Even people experienced in selling to government don’t realise that this is possible or accept that they can and should be doing it. It’s a pity, as successful companies have been creating opportunities for years and many potential buyers welcome it.
If you create the need for your product or service you will have implicitly shaped the way the buyers think about and describe what they want, you will also have gained a much clearer idea of what the buyer values. This is an incredibly strong position to be in as long as you have thought through how the purchase will be financed and how the buyer can contract with you (e.g. using an existing contract or a framework contract as described later). Otherwise both parties are likely to be frustrated and you will threaten your chances of doing business with this buyer in future.
Building the business case
Finding a source of finance usually depends on having a business case to show that the benefits achieved will pay for the costs incurred in a reasonable period of time. Before building a business case identify your audience, someone who will need to be persuaded to invest in it, and build it with them in mind.
To help potential clients, and themselves, some suppliers have had success when providing benefits calculators and / or draft business cases to help potential buyers create a case for funding. You should be prepared to coach buyers through the process of developing a business case and getting it approved, bearing in mind that they will often not appreciate all the benefits or understand how to reflect them in financial terms.
Potential buyers are most easily influenced by business cases based on cost reduction that create a short term return on investment, and for government this will probably need to be within their three year budgeting cycle. Cost reduction isn’t as simple as it sounds; usually the tricky bit is showing how it can be practically achieved rather than showing that it will be made possible by the changes proposed.
If the cost reduction is based on reducing staff it is often relatively easy to show that staff time will be freed but difficult to show how surplus staff will be redeployed or made redundant i.e. how the cash savings can be realised. A possible option may be to transfer staff to another organisation, possibly yours.
It’s unusual for government buyers to understand the amount of management of change effort needed to make effective cost reductions. To present a credible proposition, although it reduces the cost savings, you should explain why management of change is necessary and how it will enable the savings to be realised.
Achieving policy outcomes is attractive to senior civil servants, it’s what fascinates them and leads to career progression. The challenge is to retain their interest and build a business case for the achievement of the policy outcomes that will make sense to ministers. Even where influencing policy outcomes doesn’t result in new projects it should improve your organisation’s reputation and relationships, better positioning you for other projects.
Finding a contractual route can be even more important than funding. An open competition lasting 9 months or so is going to create a frustrating delay, and a competitor may come in and win the business. The alternatives are to:
- Add it to a contract you already have (assuming it is within the scope)
- Use a framework contract (covered later)
- Contract through someone else
Such an approach may well offer the buyer ‘best value’ by reducing cost and risk.
Having a strong selling position is fine if you’ve created the need but always be alert to the possibility that someone else got there first.