How Transparency Benefits Suppliers

December 17, 2020
Open data

Why suppliers gain from better data on their markets.

-Ian Makgill, Founder, Spend Network.

Better information creates better outcomes for those bidding into a market.

Which is why incumbents have a significant advantage going into a tender: they have more information. This asymmetry of information is a particular problem in public sector markets, where the process for providing bidders with information is heavily regulated.

Information asymmetry is a problem for both buyers and suppliers. Buyers can sometimes invite bids for contracts that aren’t fully explained, whilst suppliers try to sway a market by obfuscating information. The complex conditional pricing that is a feature of “Enterprise Software” is a good example of this.

Transparency starts to cut through this inefficiency, we get to know how much a supplier was paid, what they were paid for and maybe even how well they performed in a contract. With the right information, you can even show the differential between the estimated and the actual value of a contract. High-quality information can be used by rival suppliers to identify market opportunities and to increase a market’s efficiency.

Unless you’re an incumbent supplier, who would rather not have their performance examined, more information is a good thing, it helps you to compete, it drives innovation and creates new opportunities.

Spend Network aren’t committed to increased transparency for the sake of it, we believe in transparency because we think that public markets will improve because of it. If you’d like to know more about our work and how we can help you, get in touch.

Footnote:

If you’d like to read more about information asymmetry, it is worth catching up on the work of George A. Akerlof, Joseph E. Stiglitz and A. Michael Spence who were awarded the Nobel Prize for Economics, for their “advances in analysing markets and the control of information.”

Their thesis promotes the idea that for a market to function at peak efficiency, participants should have ‘perfect’ information. Akerlof, Stiglitz and Spence were able to show that a lack of information had a chilling effect on a market. Akerlof demonstrated this effect in a very readable paper on the used car market called the Market for Lemons.

If you would like to do more business with governments, get in touch.

January 25, 2023

Mixing Politics & Procurement.

The need for administrations to act at pace is often at odds with the processes and procedures needed for good procurement. If...
January 24, 2023

Improve Your Exporting With Government Data

Government procurement data can be a valuable resource for export agencies looking to expand their business and identify new opportunities in foreign...
January 18, 2023

Waiting For A Tsunami Of Text

In a world where text can be generated by an algorithm for negligible costs, we have to rethink how we value the...
January 17, 2023

Cleaning Up On Cleaning Contracts

Canberra, in the Australian Capital Territory, is home to the nations houses of parliament and a large swathe of public sector. Transparency...
January 11, 2023

New Procurement Bill Progresses Through Parliament

The proposed new Procurement Bill passed its second reading without division in the House of Commons yesterday, with the Government proposing the...
January 10, 2023

How Government Procurement Data Can Help Export Agencies

Government procurement data, the information on what goods and services government entities purchase in different markets, is an extremely valuable, and often...
January 5, 2023

Government On Covid 19 Contracts

The government has published a document, providing further information about the procurement of critical testing equipment and services during the early months...
January 3, 2023

Global Analysis: Less Is Less

Analysing 7.5 million tender documents published by governments around the world has revealed a worrying trend of publishers providing less data for...
December 1, 2022

Using Data To Build A Supply Chain

All data has a provenance. It comes from somewhere. Someone created it. Maybe it came from a sensor, or it was created...
December 1, 2022

Get Your Data Sorted.

We collect tens of thousands of documents every day. We visit more than 700 sources to collect this data. That's what our...
December 1, 2022

The Importance of Government Procurement Data for Export Agencies

There are a number of ways that government procurement data can help export agencies, including: Identifying New Markets - By understanding what...
December 1, 2022

Lord’s Have Their Say On Procurement Bill

The proposed changes to the Procurement Bill are on their third reading in the House of Lords. Last week the House of...
December 14, 2022

Buyers who stole Christmas (again)

It’s time to shed a festive tear and feel some sympathy for all the bidding teams who’ve got bids to respond to...
December 1, 2022

How Government Procurement Data Can Help Export Agencies.

If you’re in the business of exporting, you know that the global market can be a tough one to crack. In order...
December 1, 2022

EU’s Ruling On Beneficial Ownership

Last week, the Court of Justice of the European Union (CJEU) ruled that public access to registries showing personal details about companies'...

Newsletter

Compelling research, insights and data directly into your inbox.

Recent media stories

Search