Robust Tender Based Business System Procurement – essential for a successful high value outcome

Greetings

One of the problems faced by many businesses is that they start the implementation of their ERP, CRM, WMS, TMS, AI, or other business information system implementation on the back foot with a one sided contract that protects the implementer but does not protect the client.

I offer a robust tender based procurement approach which ensures that the market is scanned for the most suitable product and implementer and that there is a tough contract that covers all eventualities.

Please email me to arrange a call to discuss your requirements or visit my website.

   Succeed by engineering against failure One of the characteristics of a successful construction project is a robust tender process and enforceable contract that protects the client as well as the contractor.  I have drawn on that approach by developing a robust tender pack with a Request for Proposal template that runs to over 60 pages and which ensure that the interests of the client are safeguarded.

Robust Tender Pack and Process

The tender pack and the tender process are critical to ensuring you select the most appropriate software and the most appropriate implementer and that you end up with a solid contract that protects the client’s interests.

The pack includes:

1.     Robust Request for Proposal (RFP)

The Request for Proposal document is the heart of the procurement process.  It should be a well proven document that contains all necessary clauses to manage both the procurement process and lay the foundation for the project.

It should set out the stages of the procurement process and the specific contractual requirements for the configuration, customization, testing, deployment and commissioning of the system.  The RFP should form the basis of the final contract.

2.     Strategic Essence based Business Requirement Specification

Refer the article on “Strategic Essence: The Missing Link in Business Information Systems” for more information on this point.

The Business Requirement Specification should be drawn up by the Strategic Advisor to the CEO in close consultation with the executive team and operational management.

3.     Detailed Bill of Services

In the construction industry the “Bill of Quantities” is central to quoting for the work and to executing the work.  In this case this is replaced with a “Bill of Services”, a detailed draft schedule of all the work that it is expected in order to execute the project.

Milestones for partial and complete release of retention are tied to this plan.

4.     Precision Configuration

The two enduring elements of a Business Information Systems project are the configuration and the knowledge and experience of the people who use the system.  Of these, the most enduring is the configuration.  Sloppy configuration is also one of the primary reason for sub-optimal or failed implementation.  This requirement is thoroughly addressed in the tender pack.

5.     Business Simulation Laboratory

A further element of the Request for Proposal is that it prescribes testing of the entire configuration in a Business Simulation Laboratory (commonly referred to as User Acceptance Testing but more rigorous).  The Laboratory is a test environment where the configuration and customization is tested to destruction by the most experienced members of the client’s staff.  They must set out with a full selection of representative data to introduce the most obscure situations into the operation of the software with the express intention of causing the system and configuration to fail until it can no longer be caused to fail.

6.     Formal “Go-Live” Certification

Building on the Business Simulation Laboratory the “Go-Live Certificate” is the final output of the configuration, customization and testing stage of the project.  This is issued at the executive level once the Business Team and the Implementer Team have signed the Certificate.

This is the final safeguard against a failed or sub-optimal implementation and involves a formal certificate with tough contractual wording and backing, such that no one will put their signature to it unless they are fully satisfied with the readiness of the system to deploy and commission.

7.     Prescribed Certificates

The procurement pack should also include a set of prescribed certificates to be used for all aspects of the project such that no element of significance and no interim payments are made without the issue of a formal certificate signed by the business and Implementer team leaders and team members as applicable.  Exact wording of these certificates is to be agreed during stage 3 of the procurement and their issue is to be built into the project plan.

8.     Client Compact

Inherent in the approach outlined above is a very tough and robust contract that will hold the successful bidder to very robust performance terms.

Since the system is to be implemented in the client organization, based on information supplied by client personnel, the performance of the client must, of necessity, also be subject to tough conditions.  This is handled in the RFP by a “Client Compact” in which the client undertakes to ensure that the right personnel are “in the room” for all workshops and that the required review and input takes place on time, in accordance with the project plan.

9.     Executive Engagement

A vital component of the Client Compact is executive engagement, ensuring that Client Executives engage with the process and provide critical input and decisions timeously and in a focused manner.

10.  Facilitation of Change

So-called “Change Management” is a key element of any large business systems project.  The common wording is inaccurate and unhelpful, I prefer “Change Facilitation”.  This is a role that the corporate Human Resources function should be actively involved in.

11.  Bid Compliance Checklist

Returning to the Tender documents, another key document is the “Bid Compliance Checklist”, a list of all the documents that bidders are required to submit as part of their offer and the sequence to be applied in the document pack submitted. 

12.  Bid Adjudication Schedule

The Bid Adjudication Schedule is developed by the Executive Team, facilitated by the Strategic Facilitator and comprises a hierarchical classification of the Key Criteria to be used in adjudicating the bid with cascaded weights indicating relative importance.

13.  Prescribed Bid Table of Contents

A detailed “Bid Pack Table of Contents” should be provided which prescribes the Table of Contents that bidders must use for their offer.  This ensures that competing bids can be easily laid out next to each other and compared on a section by section basis.

14.  Comprehensive Pack of Reference Documents

In order to make the required scale of the project visible, the Tender pack must include a comprehensive set of reference documents as a minimum requirement.  This should include samples of all reports, spreadsheets and outputs of custom software that is to be replaced.  The goal is to define the current state as comprehensively as possible.

15.  Data Warehouse and Business Intelligence

As a general principle any new system should be accompanied by a Data Warehouse and Business Intelligence component for analysis and reporting purposes, particularly across multiple systems and for retaining historical data from the system being retired.  Provision should be made for this in the RFP or it should be explicitly excluded.

16.  Three Stage Procurement Process

I advocate a three stage procurement process geared to spreading the net as wide as possible to start with in the “Market Scanning” stage, refinement of bids with selected bidders in the “Select Preferred Bidder” stage and then detailed discovery of the business and the software resulting in the final project plan, fixed price and formal contract in the “Detailed Discovery, Finalization of Project Plan and Contracting” stage. 

Conclusion

I have used this approach successfully to conduct fixed price fixed business outcome projects.  If you are about to embark on a business information system procurement this is the only way to do it.  Please reply to this email or visit my website  to arrange a call or visit to discuss how I can help you.

I offer advisory and facilitation services with regard to the application of these principles and would be delighted to discuss how I might be of assistance.

This same document pack and approach was recently applied to a warehouse roof refurbishment project so is very versatile.

Please refer to my website for more information.

Yours sincerely,

Dr James Robertson

James A Robertson and Associates Limited

Assisting clients to thrive through effective and efficient application of Business Information Systems