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1. CHALLENGE / OPPORTUNITY: DATA AND PROCESS INTEGRITY

Key points:

  • Multi-layered security protects the procurement process – not just the data
  • 360’s design helps to protect the data integrity of business-critical systems (e.g. accounts payable)
  • Auditing and tracing deters inappropriate usage without limiting functionality
  • Open access to information fosters competitiveness and good relationships

Relationship management is one of the more subtly complicated challenges procurement teams face because providers of goods and services come in so many shapes and sizes and the nature of the relationship can be highly variable. It is common that a business offering a quote or a tender may:

  • Have existing contracts with the buyer’s business
  • Be operating under a new name and/or structure
  • Be used from time-to-time on evaluation panels (as subject matter experts or consultants)
  • Have their ABN registered to a company, sole-trader, or family trust
  • Be the result of a merger or acquisition that was not apparent to the procurement team
  • Be one of many businesses operating under a single name (e.g. franchisees or state divisions of an entity)
  • Be a division within a large, highly diverse organisation
  • Be a “mum and dad” business with little or no experience competing in an open tender
  • Have tangential interest in the offer (e.g. because sub-contractors will be contractually obligated to deliver the goods and services)

With all this diversity and with each relationship being a financial one, the integrity of the process can be essential to ensure the buyer is getting good value in every transaction. If the providers have confidence in the process and the buyers have confidence in the process, it sets the stage for good relations prior to contract negotiations.

With all this diversity and with each relationship being a financial one, the integrity of the process can be essential to ensure the buyer is getting good value in every transaction. If the providers have confidence in the process and the buyers have confidence in the process, it sets the stage for good relations prior to contract negotiations.

1.1 KEEPING INFORMATION AND PROCESSES SECURE
Keeping info and processes secure

Protecting the data at multiple levels and points in the procurement process is crucial:

  • To ensure integrity is maintained in the process
  • When receiving in-confidence information

360 applies security at five levels so that best-practice procurement policies can be applied. For example, 360 can be configured so evaluators only see a sub-set of a response and cannot be influenced by price or another evaluator’s opinions. The 5-level security has been used to great effect by evaluation teams for many years. However, since taking ownership simplylogical.net has expanded its capabilities:

  • The introduction of consensus evaluations (where the individual assessments are saved but only the consensus evaluation’s scores and risk assessments are used in the final assessment) helps ensure that incomplete evaluations do not have to be excluded from the process and if there is disagreement in the team, the individual assessments are recorded and dissenting opinions are saved
  • Future developments (underway) will introduce additional layers of security and more options for policy setters to align procedures in 360 with their ideals
1.2 KEEPING THE ACCOUNTS PAYABLE LIST CLEAN AND MANAGEABLE
Keeping accounts payable list clean

The longer the list of suppliers is in the accounts payable system, the greater the cost of maintaining the list and the easier it is for an erroneous transaction to go unnoticed and uncorrected.

360, as a system independent from the accounts payable system, can retain providers information through the different stages of the relationship separate from the accounts payable system, meaning the accounts payable system can be constrained to a clean and manageable list of only those with active accounts relationships. Furthermore, 360 offers buyers this benefit while still allowing them the opportunity to apply flexibility and/or rigidity in the procurement process to best meet the unique needs of their procurement team and its particular policies and practices.

For example, Central Highlands Regional Council (CHRC) and Defence Housing Australia (DHA) both use 360 requests and panels to reach out to as many providers as possible and protect their business-critical database. The two processes have the same fundamental goal, use the same tool, but they have very different processes

1.2.1 CASE STUDY: CENTRAL HIGHLANDS REGIONAL COUNCIL PROCESS

CHRC uses 360 for all requests for quote by applying the following process:

  1. New businesses register to be providers within 360
  2. Each provider submits a response to a pre-qualification request Unlike a regular request (e.g. for tender), with a pre-qualification request the responses can be assessed immediately (without waiting for the tender closing date)
  3. The evaluation team assesses the providers’ responses and:
    1. Allocates them to pre-qualified provider panels
    2. Records their location (for local supplier preferencing purposes)
  4. When a request for quote is required, project managers (not procurement officers) publish the request with restrictions to ensure they:
    1. Use a template request that includes the best-practice questionnaire configuration
    2. Sends invitations exclusively to pre-qualified panel members

It is only after a winner is selected from the submitted quotes that the accounts payable system needs to contain the winner’s account and the information in 360 will be the most up-to-date information available because the provider verified it themselves.

1.2.2 CASE STUDY: DEFENCE HOUSING AUSTRALIA’S PROCESS

DHA uses 360 to establish trade services panels for each geographic area in which they have houses by applying the following process:

  1. A series of region-specific requests for tender is published that ask providers to nominate the trades they offer in each geographic area
  2. Businesses register to be providers in 360 and choose which region-specific requests to respond to
  3. Providers respond by completing the questionnaire for each trade and each geographic area (taking advantage of the reuse response feature as appropriate)
  4. Providers nominate referees who receive an invitation to complete an online questionnaire
  5. 360 sends reminders to ensure referees and providers complete their questionnaires before the closing date
  6. Evaluation teams in each region assess responses and check the referee reports so they can score/rank each provider for each trade in each geographic area
  7. A bespoke report is generated in 360 so that the data supplied from the highest ranked providers can be uploaded into DHA’s internal systems (including Accounts Payable) and deeds can be written
  8. Each respondent is allocated into panels within 360 which are used to send decision notices (awarded, merit-listed, and not-awarded) to respondents

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