September 4, 2012
I was in a meeting recently discussing a new business opportunity. As part of the discussion, we were talking about processes by which companies select contracts and the concept of an ebay-style auction which I’d not come across before. When it was explained to me, I was aghast.
If you’re not familiar with the process, it starts quite simply with a Company announcing that they have a project or a purchase to make and requesting people tender. This is pretty normal and a number of companies will respond with details of how they would meet the Company’s requirements and what else they can bring to the table. A team of people will evaluate each of these responses – some will be discarded outright as they don’t meet the requirements. Others will be visited, probed, researched and will answer questions, provide demonstrations and generally invest a large amount of time and money in the process. Eventually a list will be drawn up of those companies that the team believes could technically fulfil the requirements.
Then those short-listed suppliers will get a link to a website. There, they will see the contract they’re bidding for. During a set period, they will bid against each other to win – with the obvious difference from ebay that the lowest bidder wins.
That sounds eminently sensible and fiscally responsible. And, to me, it sounds completely and utterly insane. It’s pushing everyone towards the lowest common denominator; to provide the minimum necessary to clear that bar; telling people not to bother – it’s driving mediocrity.
What am I on about?
When I joined SIPhon I had a purpose – I wanted to make sure that when someone spoke about us, they said “Those guys are awesome”. I wanted people to remember us because we were excellent. Because we did incredible work. Because we helped them to make their service and their company better. I was tired of people saying that VoIP was a poor cousin to traditional communications. That it was a budget technology. I wanted to show that we could make a difference.
So we built a company that did that and did it well. We’re good at what we do. We’re flexible. We’re able to all that because we’ve got good people. And this – all of this – this is what makes us better than the next guy.
But what does any of that matter in this system? So long as we can meet the minimum, why pay more, right?
Have you ever had a business relationship that ended up the same as it started? Relationships grow. Companies grow. Nothing stays the same and you often have no idea where the future will take you. Our best partners are those that learn and grown and help us grow with them. Our best customers are those that learn and grown and let us help them grow. But all that requires flexibility. It requires excellence.
There’s no space in that bidding system for excellence – it just keeps driving mediocrity.
I’m not a specialist on purchasing or business so I might be missing something here – if you know what that is, drop me a line below or email me directly. I’m always happy to learn.