It’s easy to make the case for automating formal solicitations for public bids because regulations demand a process that is complex and time consuming. Sourcing automation centralizes vendor registration, document posting, and online notifications, making communications straightforward and easy. Yet, I often see these same organizations using manual processes that rely upon email, fax, and telephone quotes for smaller transactions. Sure, you don’t have to worry about compliance issues, but using sourcing software for managing informal quotes makes the job easier.
I can already see my detractors shaking their heads, “It would take too much time to bid small informal quotes.”
Let me be clear, I am not advocating the same process, but rather the use of the e-Sourcing platform to manage the process. Using e-Sourcing software to automate the informal quote process provides many advantages:
Efficiency – Let’s face it… Manual processes are inefficient and expensive. While contacting three vendors for quotes seems simple enough, the process of sending emails, responding to questions, transferring information into internal reports and spreadsheets is time consuming. In fact, eBid eXchange users generally reduce sourcing event processing time by over 50%. This savings is just as applicable to small transactions as it is to large ones.
Accuracy – In addition to being time consuming, manually consolidating quote information is prone to error; even the best employee can make mistakes that result in inaccurate comparison. When the information is provided directly into a bid form by the potential supplier, the supplier assumes the responsibility and accurate comparison reports are automatically generated.
Control – In many organizations, the informal quote process is a “loosey-goosey” affair with people throughout the organization doing their own thing to get competitive pricing. Oversight is difficult and reconstructing historical activity is next to impossible. e-Sourcing software makes documentation automatic and oversight easy.
Transparency – While there are no requirements of transparency in the informal quote process, public organizations earn trust by making more information available to the public. In a manual process, the cost of being transparent for informal quotes is too time-consuming (expensive) so few do it. By managing the informal quote process in the e-Sourcing system, publication of quotes and awards is accomplished with a couple of clicks.
Volume – There are simply more small transactions than there are ones that require a formal solicitation process – the ratio can be more than ten-to-one. While the larger transactions get the focus because the potential price savings, automating small transactions provides greater savings in the overall procurement process. Naturally, the point of “volume” is really just an exclamation point to the other points already discussed, but it is an important exclamation point.
To fully realize these advantages, public organizations should implement electronic bidding.
“But, we can’t do electronic bidding!”
I hear that all the time from individuals, but the reality is most people are already doing electronic bidding. For instance, a quote obtained via email is an electronic bid. The same transactions that you can receive via email can certainly be submitted through a secure online form.
Many public organizations have recognized these benefits and implemented new processes for informal quotes using eBid eXchange. Some centralize it under procurement using the extra capacity realized from time savings garnered from formal solicitations. Others leave it decentralized with procurement only providing oversight and support. Regardless of the implementation approach, they all realize enormous savings.