As an e-procurement provider, we here at DeltaBid are in the unique position of both helping procurement professionals improve their RFP process while also receiving RFPs from prospective customers. As such, we’ve seen RFPs of all types — the good, the bad and the ugly.
RFPs are meant to be used to increase competition, “separate the wheat from the chaff” — as in find vendors who can meet your needs — and get the attention of potential new vendors. However, the success of the RFP process depends entirely on its execution. Failure to properly execute will result in merely ticking a box on your sourcing checklist and not reaping all the possible benefits for your organization.
Does your RFP process make a good first impression?
The following list is designed to be food for thought as you begin your RFP preparation. Use your request as a chance to present your company as an equal partner that values vendors.
1. Do your research on possible vendors and specifications
Speak to your internal stakeholders about specifications early on in the process. Make sure you have a clear understanding of what they need. They, too, may have ideas on prospective vendors, but you should also possible ones who may have been overlooked.
2. Should you use an RFI instead for some of these things?
Ask yourself this question as you prepare your RFP. If you find that you don’t have a clear understanding of the market or what you need or what vendors can provide, then perhaps it would be better off to start with an RFI (request for information). After the RFI, you’ll be better armed with more knowledge to make your RFP a success.
3. Be upfront: Why do you need an RFP? What does your company value?
An RFP is not a good place for vague statements. Be open about what your company values and what you’re looking for from a vendor. This clarity can help make sure your company’s values align with your chosen vendor’s.
4. Know what you need and differentiate between critical, important, and nice to have
The more information you can provide to vendors, the better. However, there should be differentiation between what is critical, what’s important, and what’s simply nice to have. This helps vendors structure their bids accordingly while also showing them where your priorities are and where their priorities should be.
5. Respect their time by avoiding handshake questions
For example, do you really need the CVs of every manager in the organization? Perhaps it could be narrowed down to team members deemed project critical. Vendors often have to invest time and resources into crafting a proper bid. Respect their time by avoiding any unnecessary questions.
6. Break it down if necessary and let vendors show their strength
Segment your RFP to help you get a better picture of the areas where vendors perform best. That way, you can run a second round and ask for new bids for a single section, or even cherry pick and choose the best vendor per item rather than winner takes all.
7. Look for information on previous customers/clients
Request to speak with previous customer or clients when possible. After all, they were once in your position, and their experience can give you an idea of what to expect as you move forward.
8. You are not doing them a favor by “throwing them a bone”
By allowing a potential vendor to participate in an RFP, you are not doing them a favor; you’re looking for a business partner. You don’t want someone so desperate for your business that they’ll do or say anything to get it.
9. Price is not the end all, be all — provide a budget, consider other factors
Cost savings are still a primary KPI in many, if not most, procurement departments. Yet there are other factors to consider besides item price that may result in cost savings down the line even if they’re not readily apparent in the bid. Think about quality, for example. Higher quality items may have a higher initial purchase price, but you could save on maintenance and repairs later on. Furthermore, providing a budget helps vendors bid accordingly, or decide whether they even want to bid.
10. Treat all vendors as if you want them all to succeed
And last but not least, build relationships. Do your best to make the process fair and transparent. Don’t even bother if you know who you’re going to select before you even read the bids. After all, you want to partner with someone who will help your company succeed!