The key challenge that most in-house digital teams face at one point on another, is how to efficiently procure and manage IT product development with an outsourced partner. While Thorgate’s portfolio mostly consists of successful development projects delivered in collaboration with private enterprises, we have recently set our eyes on the public sector to help public entities bypass costly pitfalls. We have analysed nearly a dozen tender documents in the UK, Norway, and Estonia. To conclude the hundreds of hours of research, we are excited to put forward our list of best practices for IT procurement in the public sector.
Do not overthink it
The main risk that a tender document with overly detailed requirements poses is the lack of flexibility. Here the build-measure-learning loop is ignored, and all the functionalities, data flows, and sometimes even user flows are pre-written. By setting strict requirements, the project team is likely to rewrite the scope multiple times throughout the key phases of development.
The key here is to be open to innovation. There are numerous tenders where the technology stack is pre-written, for instance where Java is specifically required due to in-house familiarity. This has been the root cause of projects where chosen technology restricts efficient delivery of product by poorly impacting both product quality and ROI deliverables. The main danger of over planning is incurring costs of a product that may be later deemed irrelevant.
Keep a clear focus
On the other hand, a project scope that is very broad will most likely result in an equally speculative quote to match the vague sourcing requirements. Once the actual project budget is revealed down the line, you are either running the risk of launching a low-quality product as a result of underfunding or end up overpaying for the service.
Break your tender into stages
This might be a project management no-brainer, but when scoping for an integrated IT solution, it is extremely useful to follow the agile method. At Thorgate Digital, we approach each project in three stages:
- Product analysis - product development team, client representatives and product users engage in a workshop in order to put together the initial product scope (MVP)
- Product design - the theoretical scope informs the UI. The UI is then tested, improved and send into development.
- Product development - having the UI in place, your digital development partner will be able to provide a clearer estimate of the costs involved in the product development stage.
By breaking the tender down to framework contracts, you can work with a handful of potential vendors and build out the product in stages. Use building blocks but agree on integration standards (for example Enterprise Service Bus). Create flexible integrated services, where each block is a separate autonomous service. A service-oriented architecture gives you the flexibility and freedom to create new building blocks that seamlessly integrate into the system at later stages of development.
Work with IT developers directly
As a client, you have better control over your scope by dealing directly with the developers rather than sourcing a middle man. Essentially the more project managers that are involved, the higher the risk of running into miscommunication and delays.
Embrace that not all developers come with degrees
While there are fantastic degree programmes available for IT programmers and project managers, IT technological advances are industry and not academia-driven. With the speed of technological change, hands-on experience of the latest technologies is more viable than an academic background. By requiring the project team to have MSc degrees, public clients put themselves in danger of limiting their access to valuable human resources. Instead, we recommend that you identify the best players by seeking client referrals when requesting for proposals from development companies.
Pay per deliverable not per hour
When ordering a product, pay for a product. Hourly estimates can make it difficult to assess the actual price of the product in the long run. By researching the market, you can make an estimate of the realistic price of the product and hence procure based on a fixed price.
How can we help you to do better
We are driven by the idea that taxpayers’ money should be spent wisely. Whether you are preparing your first tender or simply looking to change the approach to sourcing your next development partner, we are happy to offer our advice on streamlining the procurement process and adopting the Agile Method.