Saving SMEs From Tender Mercies

03 Jan 2017 | 11.53 am

Saving SMEs From Tender Mercies

Tony Corrigan’s Tenderscout takes the pain out of public sector procurement

03 Jan 2017 | 11.53 am

Irish companies are not very good at tendering for government contracts, with only around 28% of incumbents that bid for public sector contracts actually winning them. In 2014, businesses companies also spent over €25m compiling proposals for contracts that were cancelled without ever being awarded.

Tony Corrigan (pictured) founded Tenderscout to make some money from tidying the whole situation up. Launched in 2014, Tenderscout is an online platform that helps SMEs win public tenders by translating complex public procurement data into clear, comparable and useful information.

Tenderscout can also tell companies what their chances are of winning a contract before they go through the sometimes expensive process of applying for it. Corrigan’s Dublin-based startup is building momentum nicely, picking up awards and beginning expansion into the UK, the US and Canada.

The business is also finalising a €1m fundraiser, in which Growing Capital and Enterprise Ireland are involved. A double winner in the eir 2016 Spider Awards (Grand Prix and Best Digital Start-Up), Tenderscout currently employs five staff, which is expected to grow to eight shortly.

Tony Corrigan talked to Business Plus about Tenderscout, as detailed below.

How did the idea for Tenderscout originate?

I ended up doing a lot of work for government and suppliers around tender writing – I fell into it by accident. My background had been a technology one but I ended up moving into pre-sales and sales activity.

When I was evaluating tenders for various governments I saw that most of the submissions coming in were totally unsuitable. Lots of companies were spending lots of money putting proposals together for opportunities that they had no chance of winning.

I imagined that using technology they would be able to figure out which opportunities were unsuitable for them and what they had a chance of winning before they even put pen to paper.

I played around with that idea for a couple of years and formed Tenderscout in 2014.

How would you describe Tenderscout in a nutshell?

Tenderscout helps companies to win government contracts. The technology collates opportunities from around the world and it automatically qualifies as to whether they’re a good match for you or not.

How many Irish SMEs have used your services?

So far, about 400 SMEs have used our services.

How much does it cost to use Tenderscout for a typical SME?

It’s €299 a month for the standard package. That gives you access to the Tenderscout platform but it also gives you guidance around what you should do on particular opportunities. We’d be able to help you through the pitfalls of particular submissions etc.

Our clients would win on average well in excess of 70% of the contracts that they compete for.

What countries do you include in your list of available government contracts?

As many as we can. Most countries will have a publicly available list of open opportunities; some will provide you with a data feed. We hoover up as many of the opportunities that we can find – that’s anywhere between 5,000 and 15,000 per day.

The main places would be the US, Australia, Canada, Europe and the UK. The UK is the biggest market in Europe – it’s about 25% of all European activity happens through there.

The UK has a much more professional system than anywhere else. Buyers recognise that they can get value by going through this process and suppliers have stepped up to the mark in the main – they understand that competing for government contracts should be part of their core revenue generation activities.

We don’t see that in Ireland. Most people here believe it to be impossible to win a government contract because it’s something that’s the preserve of the big boys. But that isn’t the case at all.

What countries are best at public sector procurement?

The UK, Canada and Australia are the best. Beyond that it gets progressively worse until it’s an ad hoc process.

In Ireland, even though great strides have been made in professionalising the service, on the buyer side, SMEs are as behind the curve as they ever were and probably getting further behind because it’s getting more professional. Buyers are savvier now about what they’re looking for and how they are going to extract value from the people putting submissions in.

What is your approach to securing investment for Tenderscout?

We considered using the EIIS initiative, but while you’re getting money through it, it’s not smart money. EIIS investors are often happy to sit on the sidelines and ensure they get a return on their money and a cash break.

It’s difficult to get investment these days but we decided to go with the investors that would have the most impact strategically.

What’s the key takeaway regarding public tenders in Ireland?

The key takeaway was that there’s a massive opportunity there. The government is spending the best part of €9bn on public sector contracts yet companies don’t see that as a good opportunity for them.

Irish companies tend to be very poor in terms of sales process and execution. They fail to realise the opportunity that government contracting affords them. There’s about 200,000 companies in Ireland and less than 10,000 of them are active in the procurement market. If you’re anyway decent at all it’s the easiest way you are going to win sales.

Lots of Irish companies are shy when it comes to sales. Government contracts suit them because the documentation is probably more important than the relationship you might have. Anyone can write a document and get into the sales process.

What are your thoughts on running a business online?

In the digital world there’s an increasing focus on the customer. In the early days, you’d sell a product to a customer and hope that they’d never actually use it and that the credit card payments would keep rolling in.

Now you’ve got to invest more and more in customer retention. Whether customers stay with you or not is the key driver to growth and that’s what we’ll be focusing on as we move forward.

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