Tender Management
Key Guidelines

Shape the tender

Preparing the bid in terms of technical, administrative and economic documentation.

The company may be asked to request and receive permission before participating in the tender and receiving the specification. The content of the specification will be studied, and subsequently the right pricing and products to respond will be determined.

Administrative, quality and technical documentation will be produced to be sent with the economic offer. The offer may also require the provision of specifically labeled samples as well as payment of taxes and bank guarantees.

Objectives

Each step of the participation and submission activities must be carefully planned, assigned and checked to ensure they are error-free.

The pricing strategy should be chosen based on an informed decision-making process, that maximizes the potential return on the tender.

Documentation must be automatically generated following the customer's specifications, as well as being modified and tracked, and be associated to the tender so that it may be retrieved quickly and efficiently. The tender office must have a complete overview of the situation of the tender as well as the current activities in progress, next steps and the critical deadlines that must be met.

Where the tender specifies requirements such as samples, taxes etc. these should be automated and controlled to ensure that they are correctly and timely provided.

Solutions

• Manage participation
• Manage activities and deadlines
• Employ strategic pricing and profitability tools
• Choose products and pricing distributed into Lots and Sub Lots
• Action requirements
• Generate documentation
• Provide documentation checklists
• Register bank guarantees, taxes and expenses
• Manage Regional and Ad-Hoc buying groups
• Sample management

Win the tender

Awarding of contracts to the bidders.

Each company’s submission will be scored on price and quality. The results will be know and the company should note which lots have been won.

The company may be required to produce more administrative documentation and provide guarantees and awarding may be contested by competitors.

Objectives

The awarding moment is an opportunity to collect and manage important data about offered products as well as market competition.

At the same time the awarded pricing offered becomes applicable. The company ERP system must be aligned with the new pricing conditions available to the customer. This must be managed to correctly replace existing pricing where present.

Documentation must be generated and tracked.

Solutions

• Register awarding
• Produce documentation
• Collect competitor information
• Provide pricing to ERP
• Manage Overlaps
• Manage awarding to specific members of the group
• Bank guarantees
• Manage Challenges

Fulfill the tender

Managing the contract with the customer for the duration of the tender.

The duration of the fulfillment period will vary from tender to tender, and can last for several years.

The membership of customers may change during the period, including additional , or removing participating customers.

During this time the customers may request the addition of products and further discounts. It is also possible that the product catalog will undergo changes such as entire product lines being discontinued or replaced with a new ones. The replacing products must be given compatible pricing with the original offer. At the end of this period the customer may request that the tender be extended for a further period.

Objectives

Manage the complete life-cycle of the tender for the entire duration in an efficient, correct and controlled fashion. Ensure that pricing is maintained within the limits defined in the contract to avoid complaints.

Track sales and relate these to the existing contracts with the customers.

Extend contracts where necessary. Ensure that changes to the product catalogue and list prices are correctly managed with the customer to avoid liability and credit-notes.

Solutions

• Manage extension and renewals
• Integrate new products into offers
• Effect product catalogue changes, substitution, flanking and product code changes
• List price changes
• Track Bank guarantees and deposits
• Calculate Free Goods rebates
• Flanking & Substitution, Mass Price changes and Extension
• Manage changes to the customer hierarchy
• Produce documentation and notifications to inform the customer of applied changes and ensure compliance.
• Support relating sales data to contract data.

Value the tender

Extracting value from the tender itself through mining commercial knowledge, to provide insight towards future tenders.

The result of the tender is measured from a profitability standpoint. The customer may have ordered less than was originally requested. This is taken into account when the new tender is created. The sales rep discussed with the customer the product lines that were less profitable to see why they were not purchased, and realised that this was mainly due to lack of training / product understanding. The salesman also discovered that there was another product line that would have suited the customer better in some cases.

Objectives

Have the information from the tender provided to a Data Warehouse so that sales data can be resolved back to the original offer to be able to provide compliance reporting. Review performance and provide insight to the sales rep for the next customer’s tender. Identify product lines that are not performing as expected by the customer. Provide access to the pricing history for the current tender.

Solutions

• Contract Compliance,
• Provide pricing support
• Reporting on win/lose rates, lines, reasons etc.

Improve Tendering

Continuous improvement that a company will follow as strives to become proficient and dominating the process.

The purchased vs awarded quantities will be carefully monitored to ensure that the best value is extracted from the tender. The sales staff will be more closely involved with the customer in the period prior to the creation of the tender to ensure that the product features are well known and appreciated, and to ensure that the right product is offered in relation to the customer request.

Objectives

Know in advance when a tender will take place/happen or when an existing tender is up for renewal or expiry.

Document and manage processes to reduce exclusion rates or missed deadlines.

Monitor and assign actions based on bandwidth and prioritize activities.

Solutions

• Workflow
• Activity Schedule
• Deadlines schedule

Governance

Outside of the event sequence related to a specific tender, a series of activities and concepts must be employed to ensure that the activities are controlled, maintained and managed in an appropriate fashion.

These are put under the header of Governance and are very specific to each company. The system must produce an audit trail that can be followed and certify that the actions the user take are within the processes that have been defined. Tender Management is where revenue is generated and as such it is important that this is controlled following company rules, regulations and guidelines.

Objectives

The data that the person may see, print and actions that the person may or may not take must be configured based on the role the user plays within the team. The software must be certified and activities within the software must follow the processes that have been defined for executing the tender. Changes to the workflow must be designed by people who understand the processes and the importance and consequences of each decision as well as effectuated by people who are trained and authorized to do so. Each time the user makes a decision that could deviate from the "straight path" this should be logged and ensure that a complete audit trail is produced.

Solutions

• Sox Compliance,
• Audit trails / Journaling
• User Role access configuration
• Workflow definition
• Consolidation of IT costs