Selecting an outsourcing partner? Why not try to host the World Cup whilst you’re at it?
Being a passionate football fan, I was very interested to learn about the bidding process for hosting the 2018 FIFA World Cup, especially as England was in the running. Sadly England did not win the bid, however all is not yet lost. With the recent allegations against Qatar, the 2022 bidding process could be about to start all over again.
As a sourcing consultant, as well as someone that has previously held the highest level of coaching award in the FA, it has now dawned on me how very similar the FIFA’s bidding process is to organisations looking for their perfect sourcing partner. Let me show you…
Step 1 – Create a set of requirements
For FIFA to find a host country for an upcoming World Cup, their committee must develop a requirements document. This is a standard set of necessities which are essential to hold a successful tournament, including a standard of stadia, each with a minimum capacity of forty thousand with facilities that as a footy fan can only be dreamt about. Consideration and plans have to be made for, including and not limited to, infrastructure (road, rail and air links), top media facilities, health and medical services, and FIFA delegates, teams and supporters accommodation. In addition to these there would be a required level of finance and insurance, and legal and government guarantees. The list is exhaustive but once the requirements have been agreed upon, FIFA will release an ‘invitation to tender’ to all qualifying countries.
In the sourcing industry, when looking to outsource a specific service to a suitable supplier the same process is followed; a requirements document is produced and would typically include, naming but a few:
- A signed non-disclosure agreement.
- A service description.
- Service level requirements.
- A draft contract with contract schedules.
- A process for how the supplier might deal with third party contracts.
- The company’s environmental and other relevant policies.
- Details of how the supplier might deal with Acquired Rights Directive (ARD) or Transfer of Undertakings of Personnel Employment (TUPE).
- An example of what the commercial arrangements might look like.
Key stakeholders will contribute, and will also include employees that have both a direct and indirect involvement that will all form part of the client sourcing team. This team should include: Procurement, Business Unit Directors and Managers, IT Director and Managers, Sourcing Specialists and the Legal Department.
It is highly recommended to ask the prospective suppliers to complete their proposals using a response template and pricing rate card. This will enable ‘like for like’ individual responses, making them simple to compare.
Step 2 – Send the invitation to tender
FIFA used to have a policy whereby the tournaments alternated between Europe and South America, but more recently as other parts of the World become more accessible, we have seen finals held in South Africa, South Korea and in the USA, where we had the first ever ‘Soccer’ World Cup. After Brazil this year, FIFA will hold their first ever World Cup in Eastern Europe when Russia host the tournament in 2018. Then, Qatar won their bid to hold the first ever World Cup to be held in the United Arab Emirates. This is similar to how the geography of outsourcing suppliers has changed. Originally India predominantly held the market, but now areas such as Eastern Europe and The Philippines have an ever increasing supplier base.
FIFA’s process to invite countries to tender is again similar to the steps taken in the sourcing industry. If you look back at FIFA’s process to find a host country for 2018 and 2022, you can see that the invitations to tender were sent out in January 2009 with a response deadline to register an interest of February 2009, and a proposal submission date of December 2010. At this point FIFA would answer potential qualifying host country questions, whilst those who decided to bid scurried off to work on their proposals knowing that these had to be submitted within a short timescale. It is these clear cut deadlines and timescales that are also defined when finding sourcing suppliers.
Step 3 – Create a shortlist
As bidders’ tenders are received, FIFA will review and score each one to create a shortlist, very much like when looking for sourcing suppliers.
From my professional experience, when creating a valuable short list, prospective suppliers’ tenders are scored on their merits: have they completed all the response fields within the template correctly, provided a pricing rate card and are prepared to agree to the contractual arrangements set within the requirements document? When the client sourcing team comes together to select the short list, the scores are taken into account and each suppliers’ merits are discussed in turn.
Step 4 – Meet with the applicants
Once FIFA has created a short list, each country will be asked to present to the selection committee. Now this is where things differ slightly, for example I have never seen David Beckham pitch up and sell the benefits of one of the big outsourcing suppliers. Although, when you think about it, suppliers should send the best available employees to sell their products and maybe if times get hard, Beckham might just be there in front of you explaining why company X has the best Help Desk facility. You never know!
This is the opportunity to dig deep into the shortlisted suppliers’ proposals and ask any appropriate questions. It’s a time to really press home, sometimes applying pressure to see how they react and to determine whether they will fit in with the organisation’s goals. It is also important to establish whether the prospective supplier will be able to maintain a relationship once the ink on the contract is dry; are you confident that what they are proposing will actually be delivered?
Step 5 – Due diligence
So prospective suppliers have been shortlisted and interviewed; what’s next...? Due diligence is the part of the selection process where FIFA is shown the detailed plans of the proposed new or improved stadia with air conditioning, how the particular country will transform their fleet of steam trains into new super duper high speed, eco-friendly double decker trains, all with the support of McDonald’s or Coca Cola. FIFA delegates visit the country in the name of doing their homework to ensure they select the right country.
So, is it the same in the outsourcing industry, popping off to either India or Eastern Europe to get a feel for what the supplier has to offer and what their plans are to look after the services, as if they were their own?
When visiting prospective supplier sites, look at how the services will be delivered, how their processes complement those required, and ensure that they can deliver exactly what they are offering. At this point exercise the option of a reference visit or two, to some of their existing customers receiving services that closely match the requirements. Where possible this should be completed independently of the supplier. Ask the reference customer exacting questions to get under the skin of what they really think of their supplier. Whilst suppliers will prime their reference customers, if you dig deep enough without the presence of a supplier representative, there is every chance of getting a true perspective on the services provided.
Step 6 – “And the host of the 2026 FIFA World Cup is…”
With all prospective countries and suppliers visited, its crunch time - the selection of the winner! FIFA has a final vote; normally the country with the fewest votes drops out, with their votes reallocated to one of the remaining countries. The votes are then counted to produce an overall winner… Sadly this is where we normally find out that it has happened again - England has yet again been removed from the process as the country with the fewest votes - the delegates thought that they would be better served in sunny Bahrain or Brazil rather than a rainy Birmingham!
The sourcing selection process is of course much more scientific than FIFA’s, using a weighted scoring matrix, cost analysis and the like, however just like FIFA, we select a winner.
Step 7 – Ongoing maintenance
The winner has been announced, now the hard work starts. FIFA will constantly monitor the host country to ensure that it is doing what is expected of them, as agreed in the terms of the contract.
The same process is followed with sourcing suppliers. FIFA regularly checks that the plan to transition is being followed, they share knowledge and experience and so do I. FIFA will have anxieties that something won’t be ready. I have these anxieties too. These ongoing checks are as crucial to ensuring the smooth operation of the World Cup as they are to a new supplier running a Data Centre. Both FIFA and I do these checks and do them well. After all who has ever heard of a World Cup being delayed?
Step 8 – “And it’s show time…”
The big day is now upon us. It is the first game, normally with the host country taking on one of the minnows. The tension builds, the eyes of the World are watching and… it normally turns into a damp squid. A torturous nil-nil bore with the only excitement being when one of the opposition takes a dive in the penalty box and the referee (or one of his six or seven assistants), doesn’t give the penalty.
Sepp Blatter can take a well-earned sigh of relief.
Well it’s the same for when services go live, if all the aforementioned steps have been completed (or if the transition work has been completed successfully) it will be. Nothing has happened. There will be no last minute drama and the service will run from minute one like clockwork. The CIO goes back into his office muttering the words “good job” under his breath and everyone lives to fight another day.
England, with the weight of a nation’s expectations on their shoulders will no doubt struggle to get out of their group and lose on penalties in the first knock out stage. Germany will probably make the final and of course, win on penalties.
There’s always the next World Cup…
If any of the above sounds familiar to your current situation or future business needs, or even if you want to challenge or comment, I would be pleased to hear from you.