Buying intentions and motivations
Chris Cliffe, director of CJC Procurement, said, “Start by understanding what’s wrong with your current products and services. Too often, the procurement trigger is based on a poor relationship with the current vendor and misplaced assumptions that the product isn’t fit for purpose without actually exploring the current product roadmap or investing time to understand and develop a productive supplier relationship.
“If a new system really is required, make sure you spend enough time focusing on your end game, defining the outcomes and describing the purpose of the new system in detail. Clarity regarding your objectives, directly linked to your business strategy sounds obvious, but is rarely fully explored. Include senior business stakeholders in your analysis and keep asking ‘why’ until your business case is absolutely rock solid.”
Roger Birkinshaw, housing director at Northgate Public Services, said, “First of all, get the data you need to understand who your customers are, what’s important to them, what support they need and how they want to communicate with you. You also need detailed information on your housing portfolio – what condition it is in, whether properties meet the latest regulatory requirements, what investment will be needed to ensure compliance. These insights are vital for making informed IT procurement decisions.
“Although procurement can be a tricky path to navigate, when housing providers build strong relationships with their potential IT suppliers early in the process, they will have a much clearer understanding of the technologies available and what they can help them to achieve.”
Dedicated procurement staff
Regarding the question of whether housing providers need a dedicated IT procurement function, Shasa Colson, enterprise account manager at Exponential-e, said, “Not necessarily, although it does help to have a clear view of buying criteria and routes to market, such as RFP or the G-Cloud framework. The key thing is to have a firm understanding of the various methods of procurement, either via OJEU, CCS Frameworks or G-Cloud, and choosing the path the best suits your needs.”
CJC Procurement’s Cliffe said, “Why do you use an accountant to prepare your accounts? Probably because your accounts are important and you want someone who knows what they’re doing to prepare them. Procurement is a profession, and unless organisations engage with professional resources, they can’t expect professional outcomes. Whether an IT procurement professional is recruited or brought in on a temporary basis for a specific project, the value from professional support shouldn’t be undervalued.”
Northgate’s Birkinshaw said, “What’s most important is for the procurement and operational people in the business to work closely together throughout the process. The staff involved need to ensure that the right questions are asked at the right time and that the housing provider has confidence in the supplier’s understanding of what the solution needs to deliver. However, you don’t necessarily need a dedicated IT procurement team to achieve that.”
Generating the requirements’ specification
Chris Hampson, account manager at Blacklight Software, said, “We find it most useful when the requirements are provided as a functional and non-functional split. This allows us to consider the two sets of requirements separately and then map the solution to bring the requirements together in a single solution. Technical information is also very helpful, especially details of the APIs the customer has access to via their third-party systems that would require integration with the new solution.”
CJC Procurement’s Cliffe said, “The best way of generating the requirements’ specification is via a robust process combining engagement with the customer, their end-users and the wider market, usually supported by a good business analyst and experienced project manager. It’s important even at this early stage that your procurement staff (assuming you have them, either in-house or external), are involved particularly in relation to the market engagement to facilitate conversations and cut through any perceived bureaucracy.”
Exponential-e’s Colson said, “An overview of the business requirements along with an understanding of what is important to the buyer is vital. This can encompass cost, security and flexibility, all of which need to be confirmed before outlining the technical requirements. Detailing a clear business strategy allows potential suppliers to best accommodate the customer’s needs.”
Improving budgetary reviews and approvals
Northgate’s Birkinshaw said, “As we all know, technology evolves incredibly fast so there are many advantages to looking further ahead, with a budgetary strategy spanning three to five years, plus staying ahead of the curve in terms of the latest developments can bring economies of scale.
“However, keep some flexibility in your budgetary planning. As new innovations come along, you need to be able to change direction and adapt without starting the whole procurement process from scratch or going through lots of red tape to get a fresh budget approved.”
Exponential-e’s Colson said, “Budgets are usually submitted well in advance of a housing provider’s financial year, but this approach risks being a little short-sighted. Many longer-term projects could tie neatly together, but these need to be thought about in advance, taking the form of a three- to five-year plan; budgeting should be considered a marathon, not a sprint.”
Avoiding rigid tendering processes
Peter Luck, director of operations for Uniclass at ROCC, said, “Although the tendering procedures are relatively rigid, there is nothing stopping housing providers from running more face-to-face or telephone-based sessions. More time spent sitting and talking to potential suppliers will quickly highlight who can deliver what’s needed, who you will be happy working with and who you trust.
“As a housing provider, you are going to be stuck with your chosen supplier for years to come. It’s critical to not just tick boxes that confirm a system can do X or Y and check off that the price looks good. Speak to the project manager, talk to the person who runs the business, have a chat with one of the technical experts and get under their skin to really confirm they are an expert.”
CJC Procurement’s Cliffe said, “The best way is to not do a rigid RFI/RFP/tendering process in the first place!
“If time is taken to understand the critical nature of the system required, the market conditions and relationship aspirations with the eventual supplier, then the procurement process should be designed to allow for those outcomes to be the focus and that shouldn’t feel rigid. Although, quid pro quo, the clearer you can be in articulating the problem and the genuine pressures, the more responsive procurement can be.”
Exponential-e’s Colson said, “Exploring the market is key; research what is out there before realising the tender. Open days with suppliers can also be useful. This way, housing providers can meet all the suppliers and be transparent regarding their plans. It’s also a chance for suppliers to question the housing provider on their strategy. Ultimately, the aim of these is for suppliers to understand the customer, and for the customer to understand what is required from them for the tender.”
Northgate’s Birkinshaw said, “Housing providers should get in contact with others who have implemented the technology that they’re considering. This will give them a chance to ask what systems were delivered, in what timeframe and what challenges had to be overcome. This could make the difference between an IT project that continuously hits snags, costing time and/or money, and one that is delivered smoothly.”
Best practice and pitfalls
CJC Procurement’s Cliffe said, “Best practice is to design the selection process appropriately and not roll out a template-focused process followed across other categories. Too often, the same templates and processes are used for repairs and maintenance as they are for marketing, consultancy, legal and IT contracts. The process needs to fit the market and the need. That said, the more time spent on defining the evaluation criteria, the greater the chance of driving better offers from the market.”
Northgate’s Birkinshaw said, “It can be tempting to spend many hours scoping out a long list of requirements for a new IT solution that are unachievable for any supplier. Add to this an unrealistic timescale and the project will result in stress and disappointment. Give careful consideration to the priorities and agree time frames for delivery, then work closely with the supplier to ensure these will be met.
“Don’t make hasty decisions. A two-hour overview of a shiny new solution for, say, tracking tenant communications across your business will only really provide an aesthetic first impression. After all, would you buy a car without first having a test drive?
“The best way to ensure you buy the right solutions is to take the time to get to know the supplier, develop a deep understanding of what their systems are capable of, what their investment plans are and their track record of delivering new functionality, on time.”
Measuring value for money
Blacklight’s Hampson said, “The desired return on investment (RoI) is helpful to be included in procurement documents. This really helps to outline the fundamental aim of the solution, whether that’s an increase in customer service scores or customer satisfaction, or a tangible increase in efficiency, such as faster completions of mutual exchanges or complaints being resolved quicker. By providing the desired RoI, suppliers like us can then tailor the solution to ensure that it is met.”
Exponential-e’s Colson said, “Clearly-defined KPIs should be non-negotiable, along with solid success criteria at the start of the procurement process. This needs to be monitored throughout the lifetime of any contract, so regular service reviews are needed.”
Northgate’s Birkinshaw said, “A business case is critical for ensuring value for money. For example, if you’re introducing a digital hub, your business case may specify that the key objective for doing so is for 70 per cent of communications with tenants to be moved online within the first 12 months; you can then monitor progress towards this figure.”
What to be aware of…
ROCC’s Luck said, “There is always the threat of promising too much when completing tenders. This goes back to the honest conversations which providers and suppliers must have. Yes, suppliers want the work and want to do it well, surpassing expectations. But over-promising on contracts is often unsustainable and can leave both parties dissatisfied.”
Northgate’s Birkinshaw said, “One of the most important steps a housing provider can take before embarking on any IT procurement journey is to make sure their existing systems are being used to their full capabilities. There’s little point tendering for, say, a new piece of mapping software or online portal if your existing housing management solution already offers that functionality but it hasn’t yet been fully explored or utilised.”
CJC Procurement’s Cliffe said, “The biggest pitfall is not considering finance as a result of setting a vague budget, crunching a process, taking supplier bids and doing your best. It’s so much better to work with your procurement and finance colleagues to take a more structured approach and explore the financial aspects and opportunities in detail, not just during the due diligence process when exploring the financial viability of the supplier and their solution, but also during the deal itself.”
OJEU or not OJEU?
Referring to the post-Brexit landscape in terms of OJEU compliance, Exponential-e’s Colson said, “As things stand, without a deal on leaving the EU, public procurement regulations will remain broadly unchanged after Brexit. At present, UK law states that tenders over £10,000 must be published domestically within the UK. This is significantly lower than the current OJEU threshold but after leaving the EU, this could be assessed and changed by the UK government.
“Should the UK get a deal in the Brexit negotiations, no changes will take effect until the end of 2020. And let’s not forget that other procurement frameworks, such as CCS and G-Cloud, are readily available.”
CJC Procurement’s Cliffe said, “There are likely to be some technical adjustments, but I don’t expect the overall regime to significantly change. After all, don’t forget that most EU procurement policy was driven by the UK.
“For example, Framework Agreements are a UK concept which the EU tried to abolish ahead of the 2004 EU Consolidated Procurement Directive, but the UK successfully lobbied to ensure they were included, hence the Public Contract Regulations 2006. The principles of fair, open, transparent and proportionate procurement aren’t going away.”
Housing Technology would like to thank Chris Hampson (Blacklight Software), Chris Cliffe (CJC Procurement), Shasa Colson (Exponential-e), Roger Birkinshaw (Northgate Public Services) and Peter Luck (ROCC) for their editorial contributions to this article.