QOTW: how can procurement choose the right ‘partner’

After the huge success of our first question of the week (QOTW), we'll pose something that is maybe a little more challenging for you learned practitioners.

This was a question, which I'll have to anonymise somewhat, from an acquaintance who is helping a non-UK public body choose a 'partner' who will genuinely be both a supplier, and a business partner in terms of generating revenue. They've been through one iteration and found a provider who looked great; but then started behaving in a very non-partnering manner before the ink was dry on even the draft contract!  (It is an attractive proposition for the right 'partner' by the way).

So the question is:

"What can organisations do through the 'partner selection' /procurement process, particularly for complex service type contracts, to make sure they end up with a provider who will really behave as a 'partner' ?"

Comments and responses welcome!

Voices (10)

  1. John Doyle:

    Peter,
    Traditional procurement methods find it very difficult to evaluate the, often, intangible, qualities that make for a good ‘partner’. Our approach used in, for example, the London 2012 Delivery Partner assessment and the £22 billion Sellafield partner procurement, used simulated partnering assessment centres focussed on team behavious – with all the rigour we could muster in this ‘soft area’. There is a good article – The £4.4 Billion Assessment Centre in CPO Agenda 2009 and on our web site http://www.b2bppm.com. Plenty of other case studies from a dozen major competitions. If anyone is interested further contact us. Its not a panacea but a good piece of the partner evaluation jig-saw puzzle. John

  2. Daniel Ball:

    Businesses are either partner-centric or they are not. This is fundamentally something within the organisational mindset and not something that can be imposed – either their approach with clients is to work towards building a collaborative partnership for the future, or it isn’t. And the only way to uncover this is through proper due diligence, researching the prospective supplier organisation to understand how they work with their other clients and whether those relationships demonstrate the collaborative qualities you are demanding.
    There are many very effective and valuable contract and supplier performance management tools available on the market, and any organisation that genuinely wants to act in partnership with its suppliers should (must?!) closely track key metrics to ensure suppliers deliver on their promises, but being partner-centric is not something you can legislate your suppliers into and so the key role of your contract is to act as the back stop that allows you to end the business arrangement if that relationship does not develop in the way you had hoped.

  3. Peter Smith:

    Dear bitter and twisted
    Love it! The magical mindreading uinicorn enters procurement folklore…
    peter

  4. bitter and twisted:

    Hire a magical mindreading unicorn who will look deep into their souls and determine if they are truly pure of heart.

    Or, make sure the termination clauses are right and you have a back-up partner – or three.

  5. Flog:

    I reckon the EU Rules would apply to the extent that the partnership may be categorised as a services concession rather than a services contract (in which case the ‘full’ Rules apply. Whether this is correct or not, the public body status of the non-UK body, assuming that it is located within an EU Member State, will have to comply with the Treaty’s fundamental principles of non-discrimination, equal treatment, transparency, mutual recognition and proportionality. And as we’re seeing through the courts, the greatest of these is transparency, therefore, the requirement would have to be advertised in order to ‘generate genuine interest’. This means that, unlike a private organisation, the non-UK public body can’t simply have a look around and invite a number of potential parties into discussions.

  6. MarketDojo:

    Aside from the KPMG example of inviting the provider to work for the organisation for nothing, I take it?!

    Ensuring the RFI / RFP is extremely robust and fulfilling would be the first step. No good going out to market with a wish-list that doesn’t accurately reflect what you are searching for in a partner. To share the risk, think about mentioning a gain-share or some kind of incentivisation to ensure both parties objectives are neatly aligned. Incentivisation should be both short-term and long-term, to keep the relationship fired up throughout the contract.

    References and case studies from potential providers are very important, particularly if they are based on the same industry or requirements as yours. Remember to ask what they learned from the experience.

    Face-to-face meetings (if possible) during the selection process also greatly help, ensuring that everyone who would be on the “team”, whether behind the scenes or otherwise, are present. If you get on with them and get a good vibe or gut-feel, that spells out a good chance of success, particularly if you all fully understand each other right from the start.

    Finally, if the opportunity presents, take them on on a trial basis. I’ve seen this done in the past for key freight forwarding contracts for example. Based on all of the above plus the trial itself, you should be in a great position to pick your “partner”.

    1. John Doyle:

      Hi,

      No there is a better way. See our case study the £4.4 billion assessment centre on http://www.b2bppm.com.

  7. Craig Lorne:

    Finding partners is one of the most difficult tasks for any organisation to do. One model i’ve found appropriate when looking at this in the past is Tidd’s. He argued that partnerships work best when:

    1) the alliance is perceived as important by all partners
    2) a collaboration ‘champion’ exists
    3) a substantial degree of trust between partners exists
    4) clear project planning and defined task milestones are established
    5) frequent communication between partners, in particular between marketing and technical staff
    6) the collaborating parties contribute as expected
    7) benefits are perceived to be equally distributed.

    I would argue that in addition to this that each party needs to bring something different. One bring the contacts, the other the technology for example so both organisations grow.

    Further, this is a big business strategy question. It’s about how do I deliver my service to my customer, how can I build a sustainable future for my organisation, how will I build my brand. The key to delivering against all of these is a deep trust. Delivering that through the Public Contract Regulations will be a difficult challenge (assuming that the full regs apply).

Discuss this:

Your email address will not be published. Required fields are marked *