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How procurement and bidding is changing in 2021

May 25, 2021

With new procurement rules to encourage small to medium business participation in the open tender process being introduced around the world, companies seeking to mature their bid management function will need to build new competencies to gain a competitive advantage. This is falling on bid writers and management who find themselves in a newly elevated position.

Since the 2008 Global Financial Crisis – a time when economic collapses exposed multiple weaknesses in governance and accountability systems – arm’s length tendering and bidding has become the preferred method for evaluating and selecting suppliers for major government and commercial contracts.

Now, new spend thresholds and quotas for contracts with small and local businesses are among the latest reforms taking place in the procurement world. Introduced by governments worldwide to encourage competition and stimulate economic recovery post-COVID-19, the improved access to government money means more businesses are tendering for work than ever before.

But government’s tendering footprint has also changed. Where work was predominantly offered to suppliers of construction and engineering and defence-related projects, statistics on procurement categories in 2019/2020 demonstrate how the outsourcing function has broadened to include education and training, IT, health and more.

Government outsourcing is so significant that the  global tendering marketplace is worth more than 15 trillion dollars (statistically, this is around 12 percent of a country’s gross domestic product, or nearly a third of their expenditure). Competition continues to grow each year and more businesses from new verticals, including SME’s and minority businesses, are seeking to build their bidding capability to get a slice of the pie.

The demand for business intelligence, process governance and productivity tools has also increased, with Forbes revealing that 2.5 quintillion bytes of data are being created with each passing day while the data governance market is expected to grow at more than 21.44% CAGR during 2020-2025.

Business Are Restructuring With Dedicated Pre-Contracts Departments

A relatively young occupation in the broader professional market, bid team members often come from project management, marketing or business development backgrounds with the majority having bachelor and/or master’s degrees. Many have specialist industry or technical knowledge such as engineering.

Relatively inconspicuous compared to their pre-sales colleagues, bid managers have recently become equally critical for capturing a pipeline of business that can sustain and grow a firm. As such, bid management processes and the role of the Bid Manager is being elevated to executive status, directly reporting to the CEO and Board.

This is reflected in the increasing number of job vacancy ads for dedicated bid managers to head up multi-disciplinary and cross-sector global bid teams.

Practitioners in today’s environment have consequently changed quite significantly. Rather than being focused on technical writing, bid management roles are extending to place greater emphasis on the end-to-end process requiring information facilitation, leadership, stakeholder and project management, and coaching across dispersed environments that support globalised and remote workforces.

Accompanying this elevated role and visibility in the business, is resources. It’s more common for the bid manager to have his or her own cost centre and dedicated resources, and bid management tools that support best practice processes are now being recognised as essential.

Technology is Changing the Bid Writer’s Role, Too

Despite its representative value, the bidding industry has failed to innovate at the rate of other areas of the procurement supply-chain like eCommerce.

The reliance on document and file repositories, excel spreadsheets, whiteboards and email trail is a shining example of an industry that has been expected to contribute to top-line results but not given the tools to do so. Without  leveraging technology opportunities, bid management can be grossly inefficient and costly for businesses. Companies spend up to 22 percent of their operational turnover – or 4% of the contract value – for the chance to win just 1 out of 5 contracts. For SMEs, this figure can be as high as 5% of their annual revenue with no guarantees for success.

As businesses mature their tendering processes, bid managers and writers will be responsible for incorporating advanced bid management tools to improve bidding capability and capacity, as well as reporting on company, regional and business unit contract revenue data and content analytics.

Multidisciplinary Roles

Although notoriously stubborn to change, out of necessity, procurement evolved quite rapidly in the face of COVID-19.  Frantic cancellations, delays and demands for unprecedented volumes of equipment forced companies to rethink how they plan, react, connect and respond with their ecosystem of suppliers, external partners and customers.

Bid managers and writers, suddenly pulled off cancelled bids had to reassess how they could use their time proactively to add value to the business.

As companies emerge from the pandemic, bid management has once again evolved, with positions shifting from satellite departments to being embedded as leaders in Sales Operations, and champions of the end-to-end process to position their companies to win and deliver world-defining projects for their clients.

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