This is the first in a series of articles from Viridian’s project consultant, John Paul, covering the various stages of a live Competitive Dialogue procurement process. Subsequent articles will track the progress of the project, from its inception through to, we hope, contract signatures.
I can’t remember when ‘procurement’ replaced ‘purchasing’ in our management vocabulary but it had certainly happened by the time housing providers were declared to be subject to European Public Procurement regulations, affectionately known as OJEU in our circles.
Faced with an apparently incomprehensible bureaucratic legal reality, you can either put your energies into finding ways to avoid it, or embrace it and make it work for you. After failing in the former, I decided to embrace the latter.
Knowing what you want
Having experienced the downside of the traditional specification and tender approach, with the former always leaving a key thing out and the latter tending to take an optimistic view of product capabilities, I was cheered to hear favourable reports from colleagues about the new Competitive Dialogue process as the basic trouble with traditional tendering for IT applications is that it assumes that you know what you want when you set out.
As a student in the 1980s, I was introduced to Structured Systems Analysis and Design (SSADM) as the best way of solving the problem of business users not knowing what they wanted. Of course, as soon as they saw your Entity Life Histories, with their associated Entity/Attributes schedule in the Fifth Normal Form, they would instantly recognise this representation of their world.
They would then work with you to correct any errors unless you were particularly brilliant in which case they would just grudgingly sign them off. Mine must have always been brilliant as they were never changed and always signed off, often very quickly once you finally persuaded people to look at them, put a pen in their hand and moved the paper beneath it. Strangely enough, when it came testing they did not always recognise the outputs but that was okay because as we all know, business requirements are always changing.
Disillusionment, or perhaps enlightenment, soon set in and I quickly came to believe that SSADM (and my apologies to its well-intentioned and talented creators) was really deployed more as way of deflecting the blame for failure rather than achieving success.
The truth is that the introduction of new technology is always a learning process and while a vision of success is an essential prerequisite at the start, creating an accurate and binding specification too early in the process is almost impossible and is usually unhelpful. That’s the trouble with the traditional tendering approach; it fossilises detailed requirements too early, before the project team has really come together and certainly before the supplier has joined the team.
Most operational managers are involved in procuring and implementing an information system only a few times in their career, whereas suppliers implement all the time and, leaving aside commercial motivations, who is likely to know most about achieving a successful outcome?
The key thing is to recognise that we do not have all the answers when we set out to procure and implement new software. Every project is different journey and you need to have good relationships with your fellow travellers because you will need their help along the way.
Add detail as you go along
The emphasis on dialogue is what I like about the new process. Rather than starting with detailed specifications, you begin with the overall objectives and add detail as you go through the process. Naturally, you still end up with a contract to deliver specific requirements and it does take time but that allows the documentation to evolve as the understanding of all parties develops into a shared vision.
Some may say that ‘the customer is king’ and should get exactly what they want but the reality is that there are some things the supplier can do easily and very well, other things are more difficult, and some impossible with the resources available to them. Sometimes it is better to accept a limitation in one part of the application to concentrate on getting another really top notch.
Process frequency is important here. If a process takes place hundreds of times a day we want it to be very efficient and reliable, while with an annual update we can accept something a bit less glossy. All of these points of detail and priority can be thoroughly explored in the dialogue stage with the specification adjusted accordingly.
Avoiding ‘preferred’ suppliers
As well as adding more detail as the stages progress, the number of suppliers is reduced. This means that you can spend more time validating the suppliers’ responses through demos and site visits. The traditional selection approach results in an earlier appointment of a ‘preferred supplier’ but that is not the end of the process. The deal is not done until the contract has been signed and there can be a good bit of negotiation between preferred supplier status and contract signature. In the Competitive Dialogue process these discussions take place with more than one supplier but the aim is that the contract and schedules are finalised within the process itself so that you can move to contract as soon as the mandatory ten days’ ‘stand-still’ time has elapsed.
The time taken to follow the OJEU process is often seen as an unhelpful delay but it can also be used effectively to get the business engaged and prepared for the process changes that implementation will bring. I am a great believer in the ‘people, process, technology’ order but all too often IT projects start at the wrong end.
The OJEU procurement time can also be used to ensure that the right people with the right skills are involved and engaged in planning the change project. Business process mapping and re-engineering can all take place alongside the dialogue of procurement, with each informing the other. This should be an iterative process so that the final freeze needed for implementation is delayed as long as possible.
It all sounds great in theory but research from HMRC has validated this approach, albeit with the caution to not underestimate the time and resources needed. Competitive Dialogue is not right for every procurement project but where the requirements and objectives are quite complex and the range of options quite wide, it provides an excellent framework.
We are undertaking a Competitive Dialogue procurement at the moment and it’s gone very well so far. We have a good field of suppliers with a range of solutions to look at in the Outline Proposal stage of dialogue after completing the Pre-Qualification Questionnaire stage (as for a normal tender). Over the next couple of issues of Housing Technology, I will let you know how we progress and what parts of the process work best.
John Paul is a project consultant at Viridian Housing.