Industry: Public

In honour of public procurement month, we’ve gathered insight from top procurement professionals on their best advice for a career in public procurement, as shared in previous webinars and blogs. Browse these quotes for motivation and perspective as you chart your own procurement career path.

Collaboration is key in procurement

Internal customer satisfaction was rated as the most important measure of success by public sector CPOs in Deloitte’s 2018 survey. Understanding stakeholder goals and providing value through change management and project management is a crucial part of the job—but not always the easiest part. Here are two perspectives on the importance of taking a customer-centric approach:

“For me it’s about serving. I am serving these different departments to help the municipality do the best it can. Going into it with a servant heart and getting to know all the different operations within the municipality — if you don’t have a passion or desire for that, it’s probably going to be a hard job. But if you like being involved and supporting, then it is going to be a great thing to come to work every day.”

• Travis Ratsoy, Procurement and Assurance Coordinator, Town of Stony Plain

Be willing to talk to people, understand their viewpoint, get out of your office and meet people face to face.

• Travis Temeyer, Director of Purchasing, Eastern Michigan University

Conflict and difficult conversations happen

At the end of the day, procurement professionals can’t say ‘yes’ to every request, nor will their decisions please all parties. These two pieces of advice will serve you well in your procurement career to ensure conflicts resolve with a productive solution:

What I have kept in the back of my mind, in my experiences throughout 18 years of service, is that the vast majority of people that are in public service are good people who are trying to do the right thing. We may argue about the way in which we get things done. But in general, no matter what side of the aisle you may be on, everybody is trying to do the right thing.
We can’t look at our functions through the lens of a critic, thinking that people have the worst intentions. We have to put policies in place to prevent those things, but not at the expense of those that are trying to do the right thing. I keep that in mind every day of my work.

• Joel Neaveill, Director of Purchasing, Louisville Metro Government

Don’t take anything personally. During negotiations or difficult parts of the processes, remember it’s not about you. Focus on the process. In the legal field, a lot of things are very adversarial, but procurement is not like that. You’re working towards a mutually beneficial agreement. In the end, you want to be on the same page.

• Amy Tejirian, Procurement Officer at BC Net

Procurement has an organization-wide impact

The speed and effectiveness of the procurement process has a big impact on your organization’s ability to meet their goals. Here’s some inspiration to help other teams own their impact:

It’s important to remember that procurement influences the profitability of every area of the organization. We have direct influence over the business operations, and we need to capitalize on our expertise. Procurement is known for staying in the shadows — we need to self-promote a little bit and make sure people know how important our function is. You only do that by being willing to take some risks.

–Tracey Ens, Director, Procurement Services, Wilfrid Laurier University

More advice to advance your procurement career

When it comes to your procurement career, you are in the driver’s seat. However, it can be an uphill battle to get the resources and tools you need to thrive, whether that’s funding to attend a conference or a new software to cut down on paperwork.

In our webinar “Invest in your procurement function for better outcomes organization-wide,” special guest Paul Brennan, founder of ProcurePath and Director of Purchasing for County of Rockland, provides advice from 25 years as an educator and practitioner to help procurement teams successfully advocate for the support they need to advance their careers and the profession. Watch the webinar on-demand now.

Global public procurement spend is estimated at around $8.5 trillion USD annually.

While that number sinks in, consider that public procurement represents an average of 13% of GDP and makes up about one third of total government expenditures in OECD countries.

It is hard to truly fathom the impact of this spend on individuals and businesses around the world. It is equally mind-boggling to think that behind these massive numbers are procurement professionals working diligently to ensure transparency, fairness, competition, and best value for public funds.

Public procurement month, designated by NIGP, presents an opportunity to recognize the importance of this work and the impact it has on our society. 

The impact of public procurement

At Bonfire, we are proud to work hand-in-hand with public procurement teams to modernize their sourcing process, a partnership which gives us a front row seat into the crucial role that procurement teams play in delivering the services and infrastructure that make up our public lives.

Procurement remains behind the scenes for the most part (and let’s face it — for most public officials, ending up in the headlines is something to be avoided at all costs). That’s why it’s important to take this time to promote the ‘good news stories’ of procurement! 

Learn from peers and advance your profession

We’re celebrating this month by bringing you an educational webinar presented in partnership with leading practitioners in the field. 

Invest in your procurement function for better outcomes organization-wide

Special guest: Paul Brennan, founder of ProcurePath and Director of Purchasing for County of Rockland
Procurement is gaining recognition as a strategic value driver in the organization, but many procurement teams still struggle to get funding for tools and resources to improve their own process. Paul Brennan will bring his expertise from 25 years as an educator, practitioner, and champion of the public procurement professional to provide advice to procurement teams on advocating for the support they need to thrive— whether training resources, technology, or other key investments. Watch the webinar on-demand now.

Happy procurement month! Whether it’s taking in a webinar, hosting an open house, enjoying cake with colleagues, or one of these creative ideas, we hope you take the time to celebrate your impact.   

Anyone who has experienced the adrenaline rush of participating in an auction — whether in person or vicariously through popular shows like Storage Wars — knows that the rapid-fire competition and the promise of getting a good deal are hard to resist.

Reverse auctions provide that same thrill in public procurement with a twist — instead of participants increasing their bids over time to win a good/service, they try to outbid each other by decreasing their price incrementally to win the business of the procuring organization.

For a quick primer on reverse auctions in the public sector, see last week’s blog Demystifying Reverse Auctions in the Public Sector.

Reverse auctions can be a highly effective tool for public sector procurement teams to achieve best market value and save time on lengthy negotiations. However, they are not widely used thanks in part to some pervasive myths.

Here, we take a look at the truth behind three common misconceptions:

Myth: Reverse auctions are a form of bid shopping.

There’s no question that bid-shopping is an unacceptable practice in the world of public procurement. However, the two are not the same.

Bid-shopping occurs when the buyer seeks out a lower price from a vendor by privately revealing another vendor’s price (without that vendor’s knowledge or consent). In contrast, reverse auctions give all vendors access to the same information at the same time. For that reason, reverse auctions are a fair and transparent practice (The Procurement Office).

The benefits of this transparency extend to vendors, too. Vendors report that reverse auctions provide an even playing field and take the guesswork out of pricing that often occurs in a traditional bidding process.

Myth: Reverse auctions favour larger vendors.

There’s a lingering concern that reverse auctions shut out smaller players. In fact, the research disproves this: in a survey of reverse auction activity at four agencies, the United States Government Accountability Office found that 86% of auctions awarded (valued at more than $22 million) went to small business (Government Accountability Office).

Reverse auctions make it easier for small businesses to compete due to the low barrier to entry and greatly reduced time investment. And when you consider that eBay has been around since 1995, concerns about vendors’ technical ability to participate in an online auction process are receding.  

Clear and proactive communication with all vendors, large and small, is a necessary prerequisite to a successful auction. Teams can take the following steps to assuage fears about vendor participation:

• Clearly communicate how the process will work, from posting to award, and the logistics of participation;
• Choose a simple and easy-to-use reverse auction software platform;
• Consider holding a practice event to ensure vendors are comfortable with the software;
• Answer questions to minimize the unknowns; and
• Be available during the auction by direct phone and email, in order to address any questions as they come up (NASPO).

Myth: Reverse auctions are an unsustainable practice for cost-cutting.

Another pervasive misperception is that reverse auctions yield unsustainably low prices, resulting in a short-term gain that backfires in the long run. However, both private and public sector reverse auction activity shows significant time and cost savings over successive years.

Massive cost savings, such as this school board’s 64% savings on their hamburger patties contract, are certainly possible with reverse auctions in their first use, as you can expect a large margin to be cut off the purchase price. In subsequent uses, you cannot expect the same magnitude of decreases, or your vendors would soon be out of business. Nevertheless, if used judiciously, competitive bidding through reverse auctions ensures that buyers get the best possible price at that moment through real-time market pricing (Reverse Auction Research Centre).

Reverse auctions are a proven tactic for procurement in the long-term — not as a golden ticket, but as a complement to your overarching procurement strategy.

Ready to learn more about reverse auctions?

Join our upcoming webinar Demystifying Reverse Auctions in Higher Education Procurement on February 21 to learn more about the process and methodology of reverse auctions in the public sector, including:

• Strategies for integrating reverse auctions in your procurement process, from commodity bids to more complex RFPs;
• Tips for getting started with reverse auctions; and
• Real-life examples of successful reverse auction projects.

Real-time reverse auctions can be a significant source of savings — both in time and money — for public procurement teams. They’ve been recognized as a legitimate public tendering format in the US since 1997 and used in federal and state procurement since 1999.

However, twenty years later, reverse auctions continue to be underused in the public sector.

What are reverse auctions?

Reverse auctions (also referred to as eAuctions) are an online, real-time purchasing technique in which vendors present successively lowered bids during a scheduled period of time. While ordinary auctions see bidders competing to win a product or service, in reverse auctions, two or more vendors compete to win the procuring organization’s business.

The goal of reverse auctions is to obtain the best price by encouraging competition among vendors. They are conducted using automated reverse auction software.

Reverse auctions typically occur at the end of a thorough purchasing process. Their success relies on clear specifications and a good understanding of the market. Like any other purchasing technique, they are not a silver bullet! But used judiciously and strategically, they offer significant benefits to your procurement function.

Why run reverse auctions in public sector procurement?

• Cost savings. In the first use of reverse auctions, initial savings are typically around 20% (although savings of  64% and higher are not unheard of!) Whether or not you see significant savings every time, using a reverse auction ensures that you are achieving the best market price at a given time. 
• Market intelligence. The process gives buyers insight into where vendors stack up in the marketplace, as well as the strengths and weaknesses of certain vendors.
• Reducing procurement cycle times. Reverse auctions allow teams to compress the timelines of lengthy negotiations, and reduce the administrative burden on both buyers and vendors.
• Transparency and fairness. Reverse auctions provide all vendors the same information at the same time. For vendors, there is less guesswork on pricing. For organizations, there is a reduced opportunity for favouritism/bias, or the influence of a persuasive salesperson to impact the decision.
• Thorough documentation. All bids are recorded and cannot be manipulated, ensuring a thoroughly documented decision.

Getting started with reverse auctions

With these benefits in mind, many procurement professionals are beginning to explore the potential of reverse auctions in their procurement function. To help connect the dots between theory and practical application, join the upcoming webinar Demystifying Reverse Auctions in Higher Education Procurement, with subject matter expert Michael LaGrassa and Bonfire Client Success Lead Rachel Friesen.

Currently the assistant vice chancellor of administrative services at UMass Dartmouth, Michael has extensive hands-on experience with running reverse auctions for public sector procurement (a total of 25 in his career!) Meanwhile Rachel brings valuable technical insight from her experience in supporting dozens of procurement teams in their use of Bonfire for reverse auctions.   

In this webinar on February 21, Michael and Rachel will demystify the process and methodology of reverse auctions through real-life examples. You’ll leave with a plan of action to evaluate the merits of this procurement technique for your organization.

Are you one of the 42 million weekly podcast listeners in the US? If so, we have some new suggestions to add to your playlist. If not — what are you waiting for?

Podcasts have exploded in popularity in recent years. They offer great stories, inspiration, education, and career and life advice. The digestible audio format is great for multitasking, so you can tune in on your commute, on the treadmill, in the waiting room, or while doing the dishes.

There’s truly a podcast for every topic, including procurement. Here are our three top podcast recommendations for public procurement professionals:

1. Public Procurement Leaders, presented by Public Spend Forum

This podcast provides a unique opportunity to be a fly on the wall in candid conversations about “successes and innovations in the public sector, and the people who are making them happen.”

Interviews range from procurement leaders at the federal, state, and local level, from the Chief Procurement Officer for the State of Alaska, to the Procurement Benchmarking program coordinator at the World Bank.

Try this episode: Public Procurement Leaders Podcast with Jack Pellegrino

This interview with Jack Pellegrino, Director of the Office of Purchasing and Contracting for the county of San Diego, discusses how his department adapted their procedures to help the County respond quickly to forest fire threats. He also covers who the ‘customer’ is in county procurement, and how the department collects and measures internal customer satisfaction as a measure of performance.

2. GovLove: A podcast about local government, presented by Engaging Local Government Leaders (ELGL)

Broadcasting from City Hall in Durham, North Carolina, this podcast will definitely lift your spirits and energize your efforts towards continuous improvement. Hear interviews with ambitious public servants who are working hard to improve government and overcoming many of the same challenges you face. You’ll also gain insight into the day-to-day experience of local government officials and pick up tidbits of career advice along the way.  

Try this episode: Episode #201 Data & Procurement in Boston, MA with Laura Melle & Stefanie Costa Leabo

In this interview, hear more about some of the procurement reform efforts Boston has undergone in partnership with the What Works Cities initiative. Guest speakers discuss how they are reframing the narrative around procurement from ‘the people who say “no”’ to capacity-builders helping other city departments help address their challenges.

3. Inside Public Procurement: Heroic Stories from the Frontlines by Bonfire

Procurement professionals like you are the lifeblood of public sector organizations, dedicated to supporting your agency and the constituents you serve. That’s why we created the Inside Public Procurement podcast here at Bonfire—a unique place where we share stories and discuss topics that matter to public procurement pros. Each episode brings you the latest trends, tips, and real stories from other procurement trailblazers who work tirelessly to bring positive impact to the agencies and communities they serve. 

Try this episode: Episode #1 Driving Efficiency (And Impact) with Cooperative Bids

This interview with Jennifer Frates, Chief Procurement Officer at Barnstable County, dives into the benefits of transparency and cooperative purchasing. We discuss the importance of transparency, the benefits of cooperative bids, and why the public sector should take better advantage of technology.

Listen to Inside Public Procurement on our website, Apple Podcasts, Spotify, or just search “Inside Public Procurement” on your favorite podcast app.

Is implementing metrics to measure your procurement one of the items on your to-do list for 2019?

If so, we’re here to help you get started. In last week’s post, we covered the basics of procurement metrics: why you should track them, where to begin, and some key considerations to set you on the right track. Now, it’s time to select the metrics that make sense for your team and will help you advance towards key organizational goals this year. Here are some options to get you started. 

Procurement metrics for RFP Quality

First things first! If you’re looking to measure the quality of the RFPs you’re sending to market, these metrics offer a great place to start:

• How many amendments are asked?
• How many vendor questions are asked?
• How many times is your closing date extended?
• How many RFPs are cancelled after go-to-market?
• How many vendors responded?

Procurement metrics for service improvement

In public sector procurement, internal client satisfaction is among the most important measures of performance — just as important as supplier performance and cost savings, according to the Deloitte CPO Survey Report 2018. Here are some metrics to capture this:

• Speed of response to internal requests
• Project cycle times, from RFP inception to award (benchmark to establish a baseline for different types of solicitations)
• Vendor performance (measured via ongoing end user surveys/vendor report cards)
• Speed of response to Freedom of Information requests
• Client satisfaction Survey

Further reading: How State of Michigan uses Net Promoter Score (NPS) to measure internal client satisfaction

Procurement metrics for cost reduction

This can be a difficult metric to define, depending on your organization’s process, the types of projects you typically run, and the amount of historical detail you have. Some of the metrics which may be relevant include:

• Hard savings:
  • Purchase price that is lower than the previously delivered price
  • Dollar value of negotiated savings
  • Reduction in a planned contractual price increase
  • Price lower than the budget allocation (where no previous pricing history exists)
• Percentage of procurement spend under management
• Percentage of spend using cooperative contracts
• Procurement operating costs as a percentage of managed spend
• Number of sole source procurements

Procurement metrics for employee satisfaction

The talent gap in procurement is much-discussed, so it is good practice for teams to keep tabs on the happiness of their workforce. Some of the basic metrics for this include:

• Progress towards professional designations
• Hours of professional development training
• Employee retention
• Employee Net Promoter Score or other form of pulse survey

Final thoughts

For many procurement teams, it can be difficult to find the time for any non-essential reporting or measurement. However, getting some key metrics in place can help you save time in the long run by providing clarity on how your team is performing against your goals. With this knowledge, you can direct your resources in the most efficient way possible towards improvement.

Hear more about how public procurement teams can track and benchmark their procurement process in the State of the RFP Benchmarking Study Webinar.

The New Year heralds another set of predictions and priorities for the evolving procurement profession. Among the usual discussions of AI, millennials, and cybersecurity, one deceptively simple directive emerges: the need for procurement teams to measure and share their performance.

Measuring procurement performance is listed among the National Association of State Procurement Officials (NASPO) Top Ten Priorities for State Procurement. It’s also highlighted in SourceOne’s 2019 Procurement Predictions and outgoing Spend Matters editor Peter Smith’s article “Six Procurement Truths for the New Year.”

Why track procurement performance?

So, why is measurement considered a priority by procurement professionals at many prominent organizations?

The reasons are twofold: firstly, numbers are a powerful means to demonstrate procurement’s impact. Well-defined metrics can help tell the story of how procurement contributes to overarching organizational goals. As Smith notes, procurement needs to “demonstrate the value we can continue to add in a rapidly changing and digitising world.”

On the flipside, procurement metrics also help your team identify shortcomings and allocate the time and resources to improve these areas, fuelling better performance in the long run.

Defining goals

For public procurement teams, ‘a job well done’ is not as simple as hard dollar savings. Some of the other important metrics of success include:

• Customer Service
• Risk avoidance
• Transparency
• Employee retention

Before choosing any metrics, it’s valuable to ask yourself or your team “what does success mean?” Spend some time determining the key high level goals that your team seeks to accomplish. If this is new to your organization, NASPO’s Critical Success Areas for State Procurement offer a helpful jumping-off point.

Once accomplished, you can then select key performance indicators (KPIs) and metrics that advance those goals.
Taking time in this step helps you avoid ‘vanity metrics’ and ensures that the metrics you choose have a meaningful impact on the overall strategic goals of your organization.

Leading and lagging metrics

When it comes to KPIs, there are two types:

Lagging indicators: output-oriented, usually an outcome. 

Example: Client Satisfaction survey result

Leading indicators: input-oriented, usually an activity

Example: Adherence to agreed-upon project cycle times

Leading indicators help you to see how you’re tracking on an ongoing basis and make changes if necessary while there is still time to impact the lagging indicators. In the example above, this may involve ensuring that you adhere to agreed-upon project cycle times consistently, as this is likely to cause an increase in client satisfaction.

While lagging indicators may be your objective, leading indicators are a good way to ensure you are improving over time in order to positively impact the lagging indicator.

Need some ideas of what to track? See these Procurement Metrics to Start Tracking in 2019.

Putting the process in place

The next step is to implement a process for collecting and sharing these metrics.

Many procurement software solutions remove much of the manual work of collecting and analyzing your procurement data, providing KPIs in at-a-glance visual dashboards. If this is not possible, seek to devise a system for pulling and preparing metrics that is realistic given your team capacity.

The key to making metrics stick is consistency and visibility — ensure that you have a method for consistently sharing these metrics with your team or key stakeholders so they, too, take ownership in them and can adapt to continuously move the needle forward.

For many procurement teams, putting procurement metrics in place is an impactful step not only to improve your performance but also to share the story of how your team is helping the rest of the organization achieve their goals, too.  

Hear more about benchmarking your procurement performance in the State of the RFP Benchmarking Webinar.

ERPs are nearly ubiquitous in organizations. Common to the accounting and HR fields, they excel at the core transactional activities of a business. However, they often fall short when it comes to handling processes that require flexibility, adaptability, and collaboration.

Let’s face it — procurement is one of those processes that require flexibility and collaboration. Trying to conduct procurement through an ERP system such as Oracle or SAP Ariba can often feel like trying to ‘fit a square peg in a round hole.’ As a result, procurement teams often resort to conducting decisions outside the system via spreadsheets and email — leaving you with incomplete visibility over your spend, unsatisfied stakeholders, and inefficiencies in the process.

Modular eProcurement solutions provide a good alternative to address this challenge. Working alongside ERP systems, they provide a purpose-built software environment to manage the complexities of procurement, contract management, and supplier management. With an emphasis on ease-of-use and adaptability, modular solutions can be implemented quickly, require little to no training for stakeholders, and deliver a quick ROI — often within the first couple of projects.

In a recent ProcureCon webinar, Andrew Wolfe (Wolfe Procurement) and Cam Davies (Bonfire), tackled the topic of how procurement teams can employ modular eProcurement solutions to fill the gaps left by traditional ERPs.

From their discussion, here are the top three advantages of using an eProcurement tool alongside your ERP:

1. Procurement tools are flexible to different types of purchases or procurement strategies.

ERPs can easily handle simple quoting if you have incumbent suppliers from whom you need to request quotes according to pre-loaded parameters. However, they typically provide only one way of doing things from a procurement perspective.

Most organizations need a tool that covers a broad range of purchases and purchasing strategies. Modular eProcurement solutions offer that adaptability for teams and include purpose-built tools to manage the complexities of RFPs with multiple geographies, stakeholders, and suppliers.

2. Modular procurement tools facilitate easier stakeholder engagement.

In a transactional environment where all the buyers are centralized on one team, ERP procurement modules may fit the bill. However, that’s just not the reality for most teams. Especially when the goal of the department is to capture indirect spend, procurement activities are required to be highly collaborative, involving multiple stakeholders whose input is crucial to the success of the project.

Often, ERP procurement modules do not support stakeholder participation in the evaluation process. Even if they do, ERPs are notorious for a steep learning curve — and for occasional users that are in the system infrequently, it can be insurmountable to repeatedly re-learn how to use the system in order to participate.

“Once you train an evaluator, they may only be in the project for a week and then not use the system for another few months, which makes it very difficult as you’re constantly having to retrain your users,” explained Andrew Wolfe.  

Echoing this statement, 42% of procurement practitioners surveyed in the ProcureCon webinar reported that stakeholder engagement was a key challenge in their procurement function.

eProcurement solutions have the advantage of being extremely user-friendly, often requiring little to no training for stakeholders. Furthermore, the flexible set-up enables procurement teams to segment the evaluation to give stakeholders only the parts of proposals they need to evaluate.

The result is a smoother process for both evaluators and buyers. Your evaluators can get in and get their job done quickly, and you have a direct line of sight into where everyone is in the evaluation process, so you can easily manage the project and ensure evaluators have done their part.

3. eProcurement tools foster more innovation.

For companies that want to stay competitive in an ever-changing marketplace, procurement must be a partner in delivering innovation. But it’s hard to do that with a tool that does not adapt to your changing needs and challenges.

“When it comes to fostering innovation, this really comes down to looking for a tool that moves with your business,” explains Wolfe. “I find these SaaS based tools are constantly up-to-date not only with current technology but also with the way things are being done.”

eProcurement tools are purpose built; they’re specifically designed to support the procurement process, meaning they are built to help achieve your goals. As a result, you benefit from continuous improvements to the software as well as general adaptability to your needs — which helps you to deliver a competitive edge to your organization.

For more on how modular eProcurement platforms can address gaps left by your existing ERP, listen to the full webinar.

Once the difficult work of sourcing a supplier is completed, where does your contract go?

For all too many teams, it’s into a filing cabinet or a locally-stored spreadsheet, out of sight and out of mind. Without clear visibility over your active contracts, it’s difficult to keep on top of milestones and ensure contractual obligations are being met — let alone monitor performance or build vendor relationships.

Contract management is a key piece of the procurement puzzle. Here are three examples of how a proactive contract management process can benefit your organization.

Manage contract costs and changes

American City and County reports that the majority of contracted projects end up with schedule delays and cost overruns. A certain amount of change is to be expected — in fact, a study from National Association of State Procurement Officials indicates that a 20% increase in contracts is considered typical.  Nevertheless, it’s imperative for teams to be able to effectively track their contracts in order to ensure contractual agreements are being fulfilled and delays or changes are kept to a minimum.

Columnist Darin Matthews, director of procurement for University of California Santa Cruz, advises, “Stay involved with your contracts, even after award. Make sure you are not the last one to know about any changes or increases.”

In terms of metrics, he recommends tracking the awarded contract value vs. the final contract value, in order to be able to demonstrate the value your team is bringing to the organization.

Consolidate contracts for greater impact

With clear visibility into their contracts, public officials are able to proactively identify areas of overlap or inefficiency and maximize the impact of taxpayer dollars.

A good example of this in action is Seattle’s recent reform of their process for contracting homelessness services, as reported in Governing Magazine. The city worked with Government Performance Lab to drastically reform their contracting process for homelessness services, and the first step was consolidation of existing contracts.

Before embarking on this process, the city had more than 200 separate contracts with 60 providers for homelessness services — one provider had 18 separate contracts. Not only was this fragmented for the city, the lack of funding flexibility was an obstacle to service providers in efficiently supporting the needs of the populations they were trying to serve.

They consolidated 26 contracts held by five providers into eight contracts, offering more flexibility to providers and better value. This was an important step in kicking off a process of contracting reform, which included establishing performance metrics and instituting a results-oriented approach to their contract management.

Use data to promote better contract outcomes

With contract management streamlined, teams are able to more effectively use data to collect and improve delivery of their contracted services. This includes not only troubleshooting immediate concerns to keep contracts on track, but also working with contractors to share performance information and continuously improve performance.

As described in this Governing article, the contract management approach that works for some contracts are counterproductive in other types of contracts. For example social services contracts require a more active and continuous approach to move beyond simply checking compliance to be able to continually progress towards outcomes established for the target population.

Once contracts are centralized and the administrative steps streamlined, teams are able to adopt a more strategic approach to their contract management, such as performance-based contracting or results-driven contracting.

Learn more about how Bonfire’s Contract and Performance Management solution helps you stay on top of your active spend.

In a world where technology has continued to improve the way we communicate and gather feedback, why shouldn’t your vendor performance management be as simple and easy?

In brick-and-mortar businesses, wooden suggestion boxes have been replaced by online reviews or kiosks where customers can hit a ‘smiley-face’ button to signal their satisfaction. Businesses can solicit feedback from customers in a way that is convenient and simple for the customer (leading to better response rates) and prompted in the moment when their experience is top-of-mind (leading to more accurate responses). Rather than gathering dust in a box, feedback is collected in real-time, so managers can observe changes and intervene to correct negative trends.

This same approach can take your vendor performance management efforts from a bureaucratic check-box, to a source of valuable insight into contract health and performance trends. 

The case for more user-friendly vendor performance feedback methods

Vendor performance is just as important to procurement teams as customer experience is to restaurants: it can cost time, money, and internal client satisfaction.

However, many procurement teams simply don’t have the bandwidth to collect feedback on vendor performance—and if they do, the standard approach and tools can look suspiciously like the customer suggestion box: long, complicated surveys with low response rates, sent out manually and infrequently.

To be proactive and stay on top of their suppliers’ performance, procurement leaders need to have a finger on the pulse of their supplier poll. This requires a constant stream of data and information so you can determine trends and insights at a glance.

Technology can help you streamline and simplify your vendor performance management activities. Here are some of the reasons you need to evaluate the way you conduct your process:

• Getting to actionable conclusions faster. Vendor Performance Management solutions take care of the manual parts of soliciting vendor performance feedback (creating and sending surveys, collecting and aggregating responses), so procurement teams can maintain an up-to-date picture of their vendor performance without the tedious and time-consuming work.
• Intervening with performance issues before they become a problem. Frequent feedback gives procurement teams more visibility into the progression of contracts, allowing teams to zero in on performance issues before they impact the organization.
• No more pulling teeth to get survey responses. As many teams have learned from experience, getting contract owners to fill out vendor performance surveys can be a headache. Modern survey methods meet stakeholders where they already are—and in today’s world, that means mobile devices—and reap the rewards in their response rates.

See how Bonfire Vendor Performance Management helps you drive continuous improvement in your vendor relationships.