Requests for Proposal (RFPs) are a critical piece of the procurement toolkit, helping teams find best-fit suppliers and deliver the right products and services. But RFPs can also be a real pain to write and manage.
So, how do you whip your RFP process into shape and make these documents work best for you? Here are four of the most common pain points for managing RFPs and what you can do to overcome them.
The whole point of an RFP is to explain to prospective suppliers exactly what you want from them in terms of a product or service. This isn’t just about price and delivery terms (although these factors matter greatly).
Highly complex RFPs—for high-tech equipment or sophisticated manufacturing orders, for example—can require extremely fine detail and intense manual input, taking a long time to put together. An extensive list of questions and requirements need to be compiled, requiring procurement professionals and RFP drafters to consult with multiple technical specialists, subject matter experts and managers throughout the business.
Even drafting less complex requests can be a protracted affair when the RFP templates and tools you’re using have so-called “extra” functionality that provides no real benefit, and in reality may simply amount to extraneous effort for the sourcing professional. Yet the alternative may be just as bad. Without specialist technology, RFP writers are reduced to using generic word processors and spreadsheets, spending laborious hours building their request from scratch.
Once the RFP is drafted, reviewed, amended, and approved, it must be communicated individually and confidentially with the various vendors you’ve identified as potential suppliers. Reaching out to all these companies, then managing their responses and evaluating their propositions all takes valuable time. These time pressures often make it difficult for teams to deal with too many large sourcing events in any given year.
When it comes to dealing with the time pressures of RFPs, the best place to start is finding tools that best fit your sourcing events. This may mean you need more than one drafting application. Even if a top-flight, heavyweight RFP tool with all the bells and whistles works for the top 10 percent of your spend, ask yourself: is this tool really the best tool for our midsize RFPs? If the answer is no, then use something else! Don’t feel tied down just because you have the top-of-the-range RFP tool sitting on your server. And don’t think the choice is between the leading-edge app or a Word doc. It isn’t. There are plenty of other options in between.
Removing the barriers and extra work saves both time and effort—on the buy and the supply-side of the RFP process.
You can’t fully control how vendors will respond to your RFP. No matter how well you’ve designed and drafted your request, it’s inevitable that prospects will want to answer it their own way. So, how do you compare responses when they’re all in different formats or answering completely different questions?
During the sourcing stage, it can also be difficult to manage your responses to follow-up queries from prospects. What if one vendor asks a question, and you realize that you’d like to provide all the other prospects with the same clarifying information? Managing and tracking this process can be unwieldy—especially when it inevitably happens more than once per RFP, with questions coming from multiple prospects.
Inconsistencies in responses make it difficult to process proposals and evaluate vendors against each other. When data is unstructured and isn’t uniform, it’s hard to make comparisons. Disparate data impairs visibility across the RFP process and prevents accurate reporting.
Being more consistent with how you manage your sourcing events will lead to a higher quality of vendor responses—and even more aggressive pricing. By structuring in a consistent way the data you receive from prospects, you’ll have greater visibility over the process and be more readily able to comply with category and company strategies. Consistently structured data also helps in the reporting and evaluation of RFPs.
Procurement professionals don’t always have an easy or streamlined way to build competitive sourcing events—especially if they’re at a large company. These larger organizations will often have a dedicated RFP tool that must be used for their most complex purchases. But they may otherwise rely on email, document templates and Excel spreadsheets for the more simple RFPs. There is no middle ground.
Such an approach may well have been borne out of necessity when there were not a lot of tool options available in the marketplace. Yet procurement professionals and RFP managers increasingly find themselves searching for a tool that lets them increase the number of sourcing events they can run. Pressure from business owners and managers demands that the RFP process be cost-efficient at all price points and maintain data in a consolidated view.
Search for tools that streamline the sourcing process instead of adding unnecessary steps or questions. The RFP solution market has come a long way in the last few years, and new and more efficient tools are out there.
If you find the right tool, it will shorten life cycle times and improve the team’s efficiency, enabling procurement to manage more sourcing events more efficiently.
A successful procurement function often relies on the procurement professional’s ability to build strong relationships with vendors. From a business relationship perspective, that’s great and should be encouraged. But if the insight and understanding in the CPO’s head doesn’t somehow become documented institutional knowledge for the business, then over the long haul the business will suffer.
When staff move on, they take the knowledge in their head with them. If team members change portfolios, they need to be able to quickly find the information that applies to their new accounts. When sourcing professionals need to write RFPs, they need to access the relevant information quickly and efficiently. In other words, it needs to be located all in one place.
Managers can use sourcing tools to encourage procurement professionals to be more consistent in how they approach the recording of information. The tools bring structure to how RFPs are written and managed, and become a repository for institutional knowledge. With more consistent behavior, sourcing professionals will ensure they have a record of the entire event history, helping with knowledge sharing in the future.
Give your RFPs the best chance possible. Make the process more efficient, consistent, frequent and centralized. The result will not only be better for your sourcing professionals, but for the whole business as well.