Tail Spend Management

Take action to get real value from tendering for better Tail Spend Management

Anything new takes time to settle in. Psychology shows that people are innately opposed to change - so to succeed in managing your tail spend long term, you need to make sure new processes have a chance of being adopted into working culture.

This blog focuses on how to make sure your tenders deliver the results you need - whilst making procurement smoother and easier for purchasers. Any new process must help, not hinder - and there are two aspects to this:

1 - How to get what you need from tendering

Going to the effort of tendering for those smaller spends in the tail may seem like a laborious task, but, as we’ve talked about before, tenders shouldn’t only be reserved for procuring large contracts. Tenders definitely have a place in almost any acquisition, thanks to the hidden benefits you should be building into each tender process.

Tenders work because they bring you added value. Not only do you know you’ve purchased at the best market rate, but with the right process, you’re gaining a wealth of data insights too.

Yet on a practical basis, there are definitely a few considerations you will want to make to ensure you get the most from the process as it begins.  

  • Make sure you set the pace - give yourself some breathing room but don’t drag it out and lose supplier engagement. 
  • Clearly define your methods to keep tenders consistent - this includes the method you’ll use to notify suppliers of the tender and requirements as well as how you’ll capture responses
  • Evaluation criteria - what requirements for the service are the most important to the stakeholders? Build the questions alongside how you’ll mark and score the responses. 
  • How will you choose the best supplier? Be clear on the balance of requirements needed - cheapest isn’t always best
  • Can you scale at pace? When running these first few tenders ask yourself: could this be repeated at scale with multiple stakeholders running concurrent tenders? 

These questions can help to form the basis of a Statement of Requirements - clarifying the tender needs, and providing a template for the Statement of Work you’ll need at the contracting stage.

2 - How to remove barriers to efficient buying

You can create the most elaborate tendering process in the world but if it’s not easy and straightforward to use, you’re never going to get buy-in across the company. The secret to adoption and lasting change is to make the new process simpler than current methods and for it to provide clear solutions to the actual problems you are experiencing. If your solution requires more work, and the concept of adopting it is difficult to grasp, people will naturally try and circumnavigate using it, reverting to old inefficient ways.

In reality this means that unless you have plenty of staff resources and time to manually handle each step of the process, your solution will need to engage the use of software automation to speed things up.

However, it’s important to also understand that having software in place isn’t a magic bullet in all cases. Any technology you choose must be intuitive, and designed specifically to handle multiple aspects of the procurement process whilst also capturing the data alongside. Again, it’s all about removing barriers to efficient purchasing, whilst ensuring the new process delivers value too.

Great software solutions not only take the pressure off dealing with tender responses, by assisting with the scoring  and evaluation of your suppliers for you, but they also collate and analyse valuable data in the background which will allow you to feedback into the system to improve purchasing processes in the future.

To find out more about how Maistro’s smart platform makes purchasing services easy, accountable and visible, book a demo today.

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Next week we’ll move on to the final stage of your action plan: contracting. Find out how to contract efficiently - and why lean thinking may hold the key to streamlining the process.