Setting up an effective request for proposal (RFP) can be more challenging than it seems. An ineffective RFP can lead to problems through the procurement process like confusion, miscommunication, higher costs, and in the worst cases, purchasing of goods or services that don’t meet your goals. At a high-level, effective RFPs are focused on the details, written with clarity, and set clear expectations. Developing an effective RFP will create alignment and make the procurement process smoother for both buyers and vendors. Here are some things to consider while going through the RFP process.
Do your research.
Research can be both internal and external. Internal research means getting really detailed about what your needs are. What do you need to buy? What is the goal of purchasing this good or service? Who needs to be involved? The more research you do internally, the clearer your RFP will be. External research includes market research, vendor research, pricing information, and realistic timelines, to name a few. Spending time on research upfront, will help eliminate any possible surprises or issues from arising further down the procurement process.
Lay out RFPs effectively.
Your RFP should include:
- A brief overview of your current situation and needs.
- Details and descriptions - For example, the business goals driving the project, vendor expectations, timeline, budget and costing methods, how you would like vendors to structure their responses to the RFP, any pertinent images. Remember, the more detailed you can be in this section, the better quality of responses you will receive.
- Mandatory requirements - Anything information need to see from potential vendors like past experience or references.
- Delivery details - How does your organization expect the good or services to be delivered?
- Required response format - Lay down the key parameters based on what you need to compare the responses and be explicit about what the structure of the responses should look like. Missing this step can lead to inconsistency, creating an inability to compare responses accurately (which will in turn lead to hours and hours of lost time). Using an e-sourcing solution can help you to easily set up a proper structure and compare the responses with a click of a mouse.
Be careful to avoid some of these typical RFP mistakes:
- Not providing enough details about your business objectives.
- Making the RFP too lengthy by asking too many questions.
- Leaving out critical information.
Communicate throughout the RFP process.
Communication is critical through the whole procurement process. When sending out RFPs, clearly communicate what your expectations and timelines are. This will help establish consistency in vendor response. Once you’ve received responses, let potential vendors know if you plan to hold interviews and if so, by what means. Let your winning vendor know what your plans for next steps are and your organization’s communication style. Setting expectations early will prevent any friction later on. It’s also important to communicate to any rejected vendors that they have not won the bid. This courtesy will keep the relationship open for any future projects.
Taking time to carefully research and set up RFPs, as well as communicating effectively, will help align potential vendors with your organization’s goals.