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May 17, 2019 | Lindsay Kroes
Best value procurement, a competitive process that prioritizes best overall value rather than simply the lowest price, is on the rise in the public sector.
In fact, a study of over 6,600 RFP projects found that the lowest priced proposal won in only 10% of all projects. Conversely, the most expensive proposal won 2.9% of time. The majority of projects fell in the middle, finding a balance between price and technical or qualitative factors in order to determine the best overall value (rather than simply the lowest cost).
Healthcare decisions are particularly well-suited to the best value procurement model because they must always consider patient outcomes above the bottom line. Many RFPs include factors such as service quality, experience, or clinician preference in the evaluation.
Especially when it comes to procuring cutting-edge technology or innovative solutions, procurement teams are beginning to replace the traditional RFP (which provides a list of predetermined specifications) with a problem-focused approach, which presents the challenge to be solved and gives vendors flexibility to propose solutions.
Best value procurement and other innovative methods deliver better solutions at a better price, which is good news for healthcare organizations and the patients they serve.
However it only makes procurement’s job harder. They must involve more stakeholders and ensure well-balanced and clearly specified criteria, while controlling costs and maintaining compliance to rules and regulations — and for many teams, they are doing it all over email, Excel, and paper.
While digitization is well underway in frontline healthcare, it has lagged when it comes to the administrative functions of the organization, leaving much of the RFP process to be conducted offline. This results in high administrative demands on procurement teams, as well as a risk of errors or delays in the process. The sheer amount of time it takes to conduct manual data entry and manage evaluators by email means that many teams have limited capacity to take on strategic procurement projects.
Bringing the bid and RFP evaluation process online eliminates mountains of paperwork from buyers’ desks, cutting the amount of time spent on manual projects by half.
Leading sourcing platforms go beyond efficiency gains to provide workflows and tools that make it easier to manage best value evaluations of RFPs. Here’s how:
RFP decisions often depend on the input of several individuals across the organization, including clinicians, facilities managers, administrators, and others.
eSourcing platforms provide one online location to engage evaluators and centralize communication.
For evaluators, it means that they can log into one platform to find, review, and score relevant proposal documents at their convenience.
For bid administrators, it means that their inboxes are free from lengthy email chains, and their to-do lists are free of manual tasks like scorecard creation, distribution, and tabulation. With clear visibility into evaluators’ scoring progress and automatic score tabulation, bid administrators can focus on facilitating best value decisions, rather than managing administrivia.
Bid administrators’ time is best spent on the difficult task of understanding stakeholder needs and properly balancing scoring rubrics — not on manually copy-and-pasting scores or checking vendor submissions for completeness.
Sourcing software platforms allow procurement teams to set custom weighted criteria, collect structured vendor responses, and automatically collect and tabulate scores, saving administrative labour at each step.
Evaluation tools automatically format large amounts of information, attributes, and specifications side-by-side for ease of comparison and scoring, so decisions are made with all the necessary information at hand.
In a 2016 survey across Council of Academic Hospitals of Ontario (CAHO) members, 76 percent of respondents reported policies, directives, and procurement regulations as “major hurdles” to adopting innovation within their companies.
Sourcing platforms can’t change the laws that procurement teams must adhere to, but they can support procurement teams’ efforts by providing customizable built-in controls throughout the process. For example, online Conflict of Interest form collection makes it easy to ensure evaluators’ impartiality before they are granted access to proposal documents. Sourcing platforms also provide centralized digital records of every step in the decision to protect the organization from legal challenge and make it easy to respond to vendor debriefs.
Procurement teams have an unprecedented opportunity to provide value to their organizations through leading practices such as best value procurement. Sourcing software makes it easier to manage the evaluation of healthcare bids and RFPs.
Lindsay Kroes | Bonfire Interactive