Kate Vitasek, member of the faculty of graduate and executive education in the Haslam College of Business at the University of Tennessee, explains how collaborative bidding can bring about a whole new way of looking at supplier-buyer engagements.

The act of tendering contracts to prospective suppliers is competitive by its very nature. But in its purest form, it doesn’t allow suppliers “to come and help you solve your problems,” Vitasek says. Buyers can obtain better responses by slowing down and engaging in more “collaborative interactions” during the bid process.

The practice takes the form of “dialogues” between buyers and suppliers. It amounts to the staging of “workshops” with a select number of the most promising suppliers, during which the buyer asks them key questions in order to assess which one most matches its objectives, and offers the best cultural fit. Through this exchange comes the formation of a common vision between the buyer and winning supplier — an aspiration that Vitasek likens to “Mount Everest.”

Suppliers might justifiably be reluctant to reveal sensitive information before the buyer commits to doing business with them. The solution, Vitasek says, lies in the buyer assuring them that what’s disclosed during a one-on-one workshop will remain proprietary, and not be shared with competitors. When that promise is made, “all of a sudden, suppliers start asking great questions.”

A buyer can’t, of course, afford to take the time to engage in deep discussions with every supplier. Collaborative bidding works best when the products or services to be obtained promise to provide the buyer with a competitive advantage in the marketplace. “It’s for relationships that are more strategic,” Vitasek says.

Technology can help in the supplier selection process, especially artificial intelligence, but in the end it’s all about human decision-making, she says.