tail spend plan

Starting to put your tail spend plan into practice

Action: How to set up an effective beta test

The test phase of your plan is where the real world comes in. Any new process needs rigorous testing and evaluation to demonstrate efficiency - and refining the product is an essential part of planning.

In this blog we’ll investigate how to set up your first tenders to test your new programme - and find out why choosing the right projects is critical to success.

The Goldilocks approach to selection

Getting the best out of beta-testing relies on making wise choices right from the start. From right back at the planning stage, we focused on simple versus complex - and this is especially true when looking to implement your plan of tendering in the low value tail.

However, there is definitely an element of “just right” involved in picking the perfect projects for testing your new process. Whilst small is good, too small can sometimes be too restrictive. Likewise, you need a range of requirements but so many that it makes your first exercise unnecessarily complex.

It’s key to remember that the whole process is geared towards gathering intelligence on how well your plan performs. Just as we began our journey looking for visibility into tail spend, data will drive results at this stage too. 

So, depending on your own capacity, you’ll want to look at a couple of projects minimum for testing. In choosing these, it’s worth finding the ideal sweet spot on a few key considerations. As with all parts of this series, we are specifically talking about the procurement of services in the tail.

  • Value - it’s all about the balance here. Starting with a smaller project is going to be easier to manage but it also needs to  have enough value to attract active engagement from both suppliers and stakeholders. A good rough guide would be any service between £20-40k.
  • Category - this is important because you want to test a category that you have identified from your analysis as containing  lots of suppliers, so exclude any niche projects - they simply restrict the responses you receive to a few specialists. Marketing projects are often a good bet: a good range of budgets to choose from, lots of innovative suppliers to respond and the service provided isn’t as complicated to implement as say, IT provision.

  • Requirements - these need to be clear and straightforward to allow for easy benchmarking of responses. Remember, you’re aiming to collect data so a project with a series of measurables is ideal - but remember to steer clear of anything too complex too soon.

Projects chosen - it’s time to prepare to tender.

Perfecting tender preparation

Real world trials are all about refining the plan and optimising it for success on a practical level. So, when preparing to tender, analyse in advance the steps you are planning to take: how can you make the process even more straightforward?

The evolution of this process is to get to a stage when you can enable buyers to make purchases which are simple yet maintain a level of authorisation and governance. To gain the same data visibility benefits as the tenders you run in strategic spend areas, tenders in these low value tail spend areas need to be easy to manage.  That means, if you plan to scale the process to cover most - if not all - your tail spend, you’ll need to automate a lot of the processes.

This is where an automated S2P solution can play a huge part in simplifying your new plan. If you’ve not explored the potential of RPA, AI or machine learning, there’s a goldmine of information worth exploring. To get a feel for how automating processes can directly impact productivity, take a look at how these CPOs have transformed procurement in their departments.

Maistro’s own sourcing and procurement platform has turned traditionally analogue, time-consuming and unscalable processes into a smart digital automated experience. This gives procurement the time to focus on more complex strategic areas of spend in the business whilst stakeholders (some with little to no procurement experience) are given ‘virtual’ assistance to make efficient purchases in the tail, with full visibility at every step.

Next week

We’ll look at how to control that tender process to your own advantage - ensuring the process works for you, rather than the other way around.

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