necessary management, quality and IT systems to ensure the key objectives of the contract are delivered. We transfer knowledge from the design team to the contract management team, and continue to strengthen our client and stakeholder relationships.

Deliver Operational Excellence
We aim to deliver operational excellence and continual improvement.

Passing responsibility to our contract management team allows them to innovate and respond to our customers’ needs. It also makes our business scalable, enabling us to manage a growing contract portfolio.

Working in the right way helps us to build long-term relationships. This often leads to the customer expanding our contract during it's life, which is important for our growth. It also positions us to win the contract at rebid.

Our long-term relationships and quality of service generally place us in a strong position when contracts are re-tendered. Given our stringent selection criteria, we will almost always re-tender and aim to retain in excess of 95% of contracts.

We approach the re-tender as if it were a new contract, designing ways to deliver even greater quality and productivity. Often the customer requests more services over a longer term, so a rebid can be considerably larger than the original contract.

Once we have secured the rebid, we return to the contract delivery phase, bedding-in our innovations and any new services we have taken on.

Our Tender Selection Criteria

Tendering can be a costly drain on resources, so it is important your company identifies all relevant opportunities, and submits tenders for those that have the highest probability of success and payback versus those that do not. This article outlines the tender selection process that every company should conduct, either formally or informally, as part of the bid/no-bid decision-making process.

The following is a list of criteria which each opportunity should be evaluated against:

Corporate Direction Match
Refers to how consistent an opportunity is with your core business or corporate direction for new business. Companies have a much higher probability of winning and successfully delivering when an opportunity is consistent with their core business and strategic direction. One way to make this assessment is to honestly ask yourself, “How perfect of an example is this opportunity in relation to the kind of new business our company is seeking?”

Competitive Environment
Refers to whether you or your competitor is perceived by the customer as the solution leader and is favoured as the solution supplier. Opportunities where the customer perceives your company as the leader and is the favoured supplier (for reasons other than price) are highly desirable. Customers may have this perception due to technology, reputation, past experience, industry commitment, and so on. Of course, the customer may perceive your competitor as the leader for the same reasons.

Revenue Value
Refers to the euro value of the opportunity. The intent is to distinguish “small” from “large” revenue opportunities. Obviously, this needs to be assessed in the context of the size of your company and the typical size and currency of new opportunities. Since exact pricing has yet to be developed, you must develop a best estimate and focus only on near-term revenues, such as those likely to be generated in the first year of contract delivery.

Potential Profitability
Refers to the likely margins on the business given the competitive environment and what it will take to win. Most companies have guidelines on profitability of new opportunities, which should serve as the basis to assess how “rich” or “poor” the margins are likely to be. Be sure to estimate this based on the near-term margins and do not include margins on future business.

In-house content
Refers to the percentage of the products or services which will be provided by your company. Frequently, opportunities require some outside supplier product or service; however, ideally all or the vast majority of the products and services are from within your company. You will always have a higher probability of success with what you know best, which are products and services from your own company.

Future Business Potential
Refers to the degree to which an opportunity will impact additional business beyond the scope of that specific opportunity. For example, an opportunity may provide the means to gain a new account or protect an existing account. Consider the degree to which specific identifiable future business is dependent upon winning and successfully delivering this business.

Resources to Bid
Refers to the amount of resources required to bid and the impact the pursuit of this opportunity will have on other opportunities being pursued. Opportunities do not exist in a vacuum and all companies have resource constraints, so one needs to consider the “opportunity cost” of not pursuing or jeopardizing other opportunities. Conversely, you may have resources or assets that are idle, which you want to keep engaged and active to positively impact resource or asset use.

Probability of Success
Refers to the likelihood that you will win the business versus one of your competitors.

Collateral Benefit
Refers to the degree to which pursuit of an opportunity will improve the existing skill level or develop new skills that will benefit other opportunities for future business. Since additional work typically improves existing skill levels, consider the degree to which this opportunity will exceed the norm or have a wide-scale impact on a large population.

Overall Strategic Value
Refers to the overall need to win the opportunity as assessed by the sales manager or key account manager. This should be based upon consideration of all of the opportunity elements, along with any other tangible or intangible aspects of the opportunity that are considered relevant.

Elements of Risk
Refers to the risk with regards to your company’s ability to deliver the solution to the required schedule. Are there non-performance penalties in the contract, and how do these stack up against your company's feasibility to deliver? The more experience your company has in projects similar to the opportunity, the lower the risk.

New Public Procurement Rules

The Government has introduced new guidelines aimed at making it easier for small businesses to tender for public contracts.

The new rules, which were announced yesterday by Minister of State with special responsibility for Public Service Reform and the Office of Public Works Brian Hayes, provide for the sub-division of larger contracts into lots, where possible, and for the setting of relevant financial capacity, turnover and insurance levels for tendering firms proportionate to the circumstances of a particular contract. They also urge buyers to provide for the formation of a consortium of smaller businesses to allow them to bid for public contracts.

The guidelines instruct public sector buyers to analyse the market before tendering to better understand what is on offer, the capabilities of SMEs and the competitive landscape. To encourage innovation, tender documents should also indicate if buyers are prepared to accept reasonable variants to the specifications.

“The reform of public procurement is a key element of the public sector reform programme,” Mr Hayes said. “Our goal is to ensure that it gets easier for businesses to engage with public procurement while at the same time driving improved value for money for the taxpayer.”

The guidelines were mostly welcomed, with Minister for Public Expenditure and Reform, Brendan Howlin noting the purchasing power of the public sector, which spends more than €8 billion every year on goods and services.

“The measures announced today will further improve small businesses’ access to the public sector market by making government procurement more SME-friendly, reflecting not only the vital importance of SMEs to our economic recovery but also the significant value these suppliers are delivering to all parts of the public sector,” he said.

Business lobby group Ibec said the guidelines were a welcome step, but warned that they were just a start and more would need to be done.

“A level playing field is needed for all companies bidding for public contracts. The new initiative is a welcome step towards reducing unnecessary barriers that limit the ability of small companies to compete effectively in the process,” said Ibec enterprise executive Aidan Sweeney. “To achieve the priority of better government, it is vital that these new changes are adopted by buyers right across the public sector. However, these new rules are just a start. A national strategy with the specific aim of developing a procurement culture, inclusive of SMEs is now required.”

Isme, the Irish Small & Medium Enterprises Association, was equally cautious, saying more would need to be done to help SMEs obtain government contracts, and called for real action.

“The bottom line is that the national procurement system must be designed with a ‘long term vision’, ‘whole life cost model’ and from a ‘think small first’ perspective, whereas, to date, it has been guilty of simple ‘blind bureaucracy’,” said Isme chief executive Mark Fielding.

He called for the Government to introduce an ombudsman who would hear complaints from SME suppliers in the public procurement process.