Winning Public
Sector Business - a rough guide
3. Why bother with the
public sector market?
So if it’s so hard
to break into the public sector market, why bother?
3.1 Because the public sector represents over half of the country’s
business-to-business trade
In fact in some of the
more deprived or isolated parts of the country, public sector purchasing
is by far the most important economic activity – and in these
areas the local supplier is likely to be more valued and better
able to play a part in providing goods and services to the council,
police, NHS schools etc.
3.2 Because the public
sector pays reliably
Although working for the
public sector often means charging less than a commercial customer
would pay, you can rely on the organisation to pay its bills. And
the perception that public sector organisations are inefficient
and pay late is becoming a thing of the past as systems improve
and 30-day payment terms are adhered to reasonably well. The increasing
use of e-Invoicing and BACS can mean payment can be even quicker
than this if appropriate.
3.3 Because once you
are an established supplier, you have a good chance of continued
business
If you can afford to
invest the time and effort in this sector, it can pay off. Many
suppliers who have managed to establish themselves in this market
have managed to maintain and grow their business. It requires good
account management, innovation and continuous improvement, all of
which stem from being close to the customer and helping them address
their issues and constraints.
Public sector buyers are
rarely professionally trained – procurement has been devolved in
most public sector organisations and, until recently, many organisations
did not even boast a procurement manager. Even in the larger organisations,
procurement managers were rarely qualified and did not have a place
on the board. So in the past, skilled sales and marketing managers
could find good opportunities to win and grow their business with
low priced often low quality goods and services.
This is now changing and
it is likely that you will now increasingly be dealing with a professionally
trained Procurement Manager for the larger contracts, but for lower
value work, it is still the local contracts manager in the buying
department with whom you will need to build the longer-term relationship.
The ‘cheapest wins' approach
is beginning to be replaced by a more sophisticated ‘best value'
set of decision-making considerations – see 4.3 for more on this
- but you will still win more business in the public sector, as
everywhere, if you can find ways to provide your goods and services
at prices lower than your competition.
3.4 Because it should
be getting easier to negotiate the hurdles
The modernisation of public
sector procurement may bring a reduction in the number of suppliers
and a more competitive market; it may also bring a more demanding
regime for compliance to requirements; but it should also bring
some benefits to supplier: greater use of the web will mean easier
access to information and more streamlined paper-free processes
for suppliers as well as purchasers.
There are already signs of
standardisation between organisations, including pre-qualification
and tendering procedures. Regional collaboration will mean that
smaller organisations such as District Councils will become part
of larger buying consortia and therefore more attractive prospects
for suppliers. And the public sector is being allowed to pursue
innovative partnership arrangements with private sector companies
to address areas such as housing stock management, opening up new
opportunities for suppliers.
Recent government guidelines
have also improved the lot of smaller suppliers, including the requirement
on prime contractors to pay sub-contractors promptly and the requirement
on every public sector organisation to publish a “Selling to us”
section on their website to guide potential suppliers through their
organisation and rules.
So how do
you go about winning public sector business? Read on…
For information or
help in breaking into this sector or improving your market share,
contact us for a free initial consultation.
To download this
guide click here
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