Category Framework
Category Framework Overview
Category Strategy & Programme
Guides buyers of digital through collecting and understanding key spend, supplier, market, and business information to:
- Build up category knowledge of digital technology, suppliers and solutions
- Understand the local digitization strategy
- Gather and analyse the information needed to create a Category Strategy and Digital Procurement Programme
Understand the local digital strategy and assess internal programme requirements.
Understanding the local digital strategy, desired technology operating model and aggregating departmental objectives enables procurement teams to develop a targeted list of procurement activities that contribute to each departmental objective.
It is also an opportunity to understand lesson’s learnt from previous projects.
This will enable procurement and internal stakeholders to select the activities that have the greatest impact on high-priority objectives and later assist the procurement team with capability & skills planning.
Understand the local digital strategy
- The first step is to understand the national digital strategy, in order to understand longer term plans and the procurement pipeline that will be required to support digital transformation objectives:
- Procurement teams should have access to the documents, and should be able to analyse the requirements to be able to translate this into a high level procurement plan.
- The desired technology operating model should also be understood, so the procurement decisions can support the targeted end state for digital products.
We start by identifying Stakeholders, and then understanding how we will actively engage and manage the stakeholders.
- The “Stakeholder Analysis” template is a tool to assist in evaluating stakeholder groups and individuals according to their level of criticality to the success of the project and the level of commitment needed to support the change.
- The matrix identifies the groups of individuals who will be directly or indirectly impacted in some way by the upcoming changes.
- This analysis allows for a better understanding of the stakeholder groups, potential obstacles and the most effective way to communicate with each stakeholder group.
- Stakeholder engagement will help the category management function:
- To implement incremental changes,
- Foster a collaborative, informed culture that actively seeks and implements improvement opportunities within the category.
- Steps for engaging in stakeholder management
1.Define Stakeholders: Identify additional stakeholders impacted by sourcing decisions and understand their impact and influence (As shown in the “Internal Stakeholder Analysis Needs Statement” template),
- In identifying Procurement related stakeholders, think about people who will be sponsors, who are involved in the Procurement process, either directly or indirectly, budget holders and people requesting the digital product or service, as well people who will be affected by the outcomes of the procurement, such as end users and implementation project team members.
2.Understand how you will work with the stakeholders, and create value,
3.Communicate with the stakeholders continuously,
4.Demonstrate Category Knowledge to create buy in and alignment on the value created. This is a key step in ensuring the continued buy-in from stakeholders.
Document and assess internal programme requirements
Now that you have identified the relevant stakeholders, the next step is to gather high level requirements and stakeholder values and needs.
- Values will help you to understand what is important to the end user and will help you to work towards procurement enabling outcomes. An example of values could be increased efficiency or better governance.
- Needs will help you to understand specifications and functionality. An example could be that the system “needs” to be secure, or needs to cater for approval chains or data security requirements.
Requirements are formed through interviews and workshops with the identified stakeholders, such as governmental Subject Matter Experts (SMEs), evaluating current processes, values, specifications, processes and previous tenders or request documents
-Use the “Internal Stakeholder Needs Statement” template, available under tools & templates, document to facilitate and gather this information
-Understand and challenge ‘current state’ when appropriate,
-Understand if requirements are critical, optional, or a value add,
-Capture sourcing objectives and document improvement opportunities, if any.
Use the digital category requirements for:
1.Developing sourcing strategies to address all costs associated with the project across all phases,
2.Understand future resource requirements,
3.RFI/RFP qualitative assessments,
4.Determining supplier best-fits with government needs for IT category products and services, measured against both fit for strategy and user requirements.
Content coming soon. Check back for future updates.
- Lead buyer
- Key internal departmental stakeholders
- IT Teams
- Lead department for delivery of the national digital strategy
Design with the User
Successful digital initiatives are rooted in an understanding of user characteristics, needs and challenges. User centred design starts with getting to know the people you are designing for through conversation, observation and co-creation. In a procurement context, it is important to design with users, to make sure that you are addressing the correct requirements, which will enable sourcing the right solutions with the best fit.
Be Collaborative
Being collaborative means sharing information, insights, strategies and resources across projects, organizations and sectors, leading to increased efficiency and impact. Consulting widely is key to understanding and meeting requirements through procurement activities. Collaborating does not just happen accidentally; it requires time, planning and dedicating resources to look for and develop opportunities.
For more information on the Principles for Digital Development, go to https://digitalprinciples.org/
Map the Digital Product Lifecycle across required projects
In order to successfully buy (and subsequently manage) the right digital technology, you need a clear understanding of the different lifecycle elements across digital technology, in order to better estimate the:
- The requirements for each phase,
- The types of costs that come which each phase,
- The supplier landscape that can provide the services,
- Where you will need similar effort across the projects within the overall programme.
Map out the digital product lifecycle across required projects
Now that we’ve identified Stakeholders, and have begun to understand their requirements, the next step is to map these requirements to the digital product lifecycle, to assist us with programme planning.
- Digital technologies can be deployed using a variety of different models, and the total costs associated with the technology can vary depending on individual costs that may be incurred during a specific stage of the digital product Lifecycle.
- We want to be “data driven” as we start our planning our category. Let’s looking at a simple framework for understanding the lifecycle stages of a digital product, which can help us collect data points to be used later. This framework will be used throughout the guide to understand the potential requirements in each stage of the digital product, and will help us to understand potential costs, procurement projects, and skills needed to successfully procure the technology and supporting goods and services – as we put together a programme strategy, and later complete individual projects.
- Consider how the digital product lifecycle applies to the projects you will work on.
- Consider how, at each phase of the lifecycle, there may be specific costs and procurement required, and that this will give you a good indication of the Total Cost of Ownership for a Digital Product, and will help you to take a holistic approach to managing these costs, and sourcing them correctly.
- Having a clear understanding of these phases and corresponding activities will you to understand the full costs associated with each phase, ahead of the procurement. We will explore the concept of “Total Cost of Ownership” in more detail in step 9.
- We can then try to understand the products and services that could be required across each of the lifecycle phases. This information can also help you to understand if the technology will be a ‘permanent commitment’ once procured and implemented.
- Together with your stakeholders, use the “2.1 Digital Product Lifecycle Template” to brainstorm elements of services (both existing and expected) and match them to corresponding supplier cost. This will give you a ‘gross list’ of al the products and services that could be required to effectively deliver the category.
- Use the SDG Digital Investment Framework (more information in the ICT Building Blocks section, and in the attached “Digital Product Lifecycle” template) for ideas the types of digital products that exist, and the ICT building blocks that may be required as components to executing the procurement programme.
- This information will guide you to finding the right suppliers, identifying historic spend, and understanding all associated costs. This tool should be updated throughout the process.
In the next steps of this phase, we will aim to understand our requester and user requirements, and we will look at our existing technology landscape, as inputs into our programme strategy.
Content coming soon. Check back for future updates.
- Key internal departmental stakeholders
- Lead category buyer
IT teams
Be Data Driven
When an initiative is data driven, quality information is available to the right people when they need it, and used for decision making. Here, understanding the digital lifecycle provides additional data points to take a holistic view of digital products and all associated costs.
Be Collaborative
Being collaborative means sharing information, insights, strategies and resources across projects, organizations and sectors, leading to increased efficiency and impact. In order for effective procurement to take place, collaboration is required to effectively understand all requirements and points of view across the digital lifecycle.
For more information on the Principles for Digital Development, go to https://digitalprinciples.org/
Tip: Completing this exercise early on will provide lots of insight into all the possible costs that are associated with implementing and operating digital products. Trends will start to emerge and this will make this process easier as more information is collected.
Be clear with stakeholders about the purpose of this activity so that you get their buy in. This is about building a catalogue of potential costs that will allow the team to have greater visibility over the potential costs, allowing for better procurement strategies, and minimising the risk of surprise costs and procurement later in the process.
Collect and analyse historic category spend and supplier information, across digital spend.
To understand what already exists, and the entirety of spend in the digital category and identify logical spend “families” by documenting similarities and differences between government departments buying habits (e.g., frequency, buying channel).
This will inform future procurement plans.
Collect and analyse historic category spend and supplier information, across digital spend
This step requires building the category overview and “Category Spend Cube Worksheet”, to collect the information needed to make data driven decisions and develop a category baseline.
The “Category Spend Cube Worksheet” when completed, should allow you to create a ‘spend cube” which allows for looking at data from different views, depending on what you are aiming to understand. For example:
- One view could be used to understand where a supplier provides more than one digital product,
- Another could be to set a baseline for savings, if the goal of the procurement in to reduce costs,
- Another could be to understand where there are opportunities for demand aggregation or supplier consolidation, etc
-Document current suppliers (refer to the completed “2.1 Digital Product Lifecycle Template” to get ideas on the products currently being supplied) - Buyers within the designated category work with accounts payable teams to collect payables information, purchase orders, and build a comprehensive database of spend information which is aggregated by suppliers and how the total spend breaks down by government departments.
-You then evaluate services provided by suppliers and identify key industry issues / trends and research additional suppliers - Once supplier-level spend information is collected, buyers must assess gaps in their database and develop an action plan to filling missing data. As shown in the Category Overview & Category Spend Cube Worksheet (Click on Templates section).
-Assess bargaining strength of suppliers - After collecting supplier-level spend information, buyers must verify the accuracy of the aggregated data and begin to drill down into each supplier’s products and services.
-Understand impact of supply, demand, and other forces on pricing.
-Look for potential opportunities to aggregate demand.
The “Category Spend Cube Worksheet” when completed, should allow you to create a ‘spend cube” which allows for looking at data from different views, depending on what you are aiming to understand.
Content coming soon. Check back for future updates.
- Lead category buyer
- Accounts payable liaison
- Operational Buyers
- Internal stakeholders requisitioning supplier services and products
Be Data Driven
When an initiative is data driven, quality information is available to the right people when they need it, and used for decision making. Here, understanding the historic spend data provides the required data needed to make the right decisions.
Reuse and Improve
Instead of starting from scratch, programs that “reuse and improve” look for ways to adapt and enhance existing products, resources and approaches. Reuse means assessing what resources are currently available and using them as they are to meet program goals. Improve means modifying existing tools, products and resources to improve their overall quality, applicability and impact. Having the right historic spend data will allow us to make the right future decisions to re-use and improve. By collecting and analysing spend and supplier data, you are able to understand what already exists, allowing you build “reuse and improve’ opportunities into your procurement programme planning.
For more information on the Principles for Digital Development, go to https://digitalprinciples.org/
Tip: This can be a daunting task but is a foundation activity for category management. It doesn’t have to be completed quickly – take your time and get the right team members to assist.
A good eProcurement system can greatly automate the spend reporting process.
Collect macro and micro-level market intelligence relevant to the selected Category
To better understand current digital category trends as well as to identify key indicators that will help predict market changes in the future, buyers need to gather macro- and microeconomic information.
Collect macro and micro-level market intelligence relevant to the selected category
We’ve taken and internal view on what we have been doing – now it’s time to do external research into market trends and suppliers.
- Use industry reports (like Gartner or Forrester, if available), ICT Building Blocks and internet research to understand the technologies that exist, as well as to help with comparisons, pro’s and cons.
- Use internal stakeholders and experts, and your own findings up until now to leverage internal knowledge and expertise on trends and technology.
Below are the steps with examples on how to gather market information:
- Each of these tools can be used to give you additional insight into market trends and information.
At the end of this phase, we now have collected data from our systems, stakeholders and research, and covered topics like what is required from the national digital strategy, user requirements, existing digital products, market research and trends. We are now ready to use our collected information to create a programme plan – Phase 2 of this guide.
Content coming soon. Check back for future updates.
- Lead buyer
- Key internal departmental stakeholders
- IT Teams
Use Open Standards, Open Data, Open Source, and Open Innovation
This is an approach to Digital Development that can help increase collaboration and reuse. Market Trend Research can help to identify where Open Source and Standards are used and will allow for programme planning that can leverage these benefits where possible.
Understand the Existing Ecosystem
Well-designed initiatives and digital tools consider the particular structures and needs that exist in each country, region and community. External market research will help procurement to match the right solutions to the right problem, through leveraging the existing eco-system. Dedicating time and resources to analyse the ecosystem helps to ensure that selected technology tools will be relevant and sustainable and will not duplicate existing effort.
For more information on the Principles for Digital Development, go to https://digitalprinciples.org/
Tip: Having a clear understanding of the supply market is a critical enabler to good procurement category strategies. Understanding what the range of supplier capabilities are, or understanding what costs drive the industry pricing are all crucial inputs into developing a category strategy.
Supports buyers of digital in developing a strong category programme strategy, including methods to:
- Prioritize category activities
- Track programme progress
- Establish resource and capacity requirements for future planning
- Gain internal stakeholder alignment and support
Develop metrics for key category projects, Identify programme risks, Prioritise opportunities
Create a comprehensive road map for how Procurement will achieve identified economic benefits and category goals.
After establishing specific objectives, and understanding risks, category managers then determine what types of projects best support each category and supplier-specific goal.
Develop metrics for key category projects
Using information gathered from steps 1-4 (such as spend, supplier, and market information), category managers will set specific objectives, projects and activities that will enable the organisation to track toward these goals.
Identify Programme Risks
- Programme Risk Log: It is important at this stage to identify potential risk and issues early in the process. This allows you to build mitigating actions and bring on required resources early on in the planning process.
- It is important to update the risk log as you go through the steps and uncover new information, including change requests, as these will have an impact on financials and timelines. For example in the step below, we will identify where we have potential resource risks. It is recommended to formally update the “Risk and Action” log with any mitigating actions as required.
Using the Risk And Action Log
-This log aims to log all Risks, Actions, Decisions (and later Change Requests). It is important to include a view of Risks and Issues in planning phases, as often, you will need to build mitigations into your project planning. For example, certain risks may require additional resources or cause a time delay. It is important to understand this upfront, so that you can incorporate your findings into your project planning.
-Whilst the projects are in progress, it is important to record Actions, Decisions and Change Requests, as these will affect how the project is completed.
-The tools also provides visualisations of outcomes and can be copied into presentations and reports.
Prioritise Opportunities
- Based on supply market strategies, and internal process levers, and incorporating success factors into planning, a prioritisation of projects should be created, and captured into the “Programme Plan Template”.
- This should be compared to national plans for digitisation for alignment, and in the case of conflicting priorities, the pro’s and cons of the sequencing should be discussed. Any changes to the opportunity prioritisation should be updated into the “Programme Plan Template.”
Incorporate IT programme success factors into your programme planning
- IT procurement success factors should be understood and incorporated into programme planning, to enable the best decision making across all variables:
IT Programme Success Factors
Description
1. Think big, start small, learn fast
Consider the full range of possibilities. Break the idea down into smaller chunks to pilot, and get it right before you scale it. Base decisions on data and customer insights. Split your programme into smaller chunks, so that value is created value within each phase, which can assist with reducing risks.
2. Focus on procurement outcomes, not perfection
Think backwards from the outcomes you want to achieve, and target the use cases that will enable you to achieve these. There will always be integration, automation and APIs to improve capability – you need to dedicate your efforts to achieving outcomes that meet requirements.
3. Multi-disciplinary teams
Transformations need a Finance lead, Business lead, Project lead, Change Management lead, Tooling lead, and skilled developers. All of these resources and more are needed for successful procurement, implementation and transformation.
4. The power of pivoting
Due to the vast number of uncertainties and unknowns, agile working is a critical process. The ability to pivot will allow teams to focus on the most valuable activities, as the programme progresses.
5. It’s all about visibility
The goal of your Programme should be to increase visibility of IT cost allocations. Focus on areas with largest spend and the biggest impact.
6. Leadership will make it or break it
Ensure stakeholders view the programme as a strategic priority and understand the tangible benefits it will bring to their departments i.e. transparency of IT costs.
7. Know your tools
- Understand the benefits and limitations of the platform ecosystem to make an informed choice, with the procurement process as an opportunity to tailor the best tool and technology to the best fit.
Content coming soon. Check back for future updates.
- Lead category buyer
- Internal stakeholders requisitioning supplier services and products
Design for Scale
When procuring digital technologies that are transformative in nature, it is critical to take a “think big, but start small and scale’ approach to ensure an agile approach that builds on successes. As you make technology choices, think about whether they will make it easier or harder to scale, and use this to help design your procurement programme.
Understand the Existing Ecosystem
Dedicating time and resources to analyse the ecosystem, or context where you work, helps to ensure that selected technology tools will be relevant and sustainable and will not duplicate existing efforts. This will assist with identifying risks that are relevant to your individual situation, as well as with assisting in prioritizing initiatives based on what your ecosystem requires.
Build for Sustainability
Building sustainable programs, platforms and digital tools is essential to maintain user and stakeholder support, as well as to maximize long-term impact. Sustainability ensures that user and stakeholder contributions are not minimized due to interruptions, such as a loss of funding. A program built for sustainability is more likely to be embedded into policies, daily practices and user workflow.
For more information on the Principles for Digital Development, go to https://digitalprinciples.org/
Identify the stakeholders, team members, procurement and digital technical needs to execute individual category projects
It is important to understand the resource investment required to complete individual projects, in order to make appropriate trade-offs, and ensure effective allocation to maximize project return.
Identify the stakeholders, team members, procurement and digital technical needs to execute individual category projects
Now that we have an idea of the metrics, risks and opportunities, the next step is to identify the resources required for each project to accomplish set project goals, detailing the specific contributions of each stakeholder, supplier representative, or technology system required.
- Using the ‘Project Resources Template,’ the skills and other resources can be mapped according to criticality and availability needed to execute the programme. The broader team has been mapped in the previous phase, using the “Stakeholder Map” to understand who will be impacted by the project, and this can be used as a starting point.
Content coming soon. Check back for future updates.
- Lead buyer
- Category managers
- Key internal stakeholders
Use Open Standards, Open Data, Open Source, and Open Innovation
An open approach to digital development can help to increase collaboration in the digital development community and avoid duplicating work that has already been done. Programs can maximize their resources — and ultimately their impact — through open standards, open data, open source technologies and open innovation. By taking advantage of existing investments when you are able, you can apply finite digital development resources toward creating global goods.
For more information on the Principles for Digital Development, go to https://digitalprinciples.org/
Tip: The lead buyer takes on a project manager roles in executing large, complex procurement projects. One of the duties of a project manager is to make sure that the right resources and skills are available to the project, to ensure the best outcomes. This means that in order to get the right procurement outcomes, the procurement team will need to take a proactive role in defining the resource requirement need for the programme, and to highlight early on where skills or other resources may be needed.
develop the category progamme strategy and playback to programme stakeholders
Based on the analysis done in the previous steps of the process, identifying the risks and opportunities for each of the category segments, an individual strategy should be created for each of the segments comprised of both internal and supply market changes over the long term.
Lastly, playing back your strategy and findings to the relevant stakeholders will ensure buy in to the plan.
Develop Category Programme Strategy
- Create a comprehensive road map for how Procurement will achieve the identified economic benefits and category goals.
- Use a combination of “Supply Market Strategies” and “Internal Process Levers” to derive maximum value.
“Supply Market Strategies” are the levers that you will pull with suppliers to create value.
| Buying goods or services at the time of need at correct market prices, ensuring you get up to date pricing | Consolidating Procurement requirements with other departments within government, and grouping existing supply to leverage spend. | Investment in small to medium sized suppliers to build capabilities that support the department’s supply requirements. | Traditional tender or bid process, usually conducted as a part of Strategic Sourcing. This helps to ensure that the right suppliers are selected across business requirements. . | Contracting a third party to manage the end to end supply of services. |
- “Internal Process Levers” are internal levers that are based on internal process changes in order to create value.
Playback to programme stakeholders
- The “Digital Category Strategy Report” should be used to consolidate all your findings up until this time into a short summary that should then be ‘played back’ to stakeholders for validation and sign off, ahead of initiating the individual projects.
- If there is a Procurement Council or Committee, this should be presented and approved at that forum.
Content coming soon. Check back for future updates.
- Lead buyer
- Key internal stakeholders
Design with the User
We’ve been designing with the user up until now. At the point of putting the procurement strategy together, it is recommended to play the strategy back to the stakeholders that have been involved to see if the strategy meets their expectations, and to get final input.
For more information on the Principles for Digital Development, go to https://digitalprinciples.org/
Tip: Assess the changes that the new strategy will require and summarise by type (process, systems and organisation) as well as by department.
Project execution
Supports buyers of digital to run individual sourcing projects:
- Execute projects in line with the category plan and address the Total Cost of Ownership associated with Digital products and Services
- Assists buyers with assessing and communicating change management requirements, and understanding adoption requirements
meet with project stakeholder and validate programme objectives and assumptions against individual projects being executed.
All well run projects require alignment between stakeholders on key principles and approach. Having a project kick off, with a formal category charter allows project teams to align upfront, which can greatly increase the chances for project success.
A project charter can set out expectations on goals, resources, scope and timelines ahead of the project, to ensure alignment on these critical success factors.
In the last phase and step, we created an opportunity plan, using the high level assumptions based on the data we collected previously. In this phase, we begin to execute the individual projects. The first step is to kick off the current sourcing project, and align stakeholders on the project data, timelines, objectives and required outcomes.
Project Kick Off
- Start by identifying the sourcing project stakeholders and executive sponsor or steering committee,
- Document addressable spend, preliminary savings levers, and savings targets/budget targets (provide a more detailed spend analysis, focusing on suppliers and spend related to the specific project in progress),
- Allocate resources and roles / responsibilities (do we have the right technical and functional representation?),
- Conduct category kick-off meeting and draft charter using the “Category Charter” template.
Validate Programme assumptions and objectives against individual projects being executed
The Kick off process should include a validation of programme assumptions and objectives (as previously gathered and summarised) as compared to the current sourcing project in progress, as overall programme objectives may differ slightly from the objectives of individual projects.
-Validate results of Phase 1 and 2 (Programme Planning) or other current documents and gather additional info as needed | -Validate objectives – for the specific project, these could include: |
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Once done, a project plan should be created, catering for the following phases of the project:
Once the project assumptions and objectives have been finalized, along with resources timelines, the data can be incorporated into the final “Category Charter” (use the template provided), which should be signed off with the signatures of the sponsor and steering committee, if applicable.
Incorporate sourcing digital success factors into your kick off meetings and planning
- Sourcing digital success factors should be understood and incorporated into programme planning, to enable the best decision making across all variables:
Sourcing Digital Success Factors
Description
1. Ensure maximum involvement
Consult widely during the process – the best ideas come from people with real experience of the issues, so get their input. A collaborative project will ensure buy-in to joint outcomes.
2. Leverage tools and frameworks
Sourcing and category management is a well defined process area. Use tools and frameworks, like the ones contained in this guide, and others, to ensure efficient and repeatable processes.
IT and Digital frameworks, like the “SDG Investment Framework” and ICT Building Blocks, can help you to quickly make sense of digital applications.
3. Use governance as an accelerator, not a process
Governance in pubic procurement is used to protect and control the usage of funds. Procurement professionals should be wary that governance does not become the process, but rather used as “safety rails in an efficient and well run process. Governance provides the “safety rails’, strategic sourcing provides the process. The better the safety rails, the faster you can go.
4. Don’t be afraid to restart a process
Strategic sourcing works best when you are able to adapt to changing information. The process involves collecting information to inform next steps – if the information leads to revising strategy or decisions, then that should be done – just make sure that you update your stakeholders and project plans and use project buffer if you have it.
5. Use the suppliers as a source of information
There is no better expert in a specific technology than the supplier of that technology. Use RFI’s and clarification sessions to get objective information, but make sure you are able to see through the ‘sales pitch’. If a supplier says the technology can accommodate a process – ask to see it (via a MVP).
6. Manage the project triangle
A strategic sourcing project requires being able to successfully manage and balance the conflicting and finite project elements of scope, time and resources. In a public sector context, if an element like time is critical and non-negotiable, then resources need to be increased, or scope decreased.
7. Understand what happens after the award
Success in digital projects relies heavily on managing suppliers after the award. Make sure that the supplier delivers on what was promised and you know how to measure it. For example, if a supplier promises named individuals with a certain level of skill, make sure you get what was promised.
Content coming soon. Check back for future updates.
- Sponsor/Steering Committee
- Buying Core Team
- End User Representation
- Project SME’s
Be Collaborative
Project Kick-offs are a great chance to be collaborative, which is critical to alignment on success criteria for procurement. Successful procurement will ensure that the best fit digital product is sourced from suitable suppliers at the right business case value proposition.
Design for Scale
When you kick off your category projects, take a “design for scale’ approach. Ensure that stakeholders are aligned around this approach, and are not expecting a total, implemented solution from ‘day 1’.
For more information on the Principles for Digital Development, go to https://digitalprinciples.org/
Tip: Having a kick off meeting is a critical step in helping to ensure alignment between stakeholders and the project team. This can save a lot of rework and reduce the risk of an unsatisfactory sourcing outcome. It is also important that decision makers and people who will be accountable for the outcomes are present and provide input.
Conduct RFI, Finalise specifications and tender documentation Create project TCO model.
It is important to ensure that the bid package that goes out into the market is accurate and contains all the information needed for suppliers to accurately quote for the products and services required, and for the bid evaluation team to be able to score the responses to find the best supplier/s fit.
The TCO estimator model will help ensure that the bid package addresses all costs across the lifecycle, enabling for a more comprehensive bid package, minimizing the risk of hidden/additional costs after implementation.
Conduct RFI
Use a Request for Information (RFI) ahead of a formal tender to collect more information that will allow you to properly prepare for a tender. Most Public Procurement Legislation requires incorrect tenders to be cancelled and re-issued. In these cases, an RFI ahead of a tender can be a valuable tool to get the information you need, which will help to:
- Fill gaps in information and obtain a deeper level of detail for classification and opportunity quantification purposes,
- Gain information about spend and supplier relationships.
- Understand if their approach to digital will be to “buy” or “build”, the ICT Building Blocks can guide your thinking
Categories in the RFI can include:
| Functional fit: | Does the potential supplier meet the requirements as stipulated in the specifications, bid document or scope of work? |
| What other value adds will the potential supplier have? | |
| Technology fit: | Data model and architecture |
| Implementation | |
| Supplier viability: | Supplier footprint |
| Pricing model |
RFI’s should be distributed and scored.
- Pro – Get more information to create the right sourcing strategy and correct bid packages.
- Con – Can add time to the initial projects (however, likely to reduce the amount of rework later (so saving you time in the long term) and helps to ensure that you get a better end result).
Note: To mitigate the timeline extension required have a project buffer, the RFI process should be built into the project plan, and run in parallel to the “Prepare for Market’ phase, where possible.
Finalise specifications and tender documentation
| Specifications | Tender Documentation – Contract Best Practices |
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Create Project TCO Model
TCO (Total Cost of Ownership). incorporates not only the acquisition cost of digital goods and services (purchase price), but the whole cost from purchase to disposal, across all phases of the product lifecycle. It is critical to understand all cost components to ensure comprehensive cost information is requested in the RFP and factored into savings estimates and supplier best-fit (measured against both strategy and stakeholder requirements).
| Scope / definition | In a procurement context, Total Cost of Ownership is used for | Benefits |
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Approach
- Establish current internal costs, on both an operating and capital expense basis. Use the phase planning map and the digital lifecycle map to assist the thought process. Additional information on factors to consider in calculating the Total Cost of Ownership can be found here: https://digitalprinciples.org/resource/howto-calculate-total-cost-enterprise-software/
- De-segregate and include any corporate allocated costs
- Compare current internal TCO to supplier TCO costs, when received after bidding
- Identify financial and transformational opportunities
- Implement as a control for scenario analysis comparison
Once the tender documentation materials have been finalized, the next step is to issue the tender into the market.
Content coming soon. Check back for future updates.
- Buying Core Team
- End User Representation
- Project Steering Committee
- Project Subject Matter Experts
- Finance Team Members
- Bid Evaluation Team
- Legal or Contract Managers
Use Open Standards, Open Data, Open Source, and Open Innovation
Too often, scarce public and international development resources are spent investing in new software code, tools, data collection, content and innovations for sector-specific solutions that are locked away behind licensing fees, with data only used by and available to specific initiatives. Tender documentation must seek to understand the how suppliers have built or will build their solutions – have they used open standards, open data, open source and open innovation?
Address Privacy and Security
Addressing privacy and security in digital development involves careful consideration of which data are collected and how data are acquired, used, stored and shared. Organizations must take measures to minimize collection and to protect confidential information and identities of individuals represented in data sets from unauthorized access and manipulation by third parties. Responsible practices for organizations collecting and using individual data include considering the sensitivities around the data they have collected, being transparent about how data will be collected and used, minimizing the amount of personal identifiable and sensitive information collected, creating and implementing security policies that protect data and uphold individuals’ privacy and dignity, and creating an end-of-life policy for post-project data management. Tender specifications must address privacy and security.
For more information on the Principles for Digital Development, go to https://digitalprinciples.org/
Tip: Use the ICT Building Blocks, workflows and use cases for ideas on specifications.
Conduct tenders (RFP's), clarify, award or re-issue tender
A properly prepared Market Tender will provide the best opportunity for Suppliers to respond with proposals that best meet internal requirements.
Clarification sessions may be required to better compare offers against each other, or to unpack technical details around a specific proposal. These sessions may also inform if an award can be made, or if there is a large gap between proposals and requirements, it may be better to redesign and reissue the tender, meaning that you are more likely to procure the correct digital product via the correct model.
Prepare for Conduct Tenders (RFPs), Clarify, Award or Re-issue Tender
Conduct Tenders (RFPs)
1.Review internal requirements / external supply market and refine preliminary sourcing levers In step 7, we looked at various “Supply Market Strategies” and “Internal Process Levers” that could be used in sourcing projects. |
| 2.Determine qualified suppliers based on research, RFI, etc. |
| 3.Determine appropriate type of sourcing event (e.g., Open public ender, direct negotiation, etc.) |
| 4.Develop approach for engaging suppliers via selected event type. |
| 5.Create an action plan for executing the sourcing strategy. |
6.Develop the RFP bid package and supplier communications: Bid packages should aim to collect as much structured data as possible, with minimal “free text”, |
| 7.Invite suppliers to sourcing event. |
| 8.Execute the RFP or tender. |
| 9.Allow for clarification questions and answers during the bidding process |
10.Develop quantity/quality tools for scoring the RFP or tender and other materials Use an appropriate weighting criteria. RFP or tender criteria should be weighted across the core delivery, value-add, and ease of delivery with clear requirements to enable suppliers to bid the most economically advantageous offer. |
| 11.Update the project plan, if required. |
Conduct tenders (RFPs), clarify, award or re-issue tender
Clarify
- There are various negotiation styles that may be suitable for different categories. Given the overall recommendations on the types of category strategies to be used for digital categories, a collaborative negotiation style, based on facts and legitimate criteria, and which seeks to make both parties successful, is the recommended approach. In a public procurement context, where negotiations may not be allowed, the recommended approach is to engage in collaborative clarification.
- Refer to the “Clarification Preparation Template” for more information on preparing for a collaboration style clarification workshop, which can be used to understand the supplier proposals and fine tune based on open and transparent discussions.
- Work with short-listed suppliers to ‘generate options.’ The more options you have, the better the chances of success.
Conduct Tenders (RFPs), Clarify, Award or Re-issue Tender
Award or Re-Issue Tender
- Once clarification workshops have been held, and any demos completed, if an offer received meets requirements, the contract can then be awarded.
- If the offers do not meet requirements, or if the clarification workshops have led to a required re-think of the process meaning that the tender needs to be cancelled, consider going back to an RFI to request more information around the outstanding information, together with the information gathered in the clarification workshops, to be able to re-draft the scope of work and bid package.
- Once a project has been awarded, either to a single supplier who will deliver the complete scope of work across the digital lifecycle, or to multiple suppliers each delivering components, the next step is to create a change management plan, and implement the sourcing decisions.
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- Supplier Technical Representatives
- Legal or Contract Managers
Be Collaborative
Being collaborative means sharing information, insights, and resources, leading to increased efficiency and impact. Work with your suppliers to co-create solutions that meet objectives.
Use Open Standards, Open Data, Open Source, and Open Innovation
Too often, scarce public and international development resources are spent investing in new software code, tools, data collection, content and innovations for sector-specific solutions that are locked away behind licensing fees, with data only used by and available to specific initiatives. Use clarification sessions to understand more about how the digital product is (or will be) built.
For more information on the Principles for Digital Development, go to https://digitalprinciples.org/
Tip: The Digital Maturity Matrix can assist you with evaluations. The Digital Maturity matrix is an interactive tool to assist a requester in aligning proposal evaluations with the Principles for Digital Development throughout all phases of the digital product lifecycle.
Download both the Maturity Matrix User Guide and the Maturity Matrix here:
Understand change Management plan and implement sourcing decisions
Projects often fall short after the award has been made. Without the right change management plan and implementation of the sourcing decisions, compliance can quickly be an issue. This step shows you the steps needed to ensure that all stakeholders are aligned on the sourcing outcomes and that the work is operationalised using a clear transition plan to transition the relationship between a new supplier (or an incumbent supplier with a new contract) to the category management / contract owner
Understand Change Management Plan
This supports the category management implementation through active stakeholder engagement and support, including ongoing commitment and sponsorship from executive leadership
Assists the individuals impacted by changes in the materials/services sourcing and procurement processes and governance by providing training, information and ongoing process guidance
- Internal customers – individuals who requisition the materials/services and their functional management
- Category owners and Procurement staff who play a direct role in the sourcing and procurement process.
Communication planning includes the following basic steps, which enable effective and accurate communication to build stakeholder commitment to the success of the Sourcing Project process implementation
| 1.Refer back to your stakeholder analysis |
| 2.Define communication objectives and guiding principles |
| 3.Identify and develop key messages |
| 4.Identify communication channels |
| 5.Develop communication roll–out plan |
| 6.Prepare draft messages |
| 7.Review and approve messages |
| 8.Deliver messages |
| 9.Collect feedback |
| 10.Update communication plan |
Implement Sourcing Decisions
We have now awarded to the successful supplier/s, and created a communication and change management plan. The last step in the process is to implement the sourcing decisions.
- Support the supplier selection process; issue award decisions formally to the successful supplier/s.
- Develop supplier implementation plan including. communications, contracting, etc.
- Execute supplier implementation plan:
- The implementation plan should include guidance on the “buying channel” for procurement post the award.
- This includes understanding how buyers will know which contract to use, creating the right purchase orders against the correct contract, and setting up a catalogue, if an e-procurement system is in place.
- Set up the mechanisms that will be used for monitoring the supplier and work, post award:
- Develop method for tracking against the business case over time,
- Segment suppliers based on risk profile,
- Develop supplier monitoring plan.
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- Supplier Representatives
- Business End Users
- Internal Communications Teams
- Lead Procurement Buyer
Design with the User
Outcomes in digital transformation that have been co-created and designed with the user are more likely to be adopted and more likely to have their business cases realised. Often, procurement agreements are not well received when handed over to users, if they were not involved in the process.
Understand the Existing Ecosystem
Well-designed initiatives and digital tools consider the particular structures and needs that exist in each country, region and community. Dedicating time and resources to analyse the ecosystem, or context where you work, helps to ensure that selected technology tools will be relevant and sustainable and will not duplicate existing efforts. Understanding the existing ecosystem will help to ensure that change management plans will work and be adopted.
For more information on the Principles for Digital Development, go to https://digitalprinciples.org/
Tip: The change and communication plan is intended to be a living plan, where updates are based on the feedback and changing needs of the project and it’s stakeholders.
Category Lifecycle Management
Provides buyers of digital with best practices in all areas of category lifecycle management, including:
- Tracking the overall progress of the category plan
- Monitoring and reporting
- Ensuring compliance in project post award activities in support of government objectives
Collect and validate data to assess the progress of category projects and report progress.
Once projects are executed, it is important to identify both category successes and projects or activities that are falling behind projected progress.
Projects that are falling behind need corrective action to bring them back on track.
Project successes can be communicated to stakeholders as successful outcomes to assist with change management and buy-in, and can also be used as “best practices”
In this step you will be reporting on the overall progress of the digital category programme.
The first part is to draw on previous materials:
- Updating the “Opportunity Plan” and “Risk & Issue Log” from step 6
- Using any project status reports or project plans from step 8
- Transition plans from step 11
- Any other information, such as financial reporting, that may be required
The project and programme plans will help you determine which projects are on schedule and which projects are running behind on delivery. The risk and issue log should have all the reasons as to why certain projects are running behind with mitigation actions.
These documents should be kept up to date through out the project lifecycle in order to better understand what can be done differently for future projects.
- Report at the Procurement Committee or similar forum for Procurement and Department alignment and to ensure Procurement Governance is being adhered to.
- The recommended frequency is quarterly, to allow for agile decision making
- This will allow for corrective action to be taken and resources to be re-allocated as required
- This also allows you to take a more “agile” approach to the delivery of the program, with re-prioritisation of projects as priorities change
Report on Project Progress
Drawing on the different data sources, update the “Programme Status Reporting Template”, ensuring that the report covers at least the following areas:
| This will provide a specific view on individual project health, to enable decisions on corrective actions if required. | Discuss if any projects need to be rescheduled within the overall programme – and understand if this presents resource complications. | Highlight key Risks and Issues, that may require decisions and mitigating actions put in place. Document outcomes. | Provide a view on current resource allocation across cross functional teams and understand if any mitigations are needed. | Provide an overview on budget performance and forecasted performance. |
Remember to include any achievements or success stories and list reasons that these projects were successful.
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- Lead Buyers and Category Managers
- Key internal business partners
- Project Managers
- Key Stakeholders
Reuse and Improve
Instead of starting from scratch, programmes that “reuse and improve” look for ways to adapt and enhance existing products, resources and approaches. Procurement strategies that include
Be Data Driven
When an initiative is data driven, quality information is available to the right people when they need it, and used for decision making. Having the right data informing the category strategy results review will help stakeholders to make informed decisions around course correction – this will assist the digital procurement programme to continuously improve in supporting digital development objectives.
For more information on the Principles for Digital Development, go to https://digitalprinciples.org/
Tip: All of the documents that you have created to date can assist with providing information that can be used to assist with tracking and reporting on programme performance, such as the risk logs, resource planners, programme and project plans, and transition plans.
Reporting on progress will allow stakeholders to make the right decisions, and will assist procurement teams with demonstrating value.
Supplier Relationship Management can lead to higher supplier performance, improved spend and greater supplier relationships resulting from an active and involved approach, which is especially important for the continued success of Digital Projects.
SRM focuses attention on the whole value stream, and involves collaboration by both the supplier and the buyer.
Track Awarded projects against Contracts, SLA’s and KPI’s.
Once a project has been awarded, and handed back to the requesters for implementation, the project no longer forms a part of the programme – however, that does not mean that Procurement’s role is over - the last phase of category management also entails operational management of awarded projects, via supplier performance management, which includes contract management, 3rd party risk management, performance and relationship management.
There are four main areas to consider, described below:
| Proactively identify and monitor risks and facilitate risk mitigation activities. Risks could be around GDPR or regulatory risks, financial risks like supplier Insolvency, Lack of Delivery etc. | Reduce risk by tracking and monitoring adherence to contractual obligations. Contracts need to be operational documents that are managed in daily operations, not artefacts that are stored away and only used in legal disputes. | Drive greater collaboration; and improve performance and innovation by monitoring supplier performance and facilitating supplier development via SLA’s and KPI’s. This focuses on transactional operations. | Optimize supplier management activities to support the potential impact and risk the supplier has on business operations. This focuses on strategic partner relationships – applicable for digital supply partnerships. |
Use the attached “Supplier Scorecard for Digital Products” to give you an idea of what you may need to include in a scorecard for the suppliers. This will need to be further customised, depending on the specifics of the contract that has been entered into.
Understanding the contract model, will greatly assist in managing the contract post award.
Approach | Description | Impact on Government | Impact on Suppliers | When Approach Is Applicable |
Fixed Price | Pay a lump sum to complete the scope of work or provide licenses | Initial cost is known if work is completed without change orders Eliminates extra costs / overtime | Determines the price increases level of risk for the supplier | Scope is defined and cost for tasks can be projected |
Limited Competition | Relationships with multiple service providers are defined and work is redistributed between suppliers based on performance | Secondary providers are available when the preferred supplier is not available Primary providers are incentivized to perform and keep business | Gives supplier incentive to perform and deliver quality work Provides opportunities for efficient / effective suppliers | There is enough volume to share amongst multiple suppliers There is a need to have market pressures reinforced |
Performance Based Contract | Risk / reward structure based on performance | Government & supplier share inefficiencies & costs Reduces contingency | Receive incentive for exceeding expectations Reduces risk | High value strategic offerings
|
Cost Plus | Pay a mark–up in addition to costs | Transparency of costs Known markup | Protection of margin | Geared toward a commoditized offering |
List Less | Standard advertised rates less a discount percentage | Transparency of prices Ability to drive down government’s costs over time | Requires innovation to increase margin | When the offering is a standard service or material readily available in the market |
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- Category managers
- Finance and cross-functional business partners
- Supplier representatives
Be Collaborative
Ensure that you take a collaborative approach to providing feedback to suppliers, based on a wide range of data points. End-users, finance, IT and leadership staff can all collaborate to create a well rounded and holistic view on the performance of a digital supplier.
Be Data Driven
When an initiative is data driven, quality information is available to the right people when they need it, and used for decision making. When it comes to managing supplier performance, it is important that the feedback given is based on facts and not perceptions, which may only represent a specific view. Using data driven scorecards to provide feedback provides transparent and objective facts, which can be used to make informed decisions to improve supplier performance.
For more information on the Principles for Digital Development, go to https://digitalprinciples.org/
Tip: Managing supplier performance is a critical activity, but takes a lot of time an effort. It is important to conduct supplier performance management only with key suppliers, due to the effort involved.
Monitor and report on Category performance. Additionally implement improvement opportunities.
Category Management is about holistically managing the spend within a category and is considered to be a strategic, value adding function that should constantly striving for improvement.
Given the important of digital spend as part of a national strategy, and given the pace that digital spend is evolving, staff involved with managing this spend should be practicing continuous improvement to ensure quality outcomes.
Customer satisfaction surveys capture the feedback from suppliers and stakeholders to give the category team 360 degree feedback on improvement areas.
Monitor and report on Category performance
This can be defined as the practice of actively monitoring and reporting the performance of a category against a number of important factors (e.g. spend, cost avoidance, innovation and strategy realization, etc.) and looking for opportunities to improve those factors.
The “Category Strategy Results Review” should be conducted considering the following:
- At what frequency should the performance be evaluated?
- How to develop & balance performance metrics?
- How will we measure, track, and report performance of the category?
- How will we measure, track, and report customer satisfaction of the category?
- How should we identify the gaps and look out for opportunities to implement improvements?
- How should we monitor and track the long–term, sustained benefits of category performance?
- What elements in a communication plan are necessary for category performance reporting?
- What are the issues to consider?
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- Category managers
- Finance and cross-functional business partners
- IT Team Members
- Requisitioning Departments
- End Users
Reuse and Improve
Instead of starting from scratch, programs that “reuse and improve” look for ways to adapt and enhance existing products, resources and approaches. Reuse means assessing what resources are currently available and using them as they are to meet programme goals. Improve means modifying existing tools, products and resources to improve their overall quality, applicability and impact. Procurement category strategies that use “Supply Market Strategies” and “Internal Process Levers” to source the right digital solutions. Adopting this mind-set will help procurement professionals to focus on the key strategies that can be used to enable reuse and improve opportunities.
Be Data Driven
When an initiative is data driven, quality information is available to the right people when they need it, and used for decision making. Having the right data informing the category strategy results review will help stakeholders to make informed decisions around improvement areas that will enable continuous improvement and enable the procurement function to move up the maturity scale.
For more information on the Principles for Digital Development, go to https://digitalprinciples.org/
Tip: A category strategy results review should be conducted at regular intervals – at least on an annual basis. This will ensure that the procurement team is always focused on improvements and will assist in building stakeholder support, talent attraction, and improved value added services.