All businesses experience non-compliance with best practices from time to time, more often than not due to ignorance rather than unwillingness to comply. In this example, the leader of a project to install a backup power system at a head office a major financial institution had engaged the services of a design and build company who had secured a budget of £1.8m. A request was made of procurement to “place the order”.
A multi-functional team was set up with all major stakeholders and the specification drawn up. Two additional competitor suppliers were identified and the ITT issued on time, outlining timescales and project briefs. The specification was transformed from an input to an output specification.
The current critical power infrastructure was deemed insufficient in the fast growing business and the project was under some time pressures to deliver a quick installation. However, a £1.8m project budget had been approved based upon a single quotation from a design & build installer. A design specification and Invitation to Tender (ITT) had to be quickly produced and evaluated without endangering the project timescales.
The original installer dropped out of the tendering process – perhaps knowing their astronomical pricing would be discovered. The two remaining suppliers each offered different solutions to the project brief, both at around 40% of the cost of the approved budget. A £1m saving was generated – pretty good on a £1.8m budget! The varying solutions enabled discussions and fed ideas that developed the specification before placing the purchase order.
Maverick behaviour is often the result of ignorance rather than beligerance. Working with a project team and making them aware of commercial flaws in their plans while actively understanding the overarching objectives of the project can deliver extraordinary results in terms of quality, risk and cost.
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Jim Willshaw (MBA, MCIPS, MIIAPS)
Jim is an experienced procurement professional acting as a consultant, speaker, coach and trainer to leading organisations all over the globe.
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