eSourcing upside-down. Events from your suppliers' perspective

As a strategic sourcing software company, it is typically assumed that the buying community is our only customer.

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Tuesday, October 15, 2019

As a strategic sourcing software company, it is typically assumed that the buying community is our only customer.

However, in the last twenty years, we at Scanmarket have come to believe that all the stakeholders in a negotiation need to be treated well in order to assure a successful outcome. You can’t create a competitive market if suppliers aren’t willing to participate. 

At Scanmarket, we have the privilege of interacting with suppliers/bidders every day. Whether it is managing events, conducting market surveys, or conducting training, we get to speak with suppliers in every industry and geography through our unique QuickCall support functionality. Through these conversations, we frequently hear that suppliers:

  • Are keen to participate in eSourcing events
  • Want to compete fairly
  • Would prefer to cooperate rather than be adversarial
  • Understand the buying organization are looking for savings and/or best overall value
  • Above all, they want to win business


One of the key tenets of negotiation theory is “know your counterpart”. To that end, when designing and conducting your project keep in mind these seven things that your suppliers/bidders ask or want to know:

1. Don't further complicate the tendering process with complex, clunky systems
2. Don’t leave me hanging
3. Let me know about the competition so that I can highlight my strength
4. Give me a very specific target to shoot at to get a better bid
5. Tell me how you will make your decision so I can focus my efforts
6. Let me know if you want creative solutions or just a quote
7. Be honest with me, and I’ll be honest with you


1. Don't further complicate the tendering process with complex, clunky systems

Suppliers want to spend their time impressing buyers by creating their best possible responses to your questions and submitting their most competitive bids to win your business. They do not want to waste time trying to figure out how to navigate complex, clunky eSourcing systems, how to register as a supplier, how to send and view messages to and from the buying team, how to upload files, how to submit their responses, etc.

The reason we know this, is that we often get great feedback from suppliers complimenting the Scanmarket solution on ease-of-use, intuitiveness and efficiency, whilst hearing some alarming anecdotes regarding other, less user-friendly systems. Creating extra, unnecessary hoops for suppliers to jump through in the form of complex, clunky systems can ultimately reduce participation levels and erode the competition buyers are working so hard to increase.

2. Don’t leave me hanging

Suppliers sometimes require technical support during a busy day of attending to customers’ needs and trying to win new business. In the process of completing a tender response a supplier should not spend time holding on the line, drafting emails or awaiting responses. Technical support must be quick and readily available with as little disturbance in a working day as possible. We know suppliers love the Scanmarket QuickCall support service. Simply click a button and receive a call from our team, usually within 1 minute.
Our technical team are all in-house system experts, trained in procurement.

3. Let me know about the competition so I can highlight my strengths

A frequent misconception among buyers is the perception that only they fully understand the market. This is not always the case. Remember, your suppliers work their specific category all day, every day. They already know their likely competitors and the relative advantages of each.

Sharing information about the market can build goodwill even when the bidders already know the provided information. Depending on your negotiation strategy, you may choose to conduct an open conference call with all bidders to discuss specifications or your company goals. It’s also possible to use the many system feedback settings (e.g. rank-based bidding) to communicate to bidders their position relative to the competition. This will not suit every situation, so weigh your options carefully and enlist an expert when needed.

Better still let suppliers know that you are taking their strengths into consideration and build all price and none-price factors into the sourcing event, penalizing poor elements and rewarding strong elements of suppliers’ offerings. This way suppliers know that the best overall value offering will win the business, not just the lowest priced.

4. Give me a very specific target to shoot at to get a better bid

During the bidding process, the vast majority of interactions with suppliers, concern specifications. Suppliers build their bids and try to win your business. In doing so, they want to make sure they provide what you need, at a margin that works for them. To be able to do this, they need to understand exactly what you want and need. 

While this requires more preparation prior to an event, it will be in your long-term interest to build very detailed and clear specifications. Without a clear target, bidders need to build in “fudge room” to account for unforeseen requirements. Fudge room means inflated bids from suppliers and lower savings for you. Better specifications will also make your evaluation process simpler. 

5. Tell me how you will make your decision so I can focus my efforts

When it comes to communicating your decision criteria, there is a very fine line between disclosing too much and too little. Determining how much of your decision criteria to disclose is one of the most important choices you need to make in any significant-sized bid. 

Do’s: 

  • Acknowledge when you will be using non-price evaluation factors and what those are
  • Provide the same information to all participants
  • Solicit alternative proposals when appropriate
    •  

Don’ts: 

  • Provide specific factor calculations for things like incumbency or quality
  • Communicate a specific savings target
  • Accept alternative proposals when you’re looking for a specific quote
      •  

6. Let me know if you want creative solutions or just a quote
Not all categories or bids are created equally. Sometimes, you try to solve a complex business problem and other times you’re simply looking to fulfill a need. Suppliers are usually happy to provide creative, complex proposals. This gives suppliers an opportunity to deliver a differentiated bid that highlights their strengths relative to other bidders. However, are you just looking for a quote, then don’t waste their time. Be upfront with your bidders on what exactly you’re looking for. They will reward you by making your life easier when it comes to evaluation. 

7. Be honest with me, and I’ll be honest with you
Make no mistake, at the end of the day this is still a negotiation. Suppliers want to know that you are conducting an open and fair competition. Frequently, suppliers are under the impression that a sourcing event is just a “fishing expedition” and the buyer has no intention of switching suppliers.

You set the rules, so you must ensure a level playing field. For eRFx or eAuction events, never invite a bidder you’re not willing to do business with. If you conduct too many events where you’re not willing to switch, suppliers will stop participating.      

By understanding what your bidders want and need, you will build better, more successful events that will generate value for you and keep bidders coming back.       

For more information on these approaches or to learn more about how Scanmarket can help you achieve your business objectives, please visit us at www.scanmarket.com

For more on implementation click here.

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