Managing a tender process for Applicant Tracking Systems

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1 Managing a tender process for Applicant Tracking Systems A White Paper on best practice By Mark Moore, MCIPS and Chris Keeling, CIPD, Jobtrain Ltd

2 Managing a tender process for Applicant Tracking Systems A White Paper on best practice By Mark Moore, MCIPS and Chris Keeling, CIPD, Jobtrain Ltd Applicant Tracking Systems (ATS) are becoming an increasingly important tool in the need to manage resourcing (that is recruitment) activity in a more cost effective, engaging and timely fashion for many corporate organisations. A good ATS will offer candidates a very positive experience of engagement with your company, will allow them to search for jobs, apply for jobs and manage their application and communication. For the client, it should allow you to easily publish jobs on your website, to manage applications through a series of filters, to communicate readily with candidates, to support internal processes (job authorisation, contract issuing etc) and, importantly, will provide detailed management information in the form of reporting. Undoubtedly we have seen, and continue to see, a big take up of standardised procurement processes within the private sector and this has traditionally been standard practice in the public sector. According to a survey conducted by the Chartered Institute of Purchasing and Supply, 62% of all purchasers now use a tendering process to select their suppliers. Certainly, the EU Procurement Regulations (that apply to public sector bodies) have driven tendering processes to adopt prequalification criteria through the use of questionnaires and to balance award criteria in terms of scoring pricing and quality. The government's Office of Government Commerce (OGC), now replaced by the Efficiency and Reform Group, also did a great deal to publish policies to encourage public sector organisations to publicise opportunities more widely, to adopt E-tendering processes and to encourage more detailed processes generally. Many private sector organisations have mirrored these developments and see tendering as a method to manage costs in this tough economic climate. And herein lays one of the difficulties at the outset. With a combination of forces seeking to drive change, there is a distinct danger that companies and their Procurement teams fail to adopt the correct strategy to purchasing an ATS as they are pressurised into using the wrong tools. This can simply lead to the wrong outcomes. A one size fits all approach is often adopted by corporate purchasing teams and so the standardisation of processes often leads to costly and time consuming tenders that have to be created as well as often the wrong solution chosen. So in this paper, what we need to explore is how to manage the procurement process in a successful, collaborative fashion in a way that adopts best practice and complies with the necessary regulations. It sounds like an oxymoron already doesn t it? Collaborative procurement with regulation compliance together? Surely not? However, this is perfectly possible so to shed light on this area: 1. Purchasers operating within the public sector must comply with the EU Procurement regulations. These are very strict on compliance and non-conformance to these can lead to termination of contracts and legal claims for losses. However, this threat of nonconformance has stymied the thinking and behaviour of too many procurement individuals

3 in the sector. Instead of applying a good degree of common sense to a process they have adopted strict frameworks that ultimately can be counter-productive. To emphasise this we will turn to point The OGC was highly critical of procurement tendering that was too process driven with purchasers paying insufficient attention to suppliers. Instead they wanted to see a more open market style particularly in the creation of specifications and contracts and for the development of PQQs (pre-qualification questionnaire). Iit was keen to encourage organisations to engage with potential suppliers through 'market dialogue'. The process needs to be managed so that bias would not be shown to any particular suppliers but purchasers were certainly encouraged to learn as much as possible about solutions from suppliers as well as to inform the market of their needs. 3. Under EU Procurement Regulations, organisations are allowed to consider what are called variant bids. These should be used wherever possible as it simply allows the organisation to publish a tender but with the caveat of how would you do it differently? This is crucial for unless you have a deep and detailed understanding of all the players in a market place, and all the technology innovations that may have been created- or are about to be launched, then you really run the risk of buying from a point of ignorance. By having the variant bid you allow yourself the opportunity to learn from the providers simply set out what you feel you need in terms of outcomes and allow the market to help shape the detail in terms of how those aspirations can be achieved. 4. The next point to flag is one that is critical to addressing whether you are using the right strategy in choosing an ATS. For this we are going to look at a much valued model that was developed by Peter Kraljic. Bear with me whilst we show this and talk it through as this really does add value to this debate: Supply Risk Bottleneck Strategic Routine /Non-critical Leverage Impact on profit

4 So, in this model you need to decide, right at the outset, where you believe on the scale of Impact on Profit vs Supply Risk the purchase of an ATS would sit. To help determine this, we would point you in the direction of some more defined descriptions of the various quadrants: Bottleneck items are those that are of significant value to the operation of the business and where there lies a distinct risk if the supply is interrupted, lost or withdrawn. This risk is not necessarily going to affect the core trading activities of the company, but it may cause disruption to some of its daily running. With it being low down on the Profit Impact scale, it is likely that these items are not costly in terms of the percentage of purchasing budget it is important to note that the horizontal scale looks at the aggregate spend on the category of purchase and not at the level of saving that it may introduce. When looking at an ATS therefore, it is this quadrant that may well fit many organisations. Strategic Similar to the bottleneck items, these will be critical to the business, but probably closer to the core activity of the company. In addition, the relative cost (as a percentage of the overall budget) would be high and as such any decisions over purchase can be shaped at Board level such would be the impact. Routine typically, these are non-critical, low cost items (stationery is a familiar example). If purchasing these items you would expect companies to look to automate these inexpensive items through E- catalogue purchasing systems or through Corporate Purchasing Cards for example.. Leverage essentially high cost, low risk items. Cost down approaches is key to controlling and managing suppliers in this scenario. This is the main scenario that is suitable to tendering. It may well be that some organisations may view an ATS in this category but if this is the case, then you would be well advised to consider what the impact would be on the company if recruitment activity were to be disrupted? What candidate pool (your Intellectual Property) would you risk losing and how easy do you believe it would be to introduce a new piece of software at relatively short-notice? Whilst it is feasible to put an argument together to see an ATS as a leverage item, it is more than likely that it sits better as a Bottleneck issue and as such the relevant strategy should be adopted. Avoiding frustrations I have spent time talking to suppliers of Applicant Tracking Systems and whilst there is widespread acceptance and acknowledgement of the value of a tendering process, there are certain issues that really cause frustration amongst suppliers. To avoid these (and alienating suppliers at the outset), it really is a case of adopting some common sense and some best practice. So here are a list of common problems that are encountered: 1. The tender structure is too rigid. This will not allow the provider to offer advice on either the best approach or the products or services available. Remember to use variant bids if necessary! 2. Pricing schedules the one size fits all approach can force suppliers to quote in a way that doesn t sit with their own pricing structure. This can then lead to confusing entries and difficult to interpret best cost propositions. Leaving some flexibility to explain how a cost is structured, but looking for definitive costs over a fixed period (one to three years is typical) will offer the best of both worlds in most scenarios.

5 3. Tender layouts that are geared towards figures and not towards capturing examples of the end clients work is a common complaint. Excel spreadsheets have their place, but they are hopelessly unfriendly for suppliers who are required to provide images, tables and diagrams as well as screen shots of their products to show what they can deliver. Stick to Word documents if possible! 4. Tender portals can be difficult to navigate, unreliable and an insistence on all communication going via the portal creates an unhelpful barrier between purchaser and the market. The benefits of portals can be good (if well managed), but don t be afraid to keep an open dialogue with suppliers as it will help you make a more informed choice. 5. Inappropriate questions in the tender remember what you are buying (in this instance an ATS a software service) it is not a commodity, nor is it a piece of equipment and certainly not a leverage item as we saw above. I have seen some awful examples of questions that are asked of suppliers relating to their waste disposal policies; their building regs compliance and, in one instance, their authority to handle nuclear waste! Make sure the questions are all relevant and inform you as the purchaser. If they don t then it simply reflects badly on you, the function and the company. 6. Finally if you are using a scoring matrix (which are useful tools), then make sure the weighting is appropriate (not too much focus on price and not too much on peripheral items to the solution; e.g. the provider s recycling policy, or their health and safety policy). These really are minor items in the context of this type of purchase. Conclusions Overall the learning on how to purchase an e-recruitment solution, or an ATS, can be summarised in three short statements: 1. Engage with your market to inform you before starting the formal process 2. Use an appropriate purchasing strategy that allows discussions with suppliers 3. Make sure the tender itself asks relevant questions and scores those areas that are important to the end solution. About the authors: Mark is a leading member of the Chartered Institute of Purchasing and Supply and specialises in training and development in procurement and supply chain management. He is well known as a highly effective presenter with the ability to motivate those influenced by procurement issues and has 15 years of experience working as a consultant leading development programmes for private and public sector corporate clients. Mark was commissioned by CIPS to rewrite the CIPS qualifications from levels 2-6 in their review of qualifications published this year, and has also recently written the global occupational standards for supply chain management. Chris is a qualified member of the Chartered Institute of Personnel and Development and spent the first 12 years of his career within industry working with Land Rover, the NHS and the Boddington Group. He founded Jobtrain in 1999 and continues to lead this UK based business that has now become established as one of the leading suppliers of Applicant Tracking Systems.

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