When we started to explore the critical factors in choosing a contractor as part of our latest Government IT Contracting Partnership study, we started with the assumption that five factors are most important:
- Technical expertise
- Customer knowledge
- Industry perception
The results of our survey of government executives confirmed our assumptions, with technical expertise being cited as valuable or highly valuable by 93 percent of the respondents. Teamwork was a close second with an 88 percent score.
Customer knowledge and industry perception also scored over 80 percent, with an 82 percent score for customer knowledge and 81 percent for industry perception.
Only process, which we defined as attributes such as invoicing, established process for decision making, human resources, ease of establishing contact and pricing, scored lower. Respondents put process in the valuable to highly valuable range only 63 percent of the time.
However, 28 percent describe process as somewhat valuable, and only 8 percent said that it was not valuable or not very valuable. So, it is still important, but perhaps not an overriding factor.
But we also knew that those five factors don’t encompass the whole of why government customers pick contractors, so we asked a couple open ended questions exploring this concept.
The responses to these questions gave us some great insights into what government executives value.
We asked the question: When price and technical evaluations are equal, what other factors, if any, do you consider when making a contract award?
Topping the list, by far, was experience, with 41 percent of the respondents citing it in their written comments.
Many of the verbatim comments used the words experience, past history, past experience, and other words to that effect.
“Past experience in what we are looking for and recommendations,” wrote one.
“Past performance listening to customer requirements,” wrote another.
Tied closely to experience and track record is reputation, ethics and integrity, which was mentioned by 16 percent.
From the written comments, it is obvious that government executives are asking for transparency and integrity from their contractors. They also want support, teamwork and value.
We also asked about critical attributes for proposals, and clarity -- at 33 percent -- and addressing the request for proposals with complete and appropriate detail -- at 28 percent -- were by far the most common responses.
Many people simply wrote in the word "clarity." Others mentioned how important is that the proposal respond to the RFP and be clear and precise.
The responses to this question pointed out to me how critical communication with the customer is. And you need to think of the proposal as the most important piece of communication you can carry out with your customer.
And that’s a great transition to a third, open-ended question we asked: What is the single most important thing a contactor could do to partner more effectively?
The most frequent response dealt with communication and transparency, which was cited 29 percent of the time.
Honesty and integrity were cited 17 percent of the time, followed by comments related to doing what you say you are going to do, which netted 15 percent of responses.
It may seem to be very basic advice – communicate clearly, be honest and do what you say you are going to do – but it is obvious that customers hold those things dear, and contractors need to focus on satisfying those needs.
The overarching need that this report throws a bright light on is that paying attention to the basics of good business, sound customer service and being honest and transparent are what carry the day with many customers.
It is excelling at those basics that can help one company stand out from another.
My hope is that this report will be a critical tool in discovering your strengths and weaknesses and uncovering the value that your customers are seeking.
Next week, I’ll be exploring more of the report, so stay tuned and let me know if there are insights you find particularly important, and I’ll be happy to look deeper into them.
If you haven't yet, I encourage you to look at the report, and let us know what you think.
Posted on Apr 17, 2014 at 8:18 AM3 comments
In my previous blogs analyzing our latest WT Insider report on Government IT Contractor Partnering, I’ve looked at some of the overall rankings of contractors given by their customers.
The conclusion is that the relationship is in OK shape, but there is definitely room for improvement.
And nothing shines a light on the need and areas for improvement like when we look at the scores government customers gave when asked to rank their single best contractor.
First, I want to revisit the stunning results of our question: Is there a single best contractor who stands out overall?
Nearly half – 49 percent – said that that they could not name a single best contractor. That’s alarming. To half of your customers, government contractors are just a vast group of average Joes. For these customers, no one stands out.
We used this question to kick off an exploration of the attributes of the single best contractor and compare that to the overall group.
The "between the best and the rest," as we call it in the report, is telling and is similar to what we found in our earlier reports that look the strengths and weaknesses of primes and subcontractors.
The gap points the way to where companies can make efforts to improve their positioning against their customers and be noticed by their customers.
We asked participants in the study to rank their single best contractor on five attributes -- technical expertise, teamwork, customer knowledge, industry perception and process -- on a scale of 1 to 5, with 1 being poor and 5 being excellent.
Not surprisingly, no one scored their best contractor as poor. The mean score ranged from 4.6 for technical expertise to 4.3 for each in customer knowledge, industry perception and process. Teamwork had a mean score of 4.4.
All of those scores are strongly in the very good to excellent range.
We also asked the respondents to score those five attributes from not at all valuable (1) to highly valuable (5) when choosing a contractor.
For technical expertise, 93 percent said it was either valuable (69 percent) or valuable (24 percent).
Teamwork scored an 88 percent, with 45 percent saying it was highly valuable and 43 percent pegging it at valuable.
Customer knowledge was next at 82 percent, with 31 percent saying it was highly valuable and 51 percent saying valuable.
Industry perception was nearly identical with 81 percent, with 31 percent picking highly valuable and 50 percent saying valuable.
The scoring for process was a bit of an outlier, with 19 percent saying it was highly valuable and 44 percent saying valuable. Another 28 percent said it was somewhat valuable.
What gets really interesting is when we take the scores for the single best contractor and compare it to the scores for the collective group.
I’ve pulled this graphic from the report. It shows the gap between best and the overall group is significant in each attribute.
But it also shows that except for technical expertise, the best contractor is outperforming the value the customers expect for each of those attributes.
That’s a huge lesson to me.
If you can outperform your customer’s expectation, you have a high likelihood of standing out in a very crowded field.
You’ll beat your competitors, and you’ll please your customers. That’s one of the biggest takeaways from this report.
Next, I’ll dive into other critical factors government customers said they look at when picking a contractor. We’ve got a wealth of verbatim comments from our study participants to draw from, too.
Posted on Apr 16, 2014 at 9:56 AM1 comments
We’ve established in part three of our WT Insider report, the Government IT Contractor Partnership, that too many of your customers can’t name a single best contractor.
That is concerning, particularly in a market where competition is intense and so many companies put a lot of time and energy into the concept of differentiation. That was the focus of my first blog on the new study.
To reach that conclusion, we talked to government customers to get their perspective, while parts one and two of the series focused on primes and subcontractor perspective.
Now, I want to take a deeper dive, and let’s start by looking at what participants in our study said about the collective group of contractors.
We asked questions around industry perception, teamwork and process. We also asked the government executives to give an overall rating.
The results for the collective group of contractors aren’t horrible, but they aren’t great. As our research partner Lodestar told us, this isn’t a train wreck, but there is definitely room for improvement.
Here are some positive takeaways.
Most of the scores came in the good to excellent range when we talked about industry perception. For example, we found that contractors got good marks in areas such as working relationship, compliance and technical performance.
But the marks weren’t as strong in the areas of schedule performance and communicating with customers. In fact, communicating with customers received the lowest scores in the very good and excellent range.
When we asked questions around process such as proposal development, invoice consistency, decision making ability, we began to see more negative scores. The percentage of responses giving poor as an answer remained at 4 percent or below. So that’s good.
The best scores for contactors were in the technical expertise and establishing contact areas, which all had good scores in the good, very good and excellent ranges, with very good leading the way.
But proposal development and invoicing got knocked a bit with neither scoring well in the excellent range, with just 14 percent and 13 percent scores, respectively.
When we looked at the attribute of teamwork, which included characteristics such as customer knowledge, strategic value, responsiveness, and flexibility, we discovered several areas for improvement
The only characteristic that scored a 20 percent in the excellent range was customer knowledge. It also had the highest good and very good ratings at 33 percent for good and 31 percent for very good.
But management of subcontractors had the lowest excellent rating at 11 percent. Handling disputes also only garnered an excellent rating of 13 percent.
By and large, contractor scores had their highest scores in the good and very good ranges and their lowest scores were in the poor and fair ranges, except for how they manage subcontractors, which had a fair rating of 17 percent and an excellent rating of only 11 percent.
So obviously, subcontractor management is an area companies should look at for improvement.
When asked to give an overall rating to their collective group of contractors, respondents said only 13 percent would fall into the excellent category, but on the bright side, only 1 percent gave a poor rating and 13 percent a fair rating.
The majority said that contractors were either very good (35 percent) or good (37 percent).
It’s the good and excellent ratings that are the most telling to me and show that there is definitely room to move the needle.
That’s particularly shone through when we asked participants to rate their single best contractor.
Here, the good rating dropped to 10 percent, while 52 percent said their single best contractor was excellent. Another 36 percent rate their best contractor very good.
In my next blog, I’ll dig deeper into what the single best contractors are doing so well, and what other contractors can learn from them.
Posted on Apr 15, 2014 at 8:32 AM0 comments