Years in the past, suppliers and consumers lined up at public sale homes to wheel and deal, negotiating in particular person to seek out the most effective product at the most effective value (for each events). It goes with out saying that the Web killed the public sale home for on a regular basis B2B solicitation, however the mannequin remained. Although negotiations have been digitized and distant, most distributors and procurers underwent a handbook, human-driven course of. Over the previous ten years, procurement has principally been an analog system managed digitally.
However synthetic intelligence (AI), machine studying (ML), and automation are altering that framework in a method as dramatic as shifting from the public sale block to a laptop computer. It is known as e tender or e tendering, and it is altering the best way corporations handle their procurement cycle in a method that’s much less time-consuming, anxious, and in the end safer in some ways for all events.
E-tendering has revolutionized the best way companies deal with procure-to-pay processes. It’s a digitized, streamlined, and environment friendly course of that eliminates the necessity for time-consuming and error-prone paperwork.
However how precisely does e-tendering work, and what advantages does it supply? That’s what we’ll discover on this easy-to-understand information. Let’s delve into e-tenders and their advantages and talk about tips on how to automate your digital tendering course of.
What’s e-tendering?
E-tendering is an internet course of for submitting bids and proposals for items, providers, or initiatives. E-tendering is all about maximizing effectivity and transparency within the procurement course of. It is a digitized method to sourcing that entails publishing, inviting, receiving, and evaluating tenders on-line.
As referenced above, eTendering is a full transition from legacy procurement motion (reside negotiation or protracted back-and-forth) to an internet AI-powered mannequin. As a substitute of an public sale block, distributors and consumers leverage a intermediary internet hosting the e-tender methods. This is a vital level – adaptation to the brand new mannequin is straightforward, contemplating you don’t have to purchase and set up pricy {hardware} or navigate advanced software program methods. Most often, the person expertise is such as you’d anticipate from any on-line transaction.
E-tendering covers the complete lifecycle of an ordinary tender however is automated. We’ll have a look at the nuts and bolts of how e-tendering works in a second, however, in a nutshell, the procuring social gathering submits customary documentation, and the e tender platform works behind the scenes to marry acceptable and certified suppliers with that purchaser whereas satisfying the spectrum of documentation and compliance necessities.
How Does e-Tendering Work?
E-Tendering permits bidders to submit info in response to a request for proposal (RFP) by a set deadline. It entails producing, exchanging paperwork with e-signatures and messaging, and evaluating suppliers for the procurement alternative.
When soliciting bids by way of an e-tender platform, a procurer points an ordinary request for proposal/quote (RFP/RFQ), an invite to tender (ITT), or a discover inviting tender (NIT). Moreover, a solicitor can prescreen candidates by together with a pre-interview questionnaire and may usually exclude sure attributes if the net procurement platform permits it.
Subsequent, on-line tendering facilitates straightforward screening and engagement. Procurement staff can dig by way of documentation, run due diligence on the potential vendor immediately from the platform, and speak to distributors for additional dialogue. The times of digging by way of e mail threads and attachments to discover a particular information level are gone, as the complete procurement lifecycle lives in a single centralized hub.
Likewise, e tender or on-line tender platforms let reviewers “rack and stack” distributors in line with their due diligence and what every vendor gives. This helps create a one-stop shortlist to simply examine decisions or ship up the chain to senior leaders for remaining approval.
Lastly, with many on-line tender platforms, as soon as the procuring social gathering desires to drag the set off on a specific vendor, the method triggers mechanically upon approval. This consists of sending or confirming remaining phrases pre-negotiated alongside remaining documentation crucial for compliance and data administration.
e-Tendering within the Actual World
Internet tendering is essentially completed on the highest ranges, i.e., business-to-government (B2G) and enterprise business-to-business (B2B). Usually giant and inherently bureaucratic as a result of their scope, these entities sometimes have the best friction when managing procurement and bidding. To that finish, on-line tendering is a game-changer for these large-scale operations.
B2G Internet Tendering
International governments are more and more pivoting to digital tendering platforms to handle bid solicitation. Since regulatory and authorized issues are paramount to authorities procurement, holding the procurement lifecycle on a centralized, accessible, well-documented platform negates most of the complications related to legacy bidding methods. Likewise, a continuing deal with value effectivity means eTendering is a major alternative to cut back paper waste alongside numerous saved worker work hours.
Although e-tender platforms expanded their scope and attain lately, they’ve been pivotal to authorities contracting for greater than a decade. Way back to 2007, London officers used eTendering providers to solicit bids for greater than 2,000 work contracts to arrange for and help the 2012 Olympic Video games.
On this case, the platform stored development contractors and distributors abreast of present and future contracts to allow them to finest place themselves for a aggressive bid. On the similar time, the method saved London officers numerous hours by consolidating the complete course of spanning hundreds of contracts onto a single supply system. The transfer additionally enforced compliance and ensured correct report holding that continues to be auditable as we speak, shielding procurers from litigation or different issues related to extremely aggressive contract bidding.
B2B On-line Tendering
Thermo Fisher Scientific, a big US firm supplying a variety of healthcare and scientific analysis gadgets, is a pioneering person inside the B2B digital tender house. The corporate revealed a case research highlighting how transitioning to a digital procurement mannequin successfully revolutionized its B2B procurement methods and processes. Leveraging emergent tech lets Thermo Fisher clients struggle their largest ache factors: unsynchronized buy order stream and laborious approval processes. Utilizing the brand new platform:
1. Customers securely browsed Thermo Fisher’s on-line catalog, including gadgets to their cart.
2. Ordering groups then submitted the cart to administration for approval.
3. Administration pushed an digital buy order by way of the system as soon as authorised.
4. All through the method, decision-makers throughout the enterprise had visibility whereas sustaining correct data for later use.
Whereas this mannequin aligns extra with “procure and pay” than digital tender, the processes and methods are comparable. On this case, the procurer solicits a sole vendor (Thermo Fisher). Develop the scope solely barely to a number of distributors hosted on a third-party procurement platform, and the impact of internet tendering is evident. On this hypothetical:
1. The procurement social gathering submits a request for bid on the third-party e-tendering platform.
2. Distributors, together with Thermo Fisher and rivals, ship their proposals alongside a digital catalog or stock sheet.
3. Procurement staff browse every alternative, narrowing its choice to a shortlist for approval earlier than making a remaining resolution.
On this case, internet tendering gives the identical profit because the “procure and pay” platform Thermo Fisher developed, with a key profit: moderately than counting on single-source suppliers, the customer may have created a aggressive bid environment, making certain it obtained the most effective product on the lowest value, alongside no matter different stipulations the procurer needed (post-purchase help, recurring order stream, and so forth.).
Advantages of e-Tendering
Whereas our Thermo Fisher instance highlighted some granular advantages to procurement groups, the enterprise-level strategic advantages stand out throughout digital tendering platforms – benefiting customers on the workforce degree whereas simplifying issues from a managerial perspective:
- Price financial savings: a main advantage of eTendering is that you simply’ll cut back labor prices alongside materials prices related to analog procurement.
- Higher perspective: by evaluating every vendor on their deserves inside a closed-loop ecosystem, you possibly can simply assess every bidder’s relative strengths in comparison with each other moderately than discretely analyzing proposals manually.
- Documentation and transparency: for the reason that whole course of lives inside the platform, everyone seems to be on the identical web page concerning scope and {qualifications}. All documentation stays saved inside the digital framework indefinitely or hosted regionally after procurement to fulfill regulatory calls for. Moreover, whereas unusual, sustaining data by way of e-tender or on-line tender platforms helps mitigate and remediate vendor fraud when it does happen.
Challenges in e-Tendering
In fact, as with every new or emergent tech, hindrances and friction is inevitable. Likewise, past merely adopting and integrating the tech, customers will seemingly discover that e tendering has some challenges in comparison with legacy processes:
- Studying curve: although most procurement platforms providing e tender or digital tender providers are intuitive and straightforward for digital natives, you will nonetheless have to onboard your staff to make sure they totally leverage the service and use the system correctly.
- Higher up-front work for suppliers: relying on the customer’s specs, distributors could have to finish extra pre-screening paperwork or doc submission than in any other case anticipated.
- Distinctive bid restrictions: some distributors supply modern pricing constructions past a primary fixed-price bid. In these instances, eTendering platforms could not facilitate this pricing alternative because it is not simply in comparison with different bidders.
Conclusion
E-tendering has been round for some time, however AI and automation developments kicked the business into excessive gear over the previous two years. eTendering smooths the tough patches generally related to legacy procurement and helps distributors and consumers alike maximize their alternatives and safe essentially the most mutually useful contract suited to the duty at hand.
Inside authorities contracting, particularly, the rising weight of bureaucratic and regulatory calls for is lifted by leveraging e-tender platforms. As a substitute of sifting by way of reams of bidder documentation to validate eligibility earlier than assessing the bid, eTendering platforms pre-screen in line with the customer’s parameters. And, since all documentation is hosted in perpetuity (if assured by the platform), consumers can relaxation straightforward figuring out they’ve a clear and accessible paper path.