Savings. Budgets. 

Words used as weapons or shields depending on the circumstances. 

We all want to be more efficient, don’t we? No one has actually signed up to waste hours on repetitive tasks. No one dreamed as a four-year-old that they would one day be chasing an elusive email down the rabbit hole of an inbox.

email tendering process procurementAnd yet, that’s what a lot of today’s tender processes end up looking like.

Let’s face it, it’s not just about losing important emails. The tender process can be a frustratingly stop-start business. As soon as Dave vanishes for a holiday, the whole tender process must pause because he’s the one sorting it, he’s the one who knows the ins and outs of what’s happened. Sure, you were copied into one of the chain messages, but not the one that’s crucial right now

And let’s not even mention “auditing”.

Except we shall.

The word “audit” is one charged with fear, the he-who-shall-not-be-named of procurement.

audit auditing tendering Does it have to always be like this? Bids dragged along for month after torturous month, important documents misled, your company just one click away from a data breach or a massive GDPR fine?

And in the midst of all this, there is undoubtedly Software with a capital S. Software to be ignored, or used only when absolutely necessary, preferably accompanied by the one colleague in your team who sort-of understands it. That is, if you’ve even asked for help. You have a 500-page manual to accompany it and you went to the induction meeting 3 months ago but you don’t remember a thing because you’ve not needed it since.

help supply chain procurementIt’s pretty embarrassing to have to ask for help to achieve a process you could do ever so easily over the phone or via email and so, you slip. You move the process away from secure platforms to emails, to Whatsapp, to print outs, to USB sticks. These you can understand without asking the new intern to hold your hand.

Where is the fun in all this? Yes, fun. Because in spite of the seriousness of what you do, something beyond a paycheck attracted you to this field. It’s just that everything else is doing its best to dim that initial spark. It’s still there, but barely.

Is there another way? Of course, there is, but it will take courage and action from you to make that change.

Procurement software that pays for itself 

Let’s imagine then, that there is a solution out there that answers all of your tendering problems. What if your email let you see a tender’s entire history at the click of a button, and not just the emails sent to you? Enter DeepStream.

DeepStream is everything you need:

  • User-friendly. You no longer need someone to hold your hand to conduct a tender process (though our customer success team is of course always nearby).
  • Robust and sophisticated. DeepStream is built to handle the most complex tendering processes. 
  • Visibility at every stage. Traditional e-procurement systems do not track all the communication flow between buyers and suppliers in the tendering process, leading to compliance risks. At DeepStream, we like to do things differently… 
  • Your audit trail can be downloaded at a click of a button. 
  •  An end to tribal knowledge. Procurement doesn’t have to end when a teammate is sick or away. DeepStream favours knowledge sharing and remote teams.
  • Consistent business processes are adopted

Let’s face it, the old way of handling tender processes, whether emails or prescriptive software leads to high costs, whether those lie in admin, legal or resources.

Let’s face it, the old way, whether emails or prescriptive software leads to high costs, whether those lie in admin, legal or resources. Click To Tweet

Quantified Savings of using DeepStream

That’s all well and good enough, but what concrete savings would you be expected to make using DeepStream?

Below we’ve outlined some of the most common cost risks encountered by companies using manual processes, but first, let’s start with the big picture:

  • Using DeepStream could lead to a 30-50% decrease in operational costs and time*
  • Analysis conducted by McKinsey & Co for DeepStream puts long term annual savings from moving to manual to digital tendering at 3-5% per annum. 
  • At 1% p.a. with a spend of $500m = savings of $5m p.a.
Deepstream operational costs pricing*source: DeepStream Client Analysis (UK North Sea Independent OilCo Buyer) & McKinsey & Company analysis for DeepStream.

Furthermore, here is how using a compliant, transparent and auditable tendering platform could save you further costs.

Legal & Compliance risk

Here are some of the main risks of using a manual tender process (such as email):

  • Manual, inconsistent processes makes it difficult to defend even baseless claims
  • High cost of auditing records (often not possible and no real-time oversight)
  • Problem is particularly acute and prevalent when using intermediaries as agents
  • Inability to demonstrate auditable controlled tendering process can lead to no defence against UK Bribery Act and/ or US FCPA. See our compliance risk whitepaper here.

Quantified Savings Estimate

Here’s what you’ll save by using an auditable and compliant platform like DeepStream:

Legal costs: Audit, Legal Defence

  • External legal, 9 months at $5k / day
  • Total Estimate = $750k per event

(Or) Cost of Settlement

  • 33-50% legal total cost = $250-375k
  • Settle 25% of $5m contract = $1.25m
  • Total = $1.5-1.6m per event

Sounds good so far? Let’s continue…

What if your email let you see a tender’s entire history at the click of a button, and not just the emails sent to you? Enter DeepStream. Click To Tweet

Data Compliance Risk

Outside of legal and compliance risks, there are also some specific data risks associated with manual tender processes, such as:

  • Risk from unintentional confidentiality breach (high risk when sent to Supplier email addresses)
  • Accidental breach resulting from use of insecure email for exchanging sensitive docs
  • GDPR risks of emails not being GDPR compliant
  • Compliance issues

Quantified Savings Estimate

Here is what you could save by switching to DeepStream for your tender process.

Legal costs: Audit, Legal Defence

  • External legal, 3 months at $5k / day
  • Total = $250k per event

GDPR fines

  • Total = <4% of revenues per event*

Reputational Damage

  • Variable $m, % market cap
*source: https://gdpr.eu/fines/

Intermediary Bid Inflation Risk

There are also further issues with using a manual tender process, such as:

  • No visibility of tendering process by brokers 
  • Risk of price inflation (either directly or indirectly via price collusion) 
  • Based on trust with no data 
  • No control over process of real time bid receipt and synthesis (reliant on “final” bids received)

Quantified Savings Estimate

Probability adjusted expected cost

  • 5% prob. of price inflation event
  • 15% avg. inflation if it occurs
  • Based on $25mm p.a. spend
  • Total = $185k p.a.

So if you want to inject some fun back into procurement, work like a team again and save your company some money – check out DeepStream.