Methods of industry engagement
- There are 6 methods for industry engagement.
- The method you choose depends on your objectives and when you conduct it.
- Starting an industry engagement after you’ve already begun procurement activity increases risks and should influence your choice.
- If you're new to the industry, learn how to plan your procurement.
Know the 6 industry engagement methods
There are 6 main types or methods of industry engagement. The one you choose will depend on your circumstances and needs.
Click on each heading below to learn more, or select Expand all.
Horizon scanning involves analysing a market’s near-term potential opportunities, developments, threats, and driving forces.
Benefits of horizon scanning
Horizon scanning helps you understand how a market operates within its broader economic context. You can then prepare an informed strategy for approaching the market, and you can respond to market conditions and tailor your future procurement activities. You'll be able to weather potential changes and take advantage of new opportunities.
The broad nature of horizon scanning means you may discover issues you otherwise wouldn’t have known about. It can also encourage a procurement team out of its “bubble” to consider procurement activities more broadly.
How to engage in horizon scanning
Horizon scanning involves:
- strategically discussing future market conditions with suppliers
- examining wider issues, such as global and domestic political agendas.
Market sounding involves floating an idea with the market to get feedback before formally approaching suppliers with a request for tender or quote.
Benefits of market sounding
Market sounding can help develop a more achievable and specific statement of requirements. That’s because you can incorporate industry feedback on:
- the feasibility of the procurement activity
- the market’s capability to achieve what you need
- whether a competitive market exists.
How to engage in market sounding
There’s no universal method of market sounding but you should always follow a few basic rules:
- don’t be too prescriptive, you’ll reduce innovation
- focus on suppliers as a group, not as individuals, so you can encourage them to participate and focus their attention on a procurement activity’s viability rather than on their specific solutions.
- define your goals upfront.
Being clear helps suppliers provide solutions that are more timely and relevant to your needs.
On occasion, suppliers will have little or no incentive to respond to a formal procurement approach. There might be several reasons for this, including a lack of clarity around your needs, or uncertainty about the likely solution.
When this happens, you might need to create the market yourself.
Market creation can work well where:
- the market is too small or large
- the geographical scope is broad or remote
- the risks may be extreme
- suppliers don't initially see the engagement as financially viable.
In market creation, your focus should be on promoting the concept of selling to government so that you generate interest before publishing a formal request for tender or quote.
A bidder conference lets suppliers respond to a tender, in order to participate in discussions about a procurement’s commercial and technical aspects and risks.
You can only hold a bidder conference after formal procurement has started.
To encourage suppliers to participate, release a set of prescribed topics you’ll discuss before the conference begins.
This involves publishing a proposed procurement well before you engage in it formally. That way, suppliers can register their interest and provide feedback.
An indicative approach to market can help you understand the level of supplier interest. It can also help you amend and refine the procurement specifications before releasing them.
Concept viability involves using suppliers’ knowledge to test a proposed procurement’s technical viability. You can ask suppliers to respond to your specific need with solutions you've already developed. Or, you can ask them to come up with their own.
This can be an effective way of engaging with industry when you want to implement a new business idea. That’s because it gives active market participants the opportunity to road-test different solutions.
Using a concept viability approach can help make sure your approach to market will be based on a concept to which suppliers can respond.
Choose your industry engagement method
Choose an industry engagement method based on your goals and on the eventual procurement activity. No single method will always deliver the best outcome.
The International Association for Public Participation (IAP2) Spectrum can help you make your selection. It recommends different approaches based on goals, timeframes, resources and levels of concern about the decision being made.
The spectrum also defines the promise being made to the public (in this case, the potential suppliers) through each method of industry engagement.
There are 5 purposes (or levels) for industry engagement, and you can use any method that suits your purpose. You can also use more than one method for a single industry engagement.
| Conditions | Industry engagement goal | Engagement approach |
|---|---|---|
Well-understood business needs with stable, mature supply market | To expand the range of suppliers for the same or similar products or services | To inform the market about the anticipated solution |
Well-understood business needs, changing market offerings | To identify pros and cons of new and emerging products or services | To consult with the market about the anticipated solution |
Changing business needs, expanding market range | To assess market responses to emerging business needs alongside existing suppliers | To involve the market in fine-tuning the anticipated solution |
Changing business needs with goods and services to come from new market | To recast supply chains through a broad range of suppliers | To collaborate with the market |
Changing business needs with unknown delivery options | To deliver the anticipated solution | To empower the market to deliver a new business solution |
Get the most out of your method
To get the most from the industry engagement process, make sure you allocate enough time to:
- discuss and consider proposed solutions
- analyse alternatives and innovative solutions
- revise specifications, where needed.
Know how industry engagement fits with the procurement lifecycle
You may find yourself needing to run an industry engagement during an active procurement.
When this happens, the information you’ve received from the procurement planning process should help you decide on an industry engagement method.
Both the type of industry engagement and its timing are critical for making sure the industry participates effectively and that you're able to properly manage probity risks.
Note that probity risks increase exponentially as the procurement process develops. Generally, this means you can be more flexible and informal with your industry engagement earlier in the procurement lifecycle.
We have training available to help plan your procurement.
Understand industry engagement at different stages of the lifecycle
There are 2 distinct stages in the procurement lifecycle, which highlight how industry engagement can change.
The first pass is less formal
This is when you receive funding approval to explore potential procurement options.
Until this point, industry engagement is actively encouraged and you can be relatively informal. Your focus should be on collaborating with industry to brainstorm ideas.
You might, for instance, choose to attend trade shows and conduct one-on-one discussions with suppliers.
The second pass requires deeper analysis
Later in the procurement lifecycle, you'll need to analyse suppliers’ proposals more deeply. You'll need to structure your industry engagement with reference to the 6 principles to ensure probity and fairness.
Between the passes, be structured and formal
Between the first and second passes, you should refine and tighten tender specifications.
Any industry engagement you run will be (or will appear to be) more vulnerable to supplier influence. To counter this, make sure your approach is more structured and formal. Keep good records, be mindful of probity and behaviour, and respect supplier intellectual property, as per the 6 principles of industry engagement.
Typical industry engagement between the first and second passes includes requests for information (RFIs) and requests for quotes (RFQs).
You aren't obliged to invite the suppliers who were involved in your industry engagement to apply for the RFI or RFQ. Similarly, you aren't limited to the suppliers who were initially involved in the industry engagement. You can invite other industry members to participate in the formal procurement process.
You can also use any results and insights you gain from the industry engagement process in the final procurement activity, including in the procurement requirements.
However, there are some limitations. For instance, you will be subject to any confidentiality agreements you’ve entered. You must also make sure you protect suppliers’ intellectual property rights.
Next steps: plan your industry engagement
Once you've chosen your method, you're ready to plan your industry engagement.