Getting market buy-in for digital procurement

Traditional procurement focuses on tendering: procurement people get involved once the commissioning people have written and signed off the specification. For modern digital delivery, this approach slows things down. It rarely helps get the service delivered on time and to the required standard, let alone on budget. It provides few opportunities for buying organisation to learn and get better at buying.

It is important that both delivery and procurement people understand the supply markets they are buying from. Understanding goes beyond the basics:

  • Are there any new start-up suppliers on the horizon?
  • Is there a new product or service (or even market) that could promote or disrupt your rollout?
  • What new contracting styles could be used (e.g. contracting by sprint-by-sprint)?

If you will need suppliers to help build your new digital service, you need buy-in from them, the earlier in the process the better. Here are a few ideas to help make that happen.

Engage with potential suppliers like they’re human beings

Most tender documents aren’t shared before the procurement officially starts. In most cases, they are only available via a ‘tendering portal’ (which typically requires suppliers to set up an account and sign in). This puts people off. It’s not very transparent. It doesn’t aid delivery, it slows things down.

There’s a better way: hold back the tender start date, and use the time to speak with interested parties about the outcome you are working towards.

Fair competition should be open, so why not use all possible means of communication. It might be a new idea for your procurement function, but it is ok to broadcast draft versions of your procurement documents in advance, in public. You could put them online as blog posts and ask for feedback.

Don’t make things complicated. A simple blog post can provide a short overview of the common documents, such as:

  • Desired outcome: what is the user need, what is the service design?
  • Supplier products and services: what essential skills and experiences are you looking for in suppliers; what cultures are important to you and how many suppliers you will need?
  • Current phase: what is being supplied at present and what is next, and when does this procurement fit in to the build?
  • Contractual and payment terms: is there any likelihood of any special or novel terms suppliers should be made of?
  • Procurement process: when will the procurement roughly open and close, where the final documents will be found and how they can be involved in the next stage?

At this stage, you just need to provide enough information to allow interested parties to decide if this procurement will be of interest to them. They may wish to contribute to further thinking on design iterations, so make sure you include a contact point so people can register their interest for the next stage.

Tip: Timestamp everything, and make sure it’s all clearly flagged as ‘draft’. Do redact any commercially sensitive information.

Listen to potential suppliers’ feedback

Wait a couple of weeks after your initial engagement, then consider running a workshop where interested parties can freely discuss the documents you shared. This is about asking the market for advice, and enabling suppliers to develop ideas or services that might meet the user need.

Make it collaborative. Remember you are asking suppliers to give up their time for free, so make it worth their while by listening to everything they have to say.

Go one step further and broadcast the event – streaming services, combined with open question-and-answer formats, make this simple to do.

After the event, publish a blog post about what happened. Tell people about what was said at the event as this will improve your transparent reporting. More importantly, spell out what will happen next.

Tip: Expect a lot of people at this type of event. Some will be genuine. Some will try and poach ideas. Some will be journalists. Protect yourself.

Pay attention to the specifics

Follow the workshop with an offer to have one-to-one discussions with suppliers. This isn’t about running a closed procurement; it’s about giving that supplier the opportunity to express their views. Quite often, you’ll end up with deeper knowledge of the service you are trying to build, and of what the potential suppliers are thinking about it.

For example, I’ve heard suppliers say things like:

  • “That your service won’t work if it’s designed like that.”
  • “Your commercial model doesn’t reflect the market.”
  • “Have you thought about speaking to a different user group?”

Tip: Ask your procurement function to lead this type of meeting to ensure fairness. You can still be open about the suppliers you’ve spoken with, and you can still publish an overview of the output; but of course, do leave out any commercially sensitive information.

Iterate, and say why you’re iterating

Take onboard all comments from suppliers, and iterate the documents based on what you have heard. If that means iterating many documents, don’t wait until they are all ready – share them as and when they’re ready. (Remember to label drafts as drafts.)

Blog again and ensure you tell the engagement story. Say who you’ve spoken with, say what feedback you’ve had, say how it has helped you to iterate the procurement as a whole. Be open about being open.

Tip: State clearly when the procurement will officially start, and how bidders can submit a bid.

Being open makes things better

All of this pre-tender market engagement will have put you in a stronger position. You’ll know more about what potential suppliers are expecting, about the timings, the risks and how ready the market is to actually deliver.

Most of all, being open speeds things up. It means you deliver on your commitment to report on your work, and makes the whole process quicker because there’s less confusion and fewer misunderstandings. Everyone has a clearer picture of where they stand, earlier on in the process. You get better bids, from more genuine suppliers.

You are now ready to open the tender. When your procurement officially opens, say it’s open but refrain from any further conversations with suppliers. Ensure you follow your organisations procurement process to answering questions during this period.

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