Automated vendor selection in the construction industry - Revision history

Designing Buildings: moved Automated vendor selection to Automated vendor selection in the construction industry

2021-02-12T07:54:20Z

moved Automated vendor selection to Automated vendor selection in the construction industry

← Older revision

Revision as of 07:54, 12 February 2021

Designing Buildings at 07:53, 12 February 2021

2021-02-12T07:53:51Z

← Older revision		Revision as of 07:53, 12 February 2021
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	* Supply chains in construction		* Supply chains in construction

−	[[Category:Client_procedures]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]	+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Client_procedures]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]

Editor at 16:16, 13 August 2020

2020-08-13T16:16:25Z

← Older revision		Revision as of 16:16, 13 August 2020
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	* E-procurement.		* E-procurement.
	* Facilities management		* Facilities management
		+	* Facility procurement standards.
	* Procurement route		* Procurement route
	* Procurement team for design and construction		* Procurement team for design and construction

Editor at 18:32, 27 July 2020

2020-07-27T18:32:01Z

← Older revision		Revision as of 18:32, 27 July 2020
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	* Request for proposals from consultants RFP.		* Request for proposals from consultants RFP.
	* RFx.		* RFx.
		+	* Source to pay software S2P.
	* Supply chains in construction		* Supply chains in construction

	[[Category:Client_procedures]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]		[[Category:Client_procedures]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]

Editor at 16:13, 29 June 2020

2020-06-29T16:13:37Z

← Older revision		Revision as of 16:13, 29 June 2020
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	* Procurement team for design and construction		* Procurement team for design and construction
	* Request for information RFI.		* Request for information RFI.
−	* Request for proposals from consultants RFP	+	* Request for proposals from consultants RFP.
		+	* RFx.
	* Supply chains in construction		* Supply chains in construction

	[[Category:Client_procedures]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]		[[Category:Client_procedures]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]

Designing Buildings at 06:49, 12 June 2020

2020-06-12T06:49:18Z

← Older revision		Revision as of 06:49, 12 June 2020
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	Procure to pay software starts with the purchase aspect of the procurement process and finishes with payments being issued to the vendor.		Procure to pay software starts with the purchase aspect of the procurement process and finishes with payments being issued to the vendor.

−	Procure to pay software is similar to source to pay software (or S2P software). However, source to pay software tends to deal with big data and digital networks to provide an integrated procurement evaluation strategy. Consequently, source to pay software may include tasks associated with automated vendor selection (while procure to pay software ~~often does~~ not).	+	Procure to pay software is similar to source to pay software (or S2P software). However, source to pay software tends to deal with big data and digital networks to provide an integrated procurement evaluation strategy. Consequently, source to pay software may include tasks associated with automated vendor selection, while procure to pay software may not.

	These software tools are designed to automate the entire procurement process all the way through to payment. They can be beneficial in organisations that seek to integrate purchasing departments and financial or accounts payable departments using a centralised software approach.		These software tools are designed to automate the entire procurement process all the way through to payment. They can be beneficial in organisations that seek to integrate purchasing departments and financial or accounts payable departments using a centralised software approach.
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	Procure to pay software typically covers the following processes:		Procure to pay software typically covers the following processes:

−	* The creation of RFPs.	+	* The creation of RFPs (Requests for Proposals).
	* The management of contracts.		* The management of contracts.
	* The production of timelines.		* The production of timelines.
Line 49:		Line 49:
	* The management of customer satisfaction surveys.		* The management of customer satisfaction surveys.

−	Procure to pay software ~~is meant to create~~ transparent transactions from start to finish~~. However, adoption of this procurement method has been deterred in some instances, particularly when staff are reluctant about accepting change that will require them to share knowledge and data~~.	+	Procure to pay software creates transparent transactions from start to finish.

	= Related articles on Designing Buildings Wiki =		= Related articles on Designing Buildings Wiki =

Designing Buildings at 06:47, 12 June 2020

2020-06-12T06:47:05Z

Editor at 18:00, 11 June 2020

2020-06-11T18:00:57Z

← Older revision		Revision as of 18:00, 11 June 2020
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	For purchasing professionals, achieving successful results through the “Iron Triangle” procurement approach was often a lengthy process. It might have meant using one vendor after another on different projects in an attempt to accomplish certain results. In the end, the customers may eventually discover that the results they wanted were not realistic.		For purchasing professionals, achieving successful results through the “Iron Triangle” procurement approach was often a lengthy process. It might have meant using one vendor after another on different projects in an attempt to accomplish certain results. In the end, the customers may eventually discover that the results they wanted were not realistic.

−	= ~~Automated vendor selection~~ =	+	= An alternative to the Iron Triangle =

	Automated vendor selection (AVS) is a different approach to procurement that American decision makers have been adopting as an alternative to the Iron Triangle. It uses technology to connect vendor sourcing and selection, and then also ties together project management and communications functions amongst team members to create a more cohesive process.		Automated vendor selection (AVS) is a different approach to procurement that American decision makers have been adopting as an alternative to the Iron Triangle. It uses technology to connect vendor sourcing and selection, and then also ties together project management and communications functions amongst team members to create a more cohesive process.

Editor: moved Procurement technology to Automated vendor selection

2020-06-11T18:00:04Z

moved Procurement technology to Automated vendor selection

← Older revision

Revision as of 18:00, 11 June 2020

Editor at 17:59, 11 June 2020

2020-06-11T17:59:31Z

← Older revision		Revision as of 17:59, 11 June 2020
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	* Collaborative practices.		* Collaborative practices.
		+	* Computers in construction tendering.
	* Construction contract.		* Construction contract.
	* Contractor.		* Contractor.

← Older revision		Revision as of 06:47, 12 June 2020
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	In the United States, facility managers and purchasing professionals have used a product and service procurement method based on a quality-timeliness-cost strategy. This “Iron Triangle” of procurement was based on three factors - high quality, prompt delivery and low cost.		In the United States, facility managers and purchasing professionals have used a product and service procurement method based on a quality-timeliness-cost strategy. This “Iron Triangle” of procurement was based on three factors - high quality, prompt delivery and low cost.

−	However, it was frequently difficult for vendors to execute all three parts of the triangle adequately. For instance, they have been able to deliver something good (quality) and ~~fast~~ (prompt delivery), but it may have come at a higher premium ~~- or the overall results may have been considered lower than an acceptable standard~~.	+	However, it was frequently difficult for vendors to execute all three parts of the triangle adequately. For instance, they have been able to deliver something of good (quality) and quickly (prompt delivery), but it may have come at a higher premium.

−	For purchasing professionals, achieving successful results through the “Iron Triangle” procurement approach was often a lengthy process. It might have meant using one vendor after another on different projects in an attempt to accomplish certain results. In the end, the customers may eventually ~~discover~~ that the results they wanted were not realistic.	+	For purchasing professionals, achieving successful results through the “Iron Triangle” procurement approach was often a lengthy process. It might have meant using one vendor after another on different projects in an attempt to accomplish certain results. In the end, the customers may have eventually discovered that the results they wanted were not realistic.

	= An alternative to the Iron Triangle =		= An alternative to the Iron Triangle =

−	Automated vendor selection (AVS) is a different approach to procurement that American decision makers have been adopting as an alternative to the Iron Triangle. It uses technology to connect vendor sourcing and selection, and ~~then also~~ ties together project management and communications functions amongst team members to create a more cohesive process.	+	Automated vendor selection (AVS) is a different approach to procurement that American decision makers have been adopting as an alternative to the Iron Triangle. It uses technology to connect vendor sourcing and selection, and ties together project management and communications functions amongst team members to create a more cohesive process.

−	At an early point of the procurement ~~stage~~, customers create a database of pre-defined criteria that can be fed into ~~the computer~~ software programme. In organisations where there are several people involved in procurement decision making, an automated vendor selection process ~~should~~ incorporate requirement criteria from everyone at the same time.	+	At an early point in the procurement process, customers create a database of pre-defined criteria that can be fed into a software programme. In organisations where there are several people involved in procurement decision making, an automated vendor selection process can incorporate requirement criteria from everyone at the same time.

−	~~Software~~ makes it possible to automate the vendor evaluation stage ~~which is a standard part of the Request for Information (RFI) process~~. ~~Through automated vendor selection, decision~~ makers ~~will~~ only be presented with potential candidates ~~that are~~ capable of fully delivering the service that has been requested ~~by the client~~.	+	The software makes it possible to automate the vendor evaluation stage. Decision makers are only presented with potential candidates capable of fully delivering the service that has been requested.

	An automated vendor selection approach allows decision makers to create equal comparisons between potential vendors - there are no ‘gut instincts’ or ‘special favourites’ or negative bias behind decision making practices. Technology can prioritise criteria based on tangible details, so if one factor is more important, it can be weighted accordingly and taken into consideration. For instance, if speed is the priority, then that will be part of how the algorithm evaluates the data.		An automated vendor selection approach allows decision makers to create equal comparisons between potential vendors - there are no ‘gut instincts’ or ‘special favourites’ or negative bias behind decision making practices. Technology can prioritise criteria based on tangible details, so if one factor is more important, it can be weighted accordingly and taken into consideration. For instance, if speed is the priority, then that will be part of how the algorithm evaluates the data.

−	Once the potential vendors have been identified (based on the results of the computer generated data), evaluations can use cloud-based technology (or other e-procurement methods) to provide members of the team with virtual assessment options~~. After the assessments are complete, the project will be able to move through the Request for Proposal (RFP) and Request for Quote (RFQ) phases.~~	+	Once the potential vendors have been identified (based on the results of the computer generated data), evaluations can use cloud-based technology (or other e-procurement methods) to provide members of the team with virtual assessment options.
−		+
−	~~For more information, see E-procurement~~.	+

	= Technology and procurement risk =		= Technology and procurement risk =

−	~~Part~~ of any vendor selection process ~~should be the determination of potential risk~~. Is there risk based on reputation? Is there financial risk? Is there a security risk? Software ~~tools~~ can help speed up these risk analyses, making ~~your business~~ safer and ~~your~~ vendor relationships smoother.	+	The determination of potential risk should be part of any vendor selection process. Is there risk based on reputation? Is there financial risk? Is there a security risk? Software can help speed up these risk analyses, making businesses safer and vendor relationships smoother. An automated procurement process should take into consideration due diligence regarding security and other potentially problematic issues. This can help to circumvent and even avoid potential risks.
−		+
−	An automated procurement process should take into consideration due diligence regarding security and other potentially problematic ~~factors~~. This can help to circumvent ~~issues~~ and even avoid potential risks ~~that might possibly occur at later stages of the project~~.	+

	= Vendor strategies =		= Vendor strategies =

−	From the perspective of vendors, ~~there are~~ three things ~~that~~ are predetermined through the automated vendor selection process:	+	From the perspective of vendors, three things are predetermined through the automated vendor selection process:

	# They will only be competing against other vendors that have matched the criteria in the client’s database.		# They will only be competing against other vendors that have matched the criteria in the client’s database.
	# The same level of quality and delivery expectations will be specified for all vendors.		# The same level of quality and delivery expectations will be specified for all vendors.
	# The most attractive price will be rewarded with the project (if all other factors are the same).		# The most attractive price will be rewarded with the project (if all other factors are the same).
−
−	Based on this knowledge, vendors should seek to minimise waste as much as possible when bidding for a project through the automated vendor selection process. This should result in a more efficient strategy.

	= Automated payment technology =		= Automated payment technology =