Comments on: The folly of the tendering process http://eicolab.com.au/2009/04/14/the-folly-of-the-tendering-process/ Sat, 13 Mar 2010 16:24:33 +1100 http://wordpress.org/?v=2.8.6 hourly 1 By: Zern http://eicolab.com.au/2009/04/14/the-folly-of-the-tendering-process/comment-page-1/#comment-177699 Zern Fri, 05 Mar 2010 17:57:07 +0000 http://eicolab.com.au/?p=1973#comment-177699 Meeting new customers and building strong relationships are two different things. Meeting new customers involves attracting them in the first place. And then establishing the first lines of communications. Setting the foundations of new relationships. Only when some level of mutual trust and interest has been established can the relationship building part start. Some relationships never make it pass the initial meeting stage. Tendering for work is on the only means to finding customers. Just like going through a recruitment agency is not the only way to find a job. The problem is not so much as in the concept of tendering for work as in how people use the tendering process, their expectations, and the mindset it fosters. Meeting new customers and building strong relationships are two different things.

Meeting new customers involves attracting them in the first place. And then establishing the first lines of communications. Setting the foundations of new relationships.

Only when some level of mutual trust and interest has been established can the relationship building part start. Some relationships never make it pass the initial meeting stage.

Tendering for work is on the only means to finding customers. Just like going through a recruitment agency is not the only way to find a job.

The problem is not so much as in the concept of tendering for work as in how people use the tendering process, their expectations, and the mindset it fosters.

]]> By: beam dog http://eicolab.com.au/2009/04/14/the-folly-of-the-tendering-process/comment-page-1/#comment-177299 beam dog Tue, 02 Mar 2010 23:33:35 +0000 http://eicolab.com.au/?p=1973#comment-177299 how will you source new clientel woftam? What aother means are there of meeting new customers and building strong buisness relatioships? how will you source new clientel woftam? What aother means are there of meeting new customers and building strong buisness relatioships?

]]> By: Bruiser http://eicolab.com.au/2009/04/14/the-folly-of-the-tendering-process/comment-page-1/#comment-91269 Bruiser Fri, 02 Oct 2009 07:32:35 +0000 http://eicolab.com.au/?p=1973#comment-91269 The tendering process in my industry is a crock. My issue is that the person continuously and consistently getting screwed is the poor customer who needs to have the work done. The situation in the electronic industry is that we are a very small part of a construction or office fit out and we generally dumped in with the electrical scope, responsible to the electricians; I cannot think why, maybe because we both use cable. First things first. The customer requires good advice on what is best to protect their business premises from break and enter and steal. Business continuity is not only reserved for the IT space and all important delivery of 5 x 9's in terms of Network SLA. Business continuity is also around people arriving at work the next business day and the computers and servers are still in the spot that they were at the close of the last business day. In addition, who wants to hear that they are not allowed to touch anything until the Police fingerprinting team have been to the premises, put a cash value on the time and loss of business. So the customer needs to receive good advice which for they pay good money to a consultant. The problem is that in our industry the consultants are nearly always all electrical engineers and don't understand or keep up to date with developments or change and so the gap in ambition and capability of the consultant is sometimes too wide and the advice is anything but good. In the absence of a real stakeholder needs analysis they get what the consultant thinks is appropriate. Imagine putting access control and alarms on doors with nothing to detect intrusion through gyprock walls into the office area. A gyprock wall is after all just chalk wrapped on two sides in a thick paper then painted. My size 12 makes short work of gyprock walls and I'm in - undetected. In responding to a tender I have found that the specifications are sometimes nonsense or a bad cut and paste from another project. When there is conflict between the plans and the specifications I often have to use the drawings as my only guide on what to quote. If there is equipment left out which I identify is necessary to comply with safety regulations I leave it out and will make a fully marked up variation later, if I get the gig. So the job goes to the cheapest bidder as decided by the electrician. The variations naturally follow. I am responsible to the electrician who reports to the builder who in turn is responsible to the Project Manager then up to the Architect. My variation price goes through 4 sets of hands before the customer ultimately gets reamed. Each set of hands puts 20% handling charge on it. So a $1000 variation is $2073 by the time it gets to the poor customer. The poor bugger who needs good advice and pays good money for that advice does not get it. Who wins out of the tender process? That would be the consultant…good money for poor or mediocre advice and no responsibility. The tender process needs a serious rethink, or the customers need to get savvy and wise up. For me – I won’t be responding to tenders - WOFTAM. The tendering process in my industry is a crock. My issue is that the person continuously and consistently getting screwed is the poor customer who needs to have the work done. The situation in the electronic industry is that we are a very small part of a construction or office fit out and we generally dumped in with the electrical scope, responsible to the electricians; I cannot think why, maybe because we both use cable. First things first. The customer requires good advice on what is best to protect their business premises from break and enter and steal. Business continuity is not only reserved for the IT space and all important delivery of 5 x 9’s in terms of Network SLA. Business continuity is also around people arriving at work the next business day and the computers and servers are still in the spot that they were at the close of the last business day. In addition, who wants to hear that they are not allowed to touch anything until the Police fingerprinting team have been to the premises, put a cash value on the time and loss of business. So the customer needs to receive good advice which for they pay good money to a consultant. The problem is that in our industry the consultants are nearly always all electrical engineers and don’t understand or keep up to date with developments or change and so the gap in ambition and capability of the consultant is sometimes too wide and the advice is anything but good. In the absence of a real stakeholder needs analysis they get what the consultant thinks is appropriate. Imagine putting access control and alarms on doors with nothing to detect intrusion through gyprock walls into the office area. A gyprock wall is after all just chalk wrapped on two sides in a thick paper then painted. My size 12 makes short work of gyprock walls and I’m in – undetected. In responding to a tender I have found that the specifications are sometimes nonsense or a bad cut and paste from another project. When there is conflict between the plans and the specifications I often have to use the drawings as my only guide on what to quote. If there is equipment left out which I identify is necessary to comply with safety regulations I leave it out and will make a fully marked up variation later, if I get the gig. So the job goes to the cheapest bidder as decided by the electrician. The variations naturally follow. I am responsible to the electrician who reports to the builder who in turn is responsible to the Project Manager then up to the Architect. My variation price goes through 4 sets of hands before the customer ultimately gets reamed. Each set of hands puts 20% handling charge on it. So a $1000 variation is $2073 by the time it gets to the poor customer. The poor bugger who needs good advice and pays good money for that advice does not get it. Who wins out of the tender process? That would be the consultant…good money for poor or mediocre advice and no responsibility. The tender process needs a serious rethink, or the customers need to get savvy and wise up. For me – I won’t be responding to tenders – WOFTAM.

]]> By: Benedict http://eicolab.com.au/2009/04/14/the-folly-of-the-tendering-process/comment-page-1/#comment-30097 Benedict Sat, 02 May 2009 01:10:27 +0000 http://eicolab.com.au/?p=1973#comment-30097 When I tried to develop relationships to get to the real needs to create a real solution (often cheaper then the other tenders) then I was invariably met with hostility and suggestions that 'I should just know'. I always saw this as three issues; 1) ignorance of what was required in the project, 2) a hope to outwit the quoting companies into the 'best price' and 3) an avoidance of personal responsibility - if the other guy designed/approved it, when it fails it can't be my fault. Going in low and then revising is, as you say, playing the same nasty game. I was blindly hoping there was a way to bypass the stupidity of the system. The more I think on it the more I think Ayn Rand had it right by having all her great minds go on strike in "Atlas Shrugged". The only way of change I see is to refuse to play with any company or individual who tries to do business based on inequality ("at the point of a gun"). Imagine if all the best companies simply refused to deal with bad customers. Of course in the real world there is always a competitor who will swoop in but maybe the competitor is not the best mind or best solution. Over time the hope is that companies will start to get sick of mediocre results and start to consider fully involving good consultants early on. :-) When I tried to develop relationships to get to the real needs to create a real solution (often cheaper then the other tenders) then I was invariably met with hostility and suggestions that ‘I should just know’.

I always saw this as three issues; 1) ignorance of what was required in the project, 2) a hope to outwit the quoting companies into the ‘best price’ and 3) an avoidance of personal responsibility – if the other guy designed/approved it, when it fails it can’t be my fault.

Going in low and then revising is, as you say, playing the same nasty game.

I was blindly hoping there was a way to bypass the stupidity of the system. The more I think on it the more I think Ayn Rand had it right by having all her great minds go on strike in “Atlas Shrugged”.

The only way of change I see is to refuse to play with any company or individual who tries to do business based on inequality (”at the point of a gun”). Imagine if all the best companies simply refused to deal with bad customers. Of course in the real world there is always a competitor who will swoop in but maybe the competitor is not the best mind or best solution.

Over time the hope is that companies will start to get sick of mediocre results and start to consider fully involving good consultants early on.

:-)

]]> By: Zern http://eicolab.com.au/2009/04/14/the-folly-of-the-tendering-process/comment-page-1/#comment-30070 Zern Fri, 01 May 2009 16:33:42 +0000 http://eicolab.com.au/?p=1973#comment-30070 Is it purely up to the 'quoting' business? Surely, just like in any relationship, it is up to both parties to come together and set the tone of the engagement. Will it be one based on respect? Or exploitation? Failing this sort of idealised "proper" change, in the short term the 'quoting' company can perhaps look at alternatives like: avoid the anonymous tendering process and instead rely on building direct relationships via networking etc. If an anonymous tender is the only way, perhaps the short term solution may be: quote cheap up front to get the job (by making anorexic simplistic assumptions about unknown requirements), only to then increase the quote as the real requirements are identified after commencement. No-change terms notwithstanding. Nonetheless, this still feels inauthentic and wrong somehow. A relationship that starts with this sort of manoeuvring and second-guess does not bode well. Any thoughts on your end? Is it purely up to the ‘quoting’ business?

Surely, just like in any relationship, it is up to both parties to come together and set the tone of the engagement. Will it be one based on respect? Or exploitation?

Failing this sort of idealised “proper” change, in the short term the ‘quoting’ company can perhaps look at alternatives like: avoid the anonymous tendering process and instead rely on building direct relationships via networking etc.

If an anonymous tender is the only way, perhaps the short term solution may be: quote cheap up front to get the job (by making anorexic simplistic assumptions about unknown requirements), only to then increase the quote as the real requirements are identified after commencement. No-change terms notwithstanding.

Nonetheless, this still feels inauthentic and wrong somehow. A relationship that starts with this sort of manoeuvring and second-guess does not bode well.

Any thoughts on your end?

]]> By: Benedict http://eicolab.com.au/2009/04/14/the-folly-of-the-tendering-process/comment-page-1/#comment-29947 Benedict Wed, 29 Apr 2009 04:48:45 +0000 http://eicolab.com.au/?p=1973#comment-29947 No, not at all. The question is, how does the 'quoting' business overcome this? :-) No, not at all.

The question is, how does the ‘quoting’ business overcome this?

:-)

]]> By: Zern http://eicolab.com.au/2009/04/14/the-folly-of-the-tendering-process/comment-page-1/#comment-29945 Zern Wed, 29 Apr 2009 04:33:13 +0000 http://eicolab.com.au/?p=1973#comment-29945 You are welcome Benedict. “Just provide your best quote” just about sums up what is flawed with this process. All they seem to want is a set of simple numbers, attached to a simple solution, and one that is based on minimal understanding. “Hey, we don't understand anything ourselves, nor do we want to put any work in. Just give us an easy and cheap fix...” Am I being too cynical? You are welcome Benedict.

“Just provide your best quote” just about sums up what is flawed with this process.

All they seem to want is a set of simple numbers, attached to a simple solution, and one that is based on minimal understanding.

“Hey, we don’t understand anything ourselves, nor do we want to put any work in. Just give us an easy and cheap fix…”

Am I being too cynical?

]]> By: Benedict http://eicolab.com.au/2009/04/14/the-folly-of-the-tendering-process/comment-page-1/#comment-29895 Benedict Tue, 28 Apr 2009 06:55:36 +0000 http://eicolab.com.au/?p=1973#comment-29895 This is so true. I wish I had written this myself, it is that true. I get the impression that the "marketing" person who calls for the quotes doesn't really know anything about their needs. Whenever I dared ask, I got met with such venom that "just provide your best quote" was obviously an insult to everything good in life. Tendering has also seemed to me to be a way of building walls to protect mediocrity. Thanks for this article :-) This is so true. I wish I had written this myself, it is that true.

I get the impression that the “marketing” person who calls for the quotes doesn’t really know anything about their needs. Whenever I dared ask, I got met with such venom that “just provide your best quote” was obviously an insult to everything good in life.

Tendering has also seemed to me to be a way of building walls to protect mediocrity.

Thanks for this article

:-)

]]> By: Neil http://eicolab.com.au/2009/04/14/the-folly-of-the-tendering-process/comment-page-1/#comment-29443 Neil Sun, 19 Apr 2009 09:36:56 +0000 http://eicolab.com.au/?p=1973#comment-29443 The things you say about IT tendering are often true. I have seen supposedly smart organisations repeatedly make stupid expensive IT procurements that fail to meet their needs. Engineering projects have similar processes. But engineering deals with tangibles and is a more mature discipline. If a client wants a road they don't wander around interviewing drivers and vehicle manufacturers doing needs analyses and trying to understand roads. They do a concept design and tender for full design. Construction contracts are then accurately based on design details. There are always unforeseen variations and some scope changes but these are carefully managed. Civil and mechanical engineers would be terrified at the thought of calling tenders without specifying what you want. In IT not only does the client often not know what they want but we don't help by using proprietary software and components for which we have no details and over which we have no control. An engineer building a bridge (by law) needs to fully understand the details and functions of all its components. The things you say about IT tendering are often true. I have seen supposedly smart organisations repeatedly make stupid expensive IT procurements that fail to meet their needs.

Engineering projects have similar processes. But engineering deals with tangibles and is a more mature discipline. If a client wants a road they don’t wander around interviewing drivers and vehicle manufacturers doing needs analyses and trying to understand roads. They do a concept design and tender for full design. Construction contracts are then accurately based on design details. There are always unforeseen variations and some scope changes but these are carefully managed.

Civil and mechanical engineers would be terrified at the thought of calling tenders without specifying what you want. In IT not only does the client often not know what they want but we don’t help by using proprietary software and components for which we have no details and over which we have no control. An engineer building a bridge (by law) needs to fully understand the details and functions of all its components.

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