Design a buying pathway

Before starting procurement activity, it can sometimes help to better understand the industry that might supply the solution. 

There are several established methods for industry engagement. You can read about the types of engagement that are possible and how to approach them.

Benefits of using this tactic:

• helps validate that the problem statement makes sense and captures the right information and detail
• provides early access to industry insights and expertise
• optimises suppliers’ understanding of requirements to enable them to submit proposals
• can help understand the capabilities and solutions available in the market, and to choose procurement tactics that will best prove and evaluate  
• identifies opportunities for a consortium of suppliers to address a solution
• supplier visibility of the procurement process upholds expectation and perception of transparency and fairness. 

Engaging suppliers during procurement is generally done through open briefings, Q&A sessions and clarification sessions, among others. It is critical to be clear on what information can and can’t be provided to suppliers to:

• maintain the probity of the procurement activity
• provide all suppliers the same opportunity to access that information to ensure fairness
• record all communications for transparency.

Benefits of using this tactic:

• optimises suppliers’ understanding of requirements, enabling them to put forward solutions that solve the problem effectively
• upholds supplier expectations and perceptions of transparency and fairness and improves overall working relationship
• can improve suppliers’ understanding of NSW Government priorities and public procurement processes more generally, enabling their growth and increasing competition
• buyer can develop a deeper understanding of supplier capabilities and shape the procurement pathway accordingly. 

Testing and learning can be done with multiple suppliers within a single procurement process by developing a multi-stage procurement strategy. For example, three suppliers might be shortlisted based on their proposals after a competitive market approach and invited to participate in a proof stage such as a Proof of Concept (PoC) or a trial, before narrowing the field again to one or more preferred suppliers. Each stage generally has its own proposal and evaluation criteria that are reassessed before the next stage, as more information is available about the solutions and suppliers.

Benefits of using this tactic:

• testing multiple suppliers at multiple stages provides greater certainty that a solution is the right one
• offers the ability to select one or more vendors to collaborate on a combined solution or to provide separate components of a solution.

Suppliers invest time, people and other resources when they participate in proofs or trials. Larger suppliers often absorb this cost, but smaller suppliers may not be able to risk such an investment without guaranteeing an outcome. Buyers are encouraged to compensate suppliers for Proofs of Value (PoV), Proofs of Concept (PoC) and trials, even though some suppliers may offer this for free.

Benefits of using this tactic:

• attracts more proposals including from smaller suppliers, who often don’t participate in tenders because they either can’t afford to offer testing or trials for free or don’t believe the time invested will result in the reward of any significant sale
• may result in discovery of a better fit solution rather than just an established one
• improves supplier capability when multiple suppliers are compensated to participate by giving more start-ups and small medium enterprises (SMEs) the opportunity to work with government and learn regardless of the final tender outcome
• diversifies and strengthens the industry by levelling the playing field rather than giving preference to larger enterprises who can afford to provide services for free. 

Note: Buyers should be aware that there may be a need to safeguard the Intellectual Property (IP) of suppliers participating in a co-design, PoC or a trial as part of a multistage procurement, or test-and-learn activities that inform a tender. These should be addressed through the terms of any agreements and communicated transparently to suppliers.

In simple terms, a pitch event is a competitive process where suppliers compete with others in the same field to win business.  

A supplier pitch is a Proof of Value (PoV) presentation that may include the supplier background credentials and capability, solution value proposition, competitive advantages, features and benefits, solution demonstration and technical overview.

In the NSW Government, a pitch is a component of a Request for Proposal (RfP) process where the tender is openly advertised or limited suppliers are invited to participate in the process and submit their proposals.

Benefits of using this tactic:

• including a pitch event in the RfP stage provides an opportunity to compare and evaluate supplier solutions in ways that might not be possible from a written submission.

A hackathon is an activity where software technology professionals collaborate rapidly on software projects and produce a low-fidelity prototype. Teams develop innovative solutions and prototype the most promising ideas in a limited period. Contributors may include enterprise architects, solution designers, service designers, user experience (UX) and user interface (UI) designers, project managers and end users.

In the context of the NSW Government, a hackathon may be part of a procurement process that involves a strategic supplier for the entire government. It could also be a more exclusive event where a limited number of suppliers participate. Suppliers, solution designers, service designers, user interface designers, project managers, business users and end users may be contributors.

Benefits of using hackathon events:

• optimise supplier ability to better understand problems, prepare properly and submit better proposals
• test a solution hypothesis with stakeholders and gather evidence of success before deciding to buy or develop
• provide certainty that suppliers understand problems, can work collaboratively in a time-boxed manner and can put forward tangible solutions/prototypes for evaluation. 

Co-design refers to an approach to designing solutions where community members collaborate in the design process.

Co-design is a well-established approach to creative practice within the public sector. It is often used as an umbrella term for collaborative, co-creative and open design processes. This approach goes beyond consultation by building and deepening equal collaboration between citizens affected by or attempting to resolve a particular challenge. A key tenet of co-design is that users become central to the design process as ‘experts’ of their own experience.

The public sector has adapted co-design to combine lived experience and professional expertise to identify and create an outcome or a product. It builds on engagement processes such as social democracy and community development where all critical stakeholders, from experts to end users, are encouraged to participate and are respected as equal partners, sharing expertise in the design of services and products.

Key components of a co-design process:

• intentionally involving target users in designing solutions
• postponing design decisions until after gathering feedback
• synthesising feedback from target users into insights
• developing solutions based on feedback.

Co-design is a process, not a single event. Additionally, this process can be iterative –  so even after you have released or launched a product, you can still go back to the community to get feedback and design improvements.

If one of the key purposes of open data is to benefit the public, then it follows that governments should work with the public to ensure that open data is being released and presented in ways that meet community needs and desires. Otherwise, they risk pouring a lot of effort into products that may not end up getting used or that are very challenging to use.

In the NSW Government, co-design may be a component of a procurement that involves an all-of-government (AoG) strategic supplier or where limited suppliers are invited to participate.

Benefits of using this tactic:

• Co-design optimises supplier ability to better leverage stakeholder Intellectual Property (IP), understand problems and work collaboratively and iteratively towards a solution.
• Co-design provides ability to test a solution hypothesis with stakeholders and gather evidence of success before making a decision to buy or develop solution fully.
• Co-design provides certainty that suppliers understand problems, can work collaboratively in a time-boxed manner and can put forward tangible solutions/prototypes for evaluation.