Richard Leslie, e-sourcing solutions manager at Due North, discusses the current issues facing SMEs that are keen to collaborate.

Collaborative working, at any level, is a challenge. This is particularly true when it comes to SMEs and the government.

An air of mystique surrounds the government’s procurement processes and this is arguably acting as a barrier to SMEs. From reams of paperwork and short, untenable timescales through to their complex selection criteria - there are a few things to deter SMEs from the outset, not to mention the time invested in putting together a worthy bid.

SMEs I’ve dealt with share the perception that the government has an established, closed list of contractors that they use time and time again, so the sentiment is very much ‘why should I bother putting together a bid?’ And with figures being bandied around - such as 80% of central government spend going to about 10-11 suppliers - it’s easy to see why this view persists. The status quo is very much the order of the day when it comes to procurement practice; with some procurement officers sticking to what they know and remaining blinkered to other players in the marketplace and the benefits they could offer.

According to the Department for Business Innovation and Skills, SMEs account for 48.6% of private sector turnover. This emphasises the pivotal role of SMEs within our economy and the unplugged potential they could offer the public sector.

So what can an SME bring to the table? We all know that by opening up the market to SMEs, you can drive down costs and improve quality. SMEs also tend to have a greater affinity for change within the marketplace – they swiftly respond to technological advancements and innovate quickly. The management structure isn’t as convoluted as that found in larger organisations – you can expect to deal with key decision makers within the business who can offer a personable, tailored service. These are all strong plus points.

It has to be said that a void also exists when it comes to awareness of tendering opportunities. It’s clear that the government needs to engage with SMEs more effectively and strike up a meaningful dialogue with them. In the simplest of terms - the government needs to let SMEs know that they’re open for business.

Admittedly, the government has recognised that something needs to be done when it comes to its procurement processes. It launched its own Contracts Finder website in February to help SMEs locate suitable tendering opportunities. This facility, however, is still in its infancy and it would appear that not all of the government’s departments are making full use of the site. For a system like this to work, support has to come from everyone - otherwise it becomes another half-hearted attempt at initiating reform.

Departments are also now required to publish a set of specific targeted actions to increase their business with SMEs. Another measure laced with a veneer of positivity, but by no means quantifiable at this stage.

There was also the Lean review – a six week study of the government’s procurement process to identify and measure impact of waste in current processes. This led to the implementation of pilot projects where a ‘lean’ approach was mandated across all government departments. It will be interesting to see if this translates into additional tendering opportunities for local SMEs.

Francis Maude, Minister for the Cabinet Office, who leads on public sector efficiency and reform, stated that the government’s overall aspiration is to do 25% of its business with SMEs. Like so many issues facing the government at the moment, it’s clear that implementing new strategies and targets is one thing – seeing the results is another.

It’s not just about figures though - as I’ve seen from my dealings with SMEs, there needs to be a shift in mindset too. SMEs need to feel like welcomed bidders in the marketplace and that they’ve got something of value to offer. Current procurement practices tend not to foster this outlook.

Encouragingly, there has been a push for greater transparency in the sector which should hopefully prevent contracts from being awarded to a procurement officer’s ‘favourite’ supplier, and the new Bribery Act, which came into effect in July, reinforces this message.

There are examples of best practice out there when it comes to collaborative working. The London Tenders Portal is one such example. The portal is used by 15 of London’s councils, accounting for almost half of the capital’s boroughs. The system not only enables the boroughs to comply with the government’s directive on collaborative procurement - it helps them to engage more effectively with their SME base by consolidating opportunities in one place.

Representatives from the London boroughs also meet up every quarter to discuss the portal, its functionality as well as collaborative initiatives. To date, more than 17,500 suppliers have made use of the system, with over 1100 contracts being placed through the portal, totalling a value of £4.5 billion. This is a model for collaborative working and highlights how important it is for joined up thinking within the government – if enough people get on onboard a particular project, it transforms it into a success story for all the stakeholders involved.

SMEs want to collaborate – there are just too many bureaucratic hoops to jump through at the moment. Looking ahead, processes need to be streamlined and simplified. Crucially, the government needs to get the message out there to SMEs that tendering opportunities are available, only then will collaborative working across the private and public sectors become something of a success.

For more information about Due North, visit: www.due-north.com, twitter.com/DueNorthLtd or tel: 01670 597120.