Procurement control and methodology has penetrated all pharma organizations over the past years. It is a sign of maturation, a professional attitude with the hope for right spending. Procurement functions were established and are growing in importance; and have occupied the space between the budget owning business functions and the vendors offering services and solutions on the market.
Request for Information and Request for Proposal processes, especially with the kind of exclusivity as they are applied to all procurement activities have bred a new art of growing vendor businesses, the ones that can actually win RFPs. It is kind of an artificial evolution fuelled by the companies themselves who are trying to safeguard their functions and budgets and ensure external services and goods are delivered at optimal price and quality. A false expectation.
There is nothing implicit in an RFP process that will guarantee that the selected vendor will be able to deliver or deliver at utmost satisfaction of the requesting business functions. These rightfully feel that despite the lengthy and resource intense participation in the internal RFIs / RFPs they do not seem to be able to access truly matching, tailored solutions with really high utilization and maximum benefit for the cost.
RFPs are actually not allowing small and innovative vendors to get in the game, to get experience and reference and to be able to successfully compete against the bigger ones who are already in there. As if the sports game was restricted to the more mature and experienced players, who might long not at all be at their peak performances or have not even ever been really talented ones, but they are established and equipped to dominate the game field while RFPs like fences with security thugs even help them by keeping the young ambitious talents out of the stadium.
How many times did we see that the winner of an RFP:
• could not maintain professionalism, the business know-how which they seemingly demonstrated in the selection process,
• that the quality of the documentation for the RFP was significantly superior to anything they were able to produce in the implementation of the project,
• that many of the promised advantages (even critical to having been selected) were simply oversold, augmented (if not even truly lied about),
• that there is no actual capacity or interest in the vendor organization, many times long term overloaded and underdelivering (exhausted) for a quick success,
• and could not actually even maintain the price level which was scrutinized and was determinant in winning the RFP itself.
As a wrongly made marriage match, it is hard to undo an RFP, there are shared interests not to declare a new project a failure even if the root cause admittedly is the inappropriate vendor selected. Attempts to repair, penalize an eventually prepare for mid term separation from the vendor will start culminating the suffering of the business in a new and lengthy RFP process. It is a vicious circle, hard to be broken from within the procuring organization.
What can you do to avoid these traps without having to move away from wanting to apply a traditional procurement concept or to fundamentally change the roles between your procurement and business functions? Be flexible and be clever. Instead of shortlisting the usual or just well-known vendors of the market segment, allow business functions to establish partnerships, network with potential vendors of all kinds and select promising new relationships to develop new collaborations on. Give free passes to ambitious runner-up companies who if they speak the same language and resonate well with the needs and representatives of business, might turn out to be surprisingly good in the actual implementation and rendering of the desired services and solutions.
At StratoServ Sciences we can also work with you in similar situations, we can be there to act as the third party between your procurement and your business function. We can help you to create a better mix of potential vendors, to ensure that innovative new solutions are also represented in your selection process. We can help to accelerate the procurement process, which many times due to the uncertainties about the nature and the actual needs of the business function cannot even formally start right on time. We can work with your business side to establish and mature partnerships before and during the RFPs to make much better matches for much better quality and utilization.
This many times needs unorthodox thoughts and approaches. Do not be afraid to provide information or create any situation which puts a vendor into advantage if it actually serves the interest of your organization, if it even reduces the costs. Pre-consultations and complimentary consultation projects, preferred vendor concepts, involvement of such in related RFPs (e.g., technology basis of the future service) can enable companies to really mould into the ideal partner for your business needs, keeping the purpose and ethics of procurement also intact.
Think of your functions and related budgets as eco-systems. Allow bias in vendor combinations when advantages occur on the system level. Look for and factor in any external effect of the service you are setting up across the whole of the eco-system. Emphasize and promote overarching vendor solutions or solutions which off set costs at other parts of the system. Procurement cannot comprehend such business complexities and inter-dependencies without partnering with the key experts of their business functions, and if there is need to catalyse such thinking, you might want to bring in external help like us specializing in management of eco-systems.
If you feel that you and your company is in a similar situation, if you are frustrated and feel cut-off from the right services, if you think all vendors are bad and this whole outsourcing thing is a simple waste of time and money, and if you feel procurement concepts applied are not helpful, then the above thoughts might have resonated in you. You might want to rethink rules of your game, your stadium, who you let in to play, and you might want to lend your security guys a helping hand to ensure right ambition and talent is let in and is allowed to become your stars.