Navigating the semantics of Panel Agreements for Local Government IT Procurement

A need for technology has been defined in your department or local government agency. Now you need to procure IT services to deliver the program or project and it’s a minefield. Everyone has different ideas, every department has different needs, and coming to a consensus on the best approach to go-to-market feels like an impossible task, with so many questions needing answers before you even start:

What do you need?

How do the services fit together?

How many departments need to be consulted?

Which vendors do you invite to tender?

When do you need it by?

What are the imperatives in service delivery and capability?

What are your non-negotiables?

Which procurement method do you use? (… after you answer all the other questions first, of course…)

Is a Panel Agreement right for you?

Everything starts with scope. And that is often hard to define with so many stakeholders having a vested interest.

The first few paragraphs of a recent article on Government News from VP Research Analyst (Gartner) Dean Lacheca sums it up quite nicely:

And this is before the official procurement process has even begun! So how do you avoid this trap?

Factor in time

Government purchasing teams take longer than any of the other 12 industries analysed in a recent government procurement survey done by Gartner – a shocking average of 22 months to make their IT acquisition/deployment decisions. This is clearly something that is not sustainable, considering how quickly technology changes.

If you’re considering the traditional procurement route of EOI / RFT / RFI / RFP / RFQ, your first step should be to factor in not only the time and cost of administering the process but also the lead time in realising the outcomes from the project before you actually take any other steps. We’ve found that organisations often either forget to factor that in, or leave that part out of the decision-making process, when really, this is something that should be considered almost above all else. Consider the time and cost from both your perspective and that of the vendors as well, and you may just avoid creating endless documentation to support what could be a relatively straight-forward process with the right experience applied.

For fast time to value, panel arrangements are increasingly popular as a quick and easy way for local government to transact with the wider business population that is already pre-screened to meet your public sector requirements. Panel applications include the pre-qualification of suppliers in order to facilitate easy engagement for fit-for-purpose solutions that meet specific and pre-defined criteria.

Factor in budget

From a financial perspective, the panel agreements also assume an estimated budget, as benchmark fees have been applied at the panel stage based on historical reported data from other organisations and vendors that have participated in previous versions of the panel. This also helps to break projects into smaller chunks, to be able to kick off and progress projects more effectively, and to lower the entry point for smaller suppliers who can apply for smaller commissions without fear of limiting probity or compliance demands.

Are there ways you can deliver on a larger, more holistic technology strategy by breaking the modernisation journey into smaller projects that can fit within the parameters of a panel agreement?

What are the benefits of a panel arrangement over other methods of procurement?

Panel arrangements are great for cutting through onerous processes to engage a specialist to provide a specific project or program.  Panel Agreements are head agreements that are in place, and agreed to by the panel supplier vendors, thereby significantly reducing the time for Local Government to procure and realise benefits from their IT acquisitions/deployments.

Building your ‘A Team’ of skilled suppliers through a panel arrangement ensures:

• Efficiency
  Eliminating the need for an RFP / RFQ or other procurement process saves time, money and resources for everyone involved. Suppliers only have to submit a proposal once for a fixed term, and Procurement only has to select their ‘A Team’ once for that same fixed term. From that point forward, for all projects/services/solutions covered by that particular panel, it’s immediate engagement, fast time to value, and minimal time wasted.
• Value
  In panel arrangements, value is quantified by a long standing and committed partnership with a greater opportunity to define and streamline working styles and deliver better value, at a higher standard, faster. Value can also be attributed to hard dollars with rates agreed up-front, so terms are agreed, and value is clear from the outset.
• Innovation
  If you’ve got an old list of suppliers from an RFQ issued a few years ago, it could be time to update. You could be missing out on new entrants, constantly evolving IoT solutions, and other alternative technologies because your head is stuck in the weeds. Going to market to establish a new panel can re-invigorate and inspire change through finding and engaging new blood to drive initiatives forward.
• Focusing on outcomes over tick boxes
  The pre-qualification process focuses on any number of chosen parameters including insurances, ISO accreditations, Security certifications, reference checks, track record, key personnel CVs, case studies, rate cards, capabilities, and experience. In addition, focusing on team capacity and competency ensures the resources assigned have the necessary skills and experience to complete the task.

It’s time to bring back human intervention

Things to consider with the panel agreement process.

The recent increase in automated processing of the vendor applications for panel arrangement can mean that your IT procurement has been turned into a box-ticking exercise.

Often, we have seen number crunchers (business/finance analysts) in the procurement system (that are far removed from understanding the needs and requirements of Procurement) brought in to solely evaluate the commercials. In these situations, the evaluation criteria tend to be skewed towards pricing as the single-most important factor.

As a result, for Local Government, this changes the procurement process that was initially setup to procure a value/outcome-based solution to procuring an IT commodity based on price. This is unfortunate, because what really matters is delivering outcomes with a trusted partner who ‘fits’ and meets the technical needs and cultural nuances of your project.

We’re an end-to-end technology provider, so you can be sure we understand all of the ways to expedite procurement processes through technology – it’s what we do. However, perhaps it’s time to revert to a bit of old school human intervention to read between those tick boxes in order to find the right partner for you.

When you’re assessing the vendors in a particular panel, it’s helpful to investigate the answers to the following questions:

What is their process?

What are their values?

Who are their team?

How are you connected?

What do you / others know about them?

Do they have client references that you can check?

Do they have accreditations / partnerships with leading technology vendors?

Does their knowledge / expertise extend to – at a minimum – an understanding of your existing solutions that are parallel and may be affected by the project?

Can they go above and beyond to offer you a whole spectrum of ICT services as your needs and scope evolve?

Bonus question: Could they be a trusted and experienced partner beyond the needs of this program or project?

The answers to these questions can give you a holistic view of the individual vendors, and help you separate the wheat from the chaff. Ensuring that your IT Partner aligns with your values, objectives, and ways of working can be an overlooked factor in the panel procurement process that can determine the success of your project. If you have that alignment, it makes it easier to envision an ongoing partnership and establish a client-vendor relationship built on trust and integrity.

Experience is everything

It is true that you don’t know what you don’t know. Fortunately, there is help available to ensure you get the scope right from the start. Finding the right balance of capability and objectivity is key.

Our ability to understand, interpret, translate, and define IT procurement strategies with knowledge from the inside out, offers a unique opportunity to do things differently.

Now is the time to evolve from what you’ve always done and try a different approach!

The team at Nexon provide a broad range of services and capability across the IT landscape. Through a blend of experience, technology, automation, and human intervention, we ensure efficiency with outcomes aligned to your needs. Our consultants work with clients seeking IT procurement solutions: clearly scoping and defining needs, and then expertly balancing technology and humanity to find the right vendor and solution for your organisation.

Our compliance = your peace of mind

And finally, our extensive certifications and accreditations across the IT landscape means we bring the experience and insight you need to procure IT suppliers effectively. This saves time, money, and stress you don’t need with so many other competing priorities on your to-do list.

On that note, we’ll leave you with our current certifications, panels, and expertise in public sector procurement below, but be sure to reach out to talk about how we can make your IT procurement process more streamlined, efficient, and effective. We’re here to help.