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Making the Procurement Process Count

Making the Procurement Process Count

There are several procurement vehicles available today, and yet projects are still going over budget and not delivering on the milestones. The following criteria can help the procurement process add value:

• Having the right budget for the project
• Tailoring your contract model to suit the project
• Preparing properly for the tender phase
• Smart supplier selection
• Knowing your risks and allocating them well

For this article, I will highlight a few points that can add value to the Supplier selection.

Smart Supplier Selections

Several organisations have an unwritten code of selecting suppliers based on a cost-and-quality formula — 70% on cost and 30% on quality. These days, a few of the organisations may choose suppliers based on quality and technical proficiency alone; however, this is very rare. Sadly, most project managers still believe that selecting contractors based on the cheapest offer is the way to go. They fail to recognise that contractors are not charity organisations and need to be paid for the hard work they put in. Failing that, your project is headed towards crisis.

The following can add value to your supplier selection and ensure your project is set up for success.

Client Behaviour

The behaviour of some clients are not acceptable to enable the suppliers trust them in the first place. So before you embark on your procurement process, ensure you have the right team with the right behaviours so you can select a supplier who will complement this. Therefore the people you choose to lead your project will dictate the people the supplier offers or will affect the behaviours the supplier exhibit.

Right Price

The price shouldn’t be the overriding factor. It is important to understand how money influences the behaviour of human beings. Do not be naïve to this important fact. Suppliers are huge organisations, with investors, and with only one reason for operating — and that is making a profit!

Supplier Culture

Research and understand the culture of the suppliers. An organisation cannot change their culture over the course of just one project. What they stand for overall will dictate how they behave on that project.

Supplier Leaders

Who is the CEO and their top leaders, and what behaviours do they demonstrate in the industry? Culture and behaviours are normally dictated and driven by the leaders at the top. If these leaders are non-collaborative ones, then it is best to avoid this supplier regardless of what you think.

Behaviour Track Record

What is the track record of behaviours for the leaders being offered to lead your specific project? Get references from previous clients on these people. Don’t rely on references from the top leaders from the client organisation only. Get references from the project team that they worked with.

Allow Behaviour Improvement Demonstration

Allow the supplier leaders to demonstrate improvement on behaviours by allowing them to give examples of some of the wrong behaviours they demonstrated on previous projects: what caused those wrong behaviours, what steps they have taken in the right direction, and what they believe they can do to remedy this. Don’t compromise on this. If they are not the right people, just ask for them to be removed from the selection process if the overall supplier’s ethos is promising.

Behaviour is key to Success

An organisation’s culture is its DNA — its core identity, as stated in the Agile Practice guide. Its culture will always influence the behaviour of its people. This is why choosing a supplier with a culture you can work with is critical to the success of your project.

Further information

An excerpt of ‘Delivering Successful Megaprojects’. Will be out in May 2018.

The book goes into depth on the tools required to ensure the success of complex or large Infrastructure projects.

Author :Clement Kwegyir-Afful BSc MSc MAPM CEng FICE

Director of KAPM Services Limited. A specialist project management firm for complex and large infrastructure projects.

Contact: info@kapms.co.uk

All rights, including translation, reserved. Except as permitted by the Copyright, Designs and Patents Act 1988, no part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying or otherwise, without the prior written permission of the Publisher

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