🇦🇺Australia

Bad Vendor Selection Costs

2 verified sources

Definition

Manual vendor selection without structured criteria results in selecting vendors with inadequate expertise, leading to excessive costs from rework, delays, and contract renegotiations.

Key Findings

  • Financial Impact: AUD 50,000 - 500,000 per failed vendor contract in hidden fees, rework, and lost productivity
  • Frequency: Per major RFP cycle (1-2 years)
  • Root Cause: Lack of structured evaluation matrix and due diligence in RFP management

Why This Matters

The Pitch: Operations Consulting firms in Australia 🇦🇺 waste AUD 100,000+ annually on failed vendor contracts. Automation of RFP evaluation eliminates poor decisions.

Affected Stakeholders

Procurement Managers, Operations Consultants, CFOs

Deep Analysis (Premium)

Financial Impact

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Current Workarounds

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Hidden Vendor Fees

AUD 10,000 - 100,000 annually in unexpected vendor surcharges

Prolonged RFP Timelines

AUD 5,000 - 15,000 per week in internal team hours (12-week cycles)

Change Management Overtime Costs

AUD 20-50 hours/consultant per project in overtime; 10-15% cost overrun on training delivery[2][3]

Training Rework Penalties

AUD 50,000-200,000 per failed project in rework and refunds; 5-10% of project value[2][5]

Delayed Consulting Invoicing

30-60 days extended AR; 2-5% revenue leakage on unbilled hours (AUD 10,000-50,000/project)[2]

Lost Deals from Poor Proposal Processes

AUD 1-2M annual revenue loss per mid-sized firm (2-5% of $45.9bn industry revenue impacted by poor processes)

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