I would like to touch on the above topic in this week’s article, as IT Procurement is a very delicate process. The nature of IT Procurement ranges from hardware, software, support services, licences, surveillance services, IT Security, IT Standards & Compliance, etc. It would normally involve big spending and significant budget allocations to implement. Moreover, it is an area that most people may not understand due to its technical nature.
Therefore, the IT Procurement process must be handled with utmost integrity, transparency, and efficiency because people may easily be sceptical of things they do not understand. Even in the current state, getting approval for IT spending is so hard as if the internal IT people are making a profit out of these purchases. This scepticism came from not understanding, and good IT Procurement practices will keep this suspicion at bay.
The success of a good IT Procurement process would also be dependent on the doers or the people who are handling it for a company. You may not realise but any deficiencies in the IT Procurement practice will impact the company’s image as well as the integrity of the Staff. This is because when it involves money and spending, it is something very sensitive in nature.
Do your homework
The essential item when inviting vendors to provide proposals or quotations is the Scope of Work or the Requirement. There were many cases where the IT Procurement team would just get this Scope or Requirement from one vendor before editing a bit and sending it out as the organisation’s Request for Quotation (RFQ) document. This is just pure laziness and not good practice. Why?
- This will give an advantage to the vendor whom the Scope you have taken as the base because they might put in features that only they could deliver. This will not be fair to the other vendors who had been invited to participate.
- If the same vendor whom the Scope you have taken did not get the project, will they keep quiet? They will surely complain because their scope is being used as the base to be sent out to all potential vendors. This would tarnish your company name badly.
Nevertheless, it is normal if you seek advice from the Principle or the Distributor because usually, they are not allowed to engage the Customer directly. Then, it would be fair as all the Resellers would compete on the implementation services and the added values that they would be able to offer to us as their customer. Else, please leverage on your IT Team knowledge to draft out this requirement as they are the Subject Matter Experts.
You should be neutral in the selection process and not favour any specific vendor, even if the vendor is the incumbent for that service. This is because you are acting on the interest of the company. Should there be a new company that could offer the same service at a more competitive price, then it would be good for the company. Besides, if the incumbent track record is flawless and meets all the expectations by our company, then they have nothing to worry about. It is also part of the weightage being considered for that service renewal.
All the processes must be transparent especially when we are dealing with a Tender process for big projects. It is normal for a project where the Management would request for a revised pricing when all the submissions exceeded the project budget allocated for a particular project. When we arrive at this juncture, we should either:
- Request every company to revise their price to the maximum that they could, with the understanding that we do not want them to compromise the quality of the services being delivered only because they need to cut costs. Or,
- Request every company to revise their price with the range of budget that we would provide as a guideline. For those who feel that the budget range is not achievable, they should withdraw from participating.
The key is to request from everyone to revise and to provide everyone with the same scale or information.
Being fair is to treat everyone the same. There is no special treatment or leeway being given to any companies just simply because they have track records with our company. For instance, if the deadline of the Tender Document submission is at 1.00 PM and to be put in the Tender Box, we should:
- Not to consider any late submission beyond 1.00 PM due to whatever excuse because all other companies were able to deliver on time and had taken the efforts to make sure it arrived on time.
- Not to consider any couriered documents because the requirement is for the participants to submit and put in the Tender Box. There were cases that I encountered in the past whereby they blamed the courier for being late and asked for a leeway to not being disqualified from the Tender bid.
Being fair is also by evaluating the Tender based on your domain knowledge. That is why in the Tender process, we usually break it down into the Commercial section and the Technical section. This is for the IT to concentrate on the technical requirements and the viability of the proposed service implementation without having to be cautious about how much it costs. The Commercial section would be left to the Finance representative to evaluate as per their domain knowledge.
No personal interest
This is why some organisations implemented the “No Gift Policy” to avoid any Staff being influenced or exposed to any unethical conduct. Trust me, even if the vendor secretly sponsors you and your team to play golf or anything as goodwill, there will be noise and people will talk behind your back. Your name and integrity would be tarnished, regardless of whether you were the one asking for the treat, or the vendors were the ones proposing to give you and your team to treat as a token of appreciation.
The vendors should also uphold some etiquette even though the race to secure a project is so crucial, especially post-pandemic.
Quality of delivery
The vendor should always be concerned about the quality of delivery. You must not compromise the quality of delivery for the sake of getting the project. It will not only impact your customer at the receiving end but also your reputation as the vendor. All calculations must have included the profit margin and the lowest figure that you are able to tolerate. If the customer’s budget is not realistic and does not make sense, it would be wise to withdraw from participating rather than delivering a poor-quality service. In this case, the Salesperson should know their boundary and not unnecessarily promise the moon and the sun in the sky just to win the contract.
It is a big cake that everyone can share and hence please keep it as a healthy competition. There were cases I encountered in the past where a vendor (Reseller) came and asked us as a customer to write to the Distributor not to give any special rates to their competitors.
The request was absurd! Though you were the incumbent and knew the IT personnel inside the organisation that issued the RFQ, that does not give you privilege to downplay other competitors. As the customer, we were very transparent with our requirements, what happened in the background and whether who had got a better deal from the Distributor was not our concern. At the end of the day, any vendor that was able to give the best services at the most competitive price should deserve to get the project.
Please always be professional. Winning or losing the bid is just part of the process. Do not become a sore loser and badmouth the winning company at other places just to ruin their reputation. Do not spread false news about the company that issued the RFQ i.e., the vendor that won the contract is a close friend of the IT Head, etc. The IT world as I mentioned is not that big. Whatever bad things you tell other people will eventually reach the person you were talking about. It creates a very unpleasant environment and destroys your chance to be invited for other projects from the same company.
Right the wrongs
The IT Procurement process should not only be handled with integrity, but must be seen as being handled with integrity. A proper documentation and transparent process in place would help to achieve this and to close any potential room for dispute or suspicion. We are living in a small world, let’s work together to right the wrongs because we may end up being on the other side of the coin one of these days. A vendor may become the customer, and the customer may end up as a vendor.
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- 07 Nov 2022
- By:Eugene Chung
- Category: WEME
How do Cybersecurity sales convince prospects to trust their services and/or products? Learn more about it from ArmourZero’s mentor and expert Eugene Chung.