Friday, 27 September 2013

Sourcing my extension (part 2) - Go Live!




This is part 2 of Nick Drewe’s foray into a domestic eSourcing exercise for his house extension. Nick’s tender has now gone live!  You can catch up on part 1 here.

So last Friday evening I hit the button and made my event live.  Invitations were sent out to 83 builders in total, although since then I’ve added a further 9 based on recommendations and referrals.  I also forgot to include the builders who provided the original quotes, which wasn’t very fair of me, so I’ve rectified that and included them, should they wish to revise their offer.


I must admit, there were mixed feelings of excitement and apprehension about hitting that button. By the time the screen refreshed, 83 builders around Bristol received the invitation from me (we use an email alias on Market Dojo to make the emails come from the user and not from a generic no-reply@ address to ensure any replies make their way back to me).  They would also know where I live!  However, this is a genuine opportunity, and I am giving everyone an equal chance of winning the business, so I’ve no concerns.  I was more intrigued about what would happen next.

In my previous post I stated that I should start ringing round those who were invited in order to maximise participation.  Well, another confession here, we were exhibiting at eWorld on Tuesday and so this week I’ve been absolutely swamped and not made a single outbound phone call to them.  Thankfully the builders have been much more proactive than me, and even over the course of that very first evening on the Friday, I received 7 registrations, 2 of which proceeded to download the tender documents.  I even had my first site visit on the Sunday, all arranged through the Message facility in the software.


I was also informed that three of the participants I invited to the tender had invalid emails, which meant that the software picked up the delivery fail message and flagged it against the participant in question, be it for a full mailbox, unrecognised email address or some other reason.  It gave me the chance to find an alternative address for them or, consequently, discover they were no longer in business.

I made the most of my journey back to Bristol from eWorld by using the software on my smartphone, where I sent out some reminders to various categories of participants, i.e.:
  • Those who hadn’t responded at all, to which I sent reassurances about the validity of the process, since builders do get a LOT of spam.
  • Those who had registered but not accepted the invitation, to which I sent a reminder on what to do.
  • And those who had accepted the invite but had not downloaded the documents, to which I also gave some further motivation.

So let me fast forward to where I am as of today, exactly a week after publishing the tender:  

I have 92 builders on my list.  84 are still approved to take part, as 5 builders had no capacity until well into 2014, and 3 were no longer in business.  Of those 84, 20 are registered and 16 have accepted the invitation.  Interestingly 4 of them registered using the Invite Code, which is a unique key that lets people who were not on my original list apply to take part, be it by word of mouth or referral or whatever.  I approved their access to my tender having looked through their websites.  

14 have downloaded the drawings and I have no fewer than 9 site visits planned over the next few days - there goes my chance of writing thank you letters for our recently received wedding gifts!

I’ve also made an edit to my questionnaire since go-live, as I omitted a rather crucial question of asking whether the builders are VAT-registered.  It would be rather hard for me to compare the quotes without this knowledge.

I’ve also had to think about my Lot structure, using market-informed sourcing if you will, in that some builders are experts in loft conversions but not extensions and vice-versa.  Therefore I might even be looking to award separately, although again there is feedback that awarding the total job to one outfit has cost advantages.  My Lot structure allows for this expression of capability, and so I shall await the market feedback before considering my award position.

Feedback so far has been overwhelmingly positive.  This approach has helped the builders to have structure and a central place to refer to.  Given that IT is not integral to their day job and that in some cases they don’t even have their own computer, it was always going to be a hurdle, especially as I have no time to hand-hold people through the process and nor do they have time to sit at a computer for long periods.  But we did design the software on an entirely self-service model and so far, so good.


Stay tuned for part 3 when my hectic weekend of site visits will be concluded and we might even have some competitive quotes in.  Fingers crossed!

Friday, 20 September 2013

Sourcing my extension! (part 1)

This is a multi-part article from Market Dojo co-founder, Nick Drewe, who is currently planning a house extension and is embarking on the sourcing phase of the project.  We’ll let Nick introduce in more detail below…..

I recently got married and had a fantastic honeymoon in Turkey, co-incidentally the first time I’ve had more than a week off work in well over 3 years!  Now I’m back, our next task as a married couple is to build a major house extension.  

Up until now we’ve had the plans drawn up by the architect, giving us an indicative budget of £70,000.  We’ve had all planning and building regulations approved and we’re in the midst of adhering to the Party Wall Act (not fun - but that’s for another time).  Our architect, Ben, is helping us manage the whole project, given his experience and the fact he lives 10 doors up the road from us!

Ben drew up a very comprehensive tender package, including all drawings, national standards, specifications, and a detailed list of the scope of works, and has approached four contractors that he has worked with in the past.  Two of those contractors haven’t even bothered quoting for the job.  The other two came in with quotes of £93,000 and £98,000, both excluding VAT.  The quotes have been paper-based and are barely comparable, with wildly different items included within their cost breakdown.  Therefore, not only are they greatly over budget, but I have no confidence that they even fulfill the requirement.

And so I’ve decided to take things into my own hands.  I shall distribute the tender package (all 20 megabytes of it) to the Bristol building trade as a whole to find out a) what the real market price is for my extension works and b) to make sure they quote and deliver exactly what we’ve asked for.

I’m in the privileged position of having unlimited access to the professional Market Dojo eSourcing tool, designed for exactly this purpose.  Over the years we’ve witnessed our clients, including housing associations who are tendering building services like this, save millions.  Some clients run tenders worth just a few hundred pounds.  In fact I recall Hamworthy Combustion, our first client, saving £5,000 on a £25,000 contract by using our application.  Why on Earth should I not use this approach?  Well, exactly.

So this is where I’ve got to so far.  I’ve created a test event on Market Dojo so I can interact with it as a test builder and I’ve invited my brother, who is a project manager in the building trade but is unfortunately based the other side of the country, to do likewise.  This will help us validate the structure and communication of the tender.  I’ve added my ‘Brief’, which gets included in the initial invitation email to the builders, so they will have a heads up on what I’m looking to do and how they can proceed.  I’ve added an online questionnaire for the builders to answer my specific questions such as providing references, adherence to standards, confirmation that their price is all-inclusive, etc.  I’ve decided to score the questionnaire so I can rank the builders based their answers.



I’ve created a robust Lot structure that pairs up with the breakdown of jobs in the Scope of Works, ensuring all quotes that come in are like-for-like and against our requirements.  I’ve uploaded the 20MB of tender documentation so I can track when they download it, but I’ve made sure that the Scope of Works is included with the invitation email to give reassurances to the builders that this is a genuine job.  I’ve also added my architect as a collaborator on my tender so he can dip in and out to check how things are going and can help me to answer the questions.  I’ve even added my wife as a viewer in case she has the inclination to have a look at what we’re up to!

My final task is to pull together the list of builders, i.e. the sourcing exercise.  All I need for Market Dojo is a list of email addresses.  Typically if the tender is being run manually and paper-based, I would be inclined to invite only 3 or 4 builders, since the efforts of burning CDs and posting them out, checking they’ve arrived, having dozens of phones calls to handle the questions which are repeated from one builder to the next, collecting all the paperwork and somehow collating it together despite the incomparable nature of the bids, is all very laborious.  However, since I’m running this online, there is very little extra effort whether I invite a few builders or a few hundred.  Therefore at this point I shall be casting my net far and wide and see how it funnels down.

My first point of call is Google.  Searching for ‘builders in bristol’ and other related terms like ‘house extension bristol’, I’m able to find lots of candidates.  I’ll be asking for references as part of the questionnaire, so at this stage all I need to know is if they look professional, if they mention jobs that look similar, if they are reasonably local, and if they have an email address.  I encountered websites like mybuilder.com a lot, so clearly I am not the first to think of running an online tender process for personal building works, although those sites don’t have the facility to properly manage your tender or to invite builders from outside their system, or even to run a reverse auction to settle the negotiaton if I so please.  Additionally builders have to pay fees, which is not a model I believe in as it reduces competition and the fees would end up being passed on to me anyhow.

I will also ask friends and family for referrals, and scour professional associations for any recommendations as well.  At this stage, the more the merrier.

So as of today, I have pretty much built my tender and found my list of prospective builders.  My action over the weekend is to hit the button and make it live.  At that point I really should start ringing round the builders to let them know I’ve been in contact and that I am a genuine prospect.   That way I’ll increase my chances of receiving the competitive offers and finding that proverbial ‘needle in a haystack’ builder that precisely meets my objectives.

Stay tuned for part 2 as I manage the tender and hopefully get some competitive offers!

Tuesday, 10 September 2013

Our Innovation Portal receives further innovation!


Only a month has passed since our initial release of the Innovation Portal, our unique tool our clients use to request, collect and compare innovative ideas from their supply chains, outside of any formal sourcing or tendering exercise.  Call it a ‘Request for Ideas’ if you will, helping to unite Research & Development and procurement.  

We’ve heard frequent complaints over the years that rigid sourcing exercises penalise suppliers who offer novel ways of solving the problem.  Indeed we’ve been the victim of this on numerous occasions!  Well, this is where our Innovation Portal comes into its own.

As an example a client of ours, a housing association, is looking for new garden designs.  They don’t want to run this as a formal tendering exercise that would be to begin with a standard ‘request for information’, or even a ‘request for proposal’, since it is far more conceptual at this early stage.  However, the Innovation Portal is perfect, as it allows them to understand what the supply market can offer by way of previously unconsidered ideas.  This is helping them gauge their next steps, who to approach and how to approach them.  In other words it is an excellent way for them to build a strategy and create interesting opportunities for everyone involved.

It is a highly encouraging start and so we have rapidly followed up our initial product release with some fantastic enhancements.  In no particular order, here they are:

Improvements for suppliers raising their own topics

One of the key differentiators between the Innovation Portal and an online questionnaire is that suppliers can create their own ideas as and when they want to, and not just when the procurement team runs an exercise.  This gives companies their own portal into which their supply chain can openly collaborate with them.  We’ve made improvements to this process to add more robustness and security around it, as well as making the topic creation process for suppliers extremely simple and intuitive.



Quick and easy scoring of ideas

Once the suppliers have submitted their ideas, we have two types of scoring; a simple rating system or a more complex scorecard.  In both cases we’ve made the process of scoring the ideas actually quite enjoyable and very straightforward to do by adopting sliders.  They even work on mobile devices to ensure all our tools can be used on the go.



Better topic and process management

A clear advantage that the Innovation Portal offers over a simple email-based ‘ideas box’ is that Hosts can manage the whole activity from a central area, including what documents have been sent/received, which suppliers are involved and what they’ve done so far, what messages have been sent/received, what ideas have been generated and how they are ranked, and so on.  We’ve made some important improvements to this process, helping to point the Host in the right direction on what they should do next to reach their goals.



General user interface upgrades

The key to any useful software product is to make it easy to use.  We’ve made some excellent investments in this area to help our new users make the most of the tool.  




Coming soon….Innovation Dojo!

Currently our Innovation Portal is fully integrated within the Market Dojo eSourcing tool.  However, as we branch our product range out into unheard of territory within eProcurement, we would like to develop the Innovation Portal further so send us your ideas. Hence keep a lookout for Innovation Dojo !