Failing to properly consider MIS providers’ EFS could potentially have serious outcomes should they run into financial problems, like your selected provider failing to deliver on the contract which may require you to quickly put in place an expensive interim solution. As a result, EFS is a critical factor to consider when choosing any new provider – including your new MIS provider.
In this blog I’ll explore everything you need to know about EFS including what it means and why it’s so important to consider when choosing a new MIS.
What does economic and financial standing (EFS) mean?
EFS reflects the financial aspects of a business including annual turnover, insurance, and financial ratios. The purpose of assessing EFS for a procurement is to make sure bidders have the financial capacity to perform the contract, to ensure suppliers can remain financially secure throughout it, and to see if risk mitigations need to be put in place if there are issues with said capacity.
There are two sets of guidance school and trust leaders should follow when considering the EFS of MIS providers:
- G-Cloud & Crown Commercial Services (CCS) Framework Agreement Buyer Guide: Tests for Economic and Financial Standing
Under this guidance, schools need to consider a number of metrics including:
- Turnover ratio
- Operating margin
- Net debt to EBITDA
- Net debt plus pension deficit to EBITDA
- Net interest paid cover
- Quick ratio
- Net asset value
- Group exposure
- D&B score
- Net worth
Why is EFS important when choosing an MIS?
Possibly the most significant reason you should consider EFS during your procurement is that it ensures your establishment gets the most value for taxpayer money. EFS helps public sector organisations determine whether a supplier can provide both a competitive price and a high standard of service while staying financially stable.
If they’re not financially stable, this could result in service disruptions and may force you to seek out a short-term solution, potentially driving up your costs. Service disruptions are particularly problematic for schools that handle such sensitive data; you need long-term continuity, reliability, and security.
EFS assessments also makes sure that suppliers cannot offer unsustainable pricing and service quality standards they do not have the financial stability to uphold. Ultimately, this enables public sector organisations to easily review only the most suitable and least risky suppliers.
Evaluating EFS allows organisations to identify suppliers that are facing financial challenges or are overly reliant on investors, too, so they can mitigate the potential risks associated with them.
EFS assessments are particularly important for schools seeking out a new MIS. Ensuring providers can offer long-term contracts as well as the support, updates, and maintenance throughout without experiencing financial strain or being at risk of service disruption or lapses in service quality is essential. Plus, MIS hold sensitive student data which must be secure and accessible at all times, and are critical to the functioning of a school – service disruptions could leave schools at risk of data breaches and system failures.
About Bromcom’s EFS
There are many accolades we have to be proud of, here at Bromcom, whether it’s being the first MIS provider to launch an MIS on the cloud in the UK, being the first to incorporate AI into an MIS, or having a Queen’s Award for Enterprise to our name. But did you know we also score particularly strongly across all EFS metrics?
We’re rated as low risk across all government commercial function metrics and score highly in all G-Cloud and CCS Framework metrics. You can learn more about our EFS in this article by WhichMIS? and this blog by Phil Sanders.
Learn more about Bromcom
Bromcom is a leading cloud MIS provider that offers the most fully featured MIS on the market to schools, multi-academy trusts, and local authorities. Over 4000 schools have chosen Bromcom and are benefiting from its advanced capabilities, including access to its innovative AI technology, and cutting costs by being able to get rid of their expensive third-party apps.
You can find out more on Bromcom’s website.
