Scalability of Interactive Procurement Processes

Interactive procurement processes open up the channels of communication between supplier and buyer. They enable both sides to get a better understanding of the requirements and the solution that allows better deals to be brokered, bigger pies to be baked if you like. They also allow the gap between what the customer thinks they are getting and what the supplier is able to give to be narrowed. But often these processes are seen as complex and expensive exercises that require extended periods to execute. What if they could be adapted to allow any size procurement benefit from improved communication between the buyer and the seller.

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What can we learn from the Competitive Dialogue process model?

Competitive dialogue is an approach to market that is somewhat akin to parallel negotiation, but instead of hashing out the finer points of the final contract, the aim is to have the market refine the specification before it is published to invite final offers. It utilises the additional parameters of shared intellectual property and a collaborative process in a controlled environment that retains competitive tension through to the signing of the final contract. First written into European procurement regulations in 2006, the methodology has become a preferred method of market engagement for complex projects in the UK and it is now written into the procurement policies in New Zealand, but it is largely unheard of in Australia. The process is designed for the strictly regulated public sector procurement environment of Europe, but is there something to be learned for other environments?

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