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Transcript of 0 NASCIO Procurement Modernization Initiative Best Practices Considerations and Approaches 10828...
1
NASCIO
Procurement Modernization Initiative
Best Practices Considerations and Approaches
10828
Dennis J. Gallitano
May 8, 2013
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Topics
• Traditional Procurement Processes and Strategic Selling
• Procurement Best Practices
• Implementation Planning Studies (IPS)
• Discussion and Q & A
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Traditional Procurement Processes Typically Involve:
RFP developed with business and technology requirements along with limited terms and conditions that are generic and not specifically tailored to the technology being purchased
Proposals delivered, initial screening Evaluations and scoring of business/technical requirements Interview and demonstrations Vendor of choice (VOC) announced Contract negotiations
If the VOC is selected prior to contract negotiations, significant negotiation leverage
has already been lost
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Strategic Selling – Common Tactics
Identify the “Coach” as early as possible to create information pipeline and navigate to buyer influencers
“Over-sell” the capabilities of the solution Push to down-select to vendor of choice at earliest possible
time Promote and “commit” with un-empowered sales
representatives to survive the down-select process, then bring in the business drivers to unhook prior commitments
Negotiate when the vendor is picked and their leverage is the greatest
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Traditional Procurement Approaches Can Result In:
Loss of negotiation leverage
“Omissions” vs. “Commissions” – when using the vendor form of contract
“Information Asymmetry”* - Buyer is at an inherent disadvantage
*Steven D. Levitt, Freakonomics
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Reverse Engineer Strategic Selling Tactics
Use structured, multi-staged procurement process
Require commitments to key business and contract terms early on in the process
Require scripted and structured demos in a controlled environment that are recorded to preserve the representations made about meeting functionality requirements
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Reverse Engineer Strategic Selling Tactics
Require empowered negotiators upfront in the process
Require detailed project planning to get access to vendor’s implementation personnel responsible for implementing the solution
Use State-developed contracts and project documents specifically tailored toward the IT purchase
Maintain control over the processing of all contract and project document revisions
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Minimum & Mission Critical
Requirements ReviewInterviews
Key Business Terms
Product Demonstrations
Implementation Planning Study (IPS) WorkshopsProject Document Negotiations
Level of Detail& Commitment
Stage 1
Stage 2
Stage 3
Stage 4
Structured ProcurementProcess
Contract Negotiations
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The State will deliver to the vendor the form of contract and project documents
RFP specifies the vendors are not to provide their form contracts. If submitted, the State will not review.
Method of negotiations involve face-to-face, or, at the option of the State, by telephone
No “negotiation by emails” or via exchanging redlines Redlines from vendor will not be reviewed The State maintains the master and version control
Specific Negotiation Rules and Procedures – to be included in the RFP
Bidders required to certify compliance with the Negotiation Rules and Procedures as part of the RFP
submission as a Minimum (Mandatory) Requirement – No certification results in disqualification
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Traditional Approach Has Problems
Precious leverage can be lost to negotiate key project commitments
Contracted “fixed fees” are subject to price increases due to overlooked, buried assumptions in the vendor’s proposal
Vendor fails to develop a project plan, statement of work and project charter that reflects project’s unique needs
Without firm project dates, real potential for slippage, in some cases, significant
Vendor unlikely to entertain any significant contract changes to close these gaps
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Reverse Engineer the Problem
Require full project planning during the procurement process, not after
Develop key project documents, including a fully documented Statement of Work, Project Plan, Joint Resource Plan, Project Management Plan, Project Charter and Quality Assurance Plan
Do NOT settle for samples or vendor-generated templates – Use your own forms and drive the process
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Developing the Project Schedules
Contract to include, as part of signing process (and not after):• Detailed Statement of Work• Joint Resource Plan• Detailed Project Plan• Project Management Plan• Project Charter• Quality Assurance Plan
Vendor’s project management team, including the vendor’s project manager and her/his functional and technical leads to be part of all IPS sessions
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Representative Detail for the Statement of WorkMust be comprehensive and detailed
Identify Vendor or the State as the “Accountable/Responsible” party for each major activity
Identify Critical Milestones and major deliverables
Specify due dates and consequences for vendor delays and missing critical due dates
Each major deliverable to have Certification Criteria
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Statement of Work
Detailed certification process for submitting design documents, test materials and other deliverables
Detailed solution testing and certification process Detailed knowledge transfer provisions Comprehensive project management approach:
• Project Status Reporting• Project Management• Risk Management• Issue Management• Financial Management• Communications Management• Quality Management