Simple tips for getting the most out of your RFPs

Requests for Proposals are a crucial part of procurement’s job. They’re an essential tool for creating value and acquiring the best possible goods and services. They’re also good tool for building relationships with your vendors. It’s easy to forget that tail spend isn’t just a problem for procurement. Unmanaged spend and haphazard purchase orders can create headaches for vendors, too.

At Fairmarkit, we like to think of RFPs as opportunities. They’re opportunities for procurement to cut costs, hone strategy, ensure compliance, sure. But why stop there? Just as importantly, RFPs are opportunities to build long-term, mutually beneficial relationships with your vendors.

With this in mind, here are some tips to help you get the most out of each RFP:

• Be aware of the work you’re creating for vendors. Strong RFPs, by nature, make more work for the potential vendors. Respect their time and capabilities. If one of these vendors thinks that winning is unlikely, they may not submit a bid. So be sure to do your homework and invite strong, prequalified vendors.
• Only request what you can process. RFPs are a waste of time if the responses aren’t thoroughly evaluated. When inviting vendors, keep in mind that you should invite only as many vendors as responses you are willing to evaluate.
• But you really should add as many vendors to your RFPs as possible.There’s evidence that cost savings correlate to the number of bids for a purchase, so you have good reason to stomach the extra work. Further, companies like Fairmarkit make it easier than ever to get increase your vendor pool without increasing workload.
• Give your vendors sufficient information in your RFP. Without adequate information, vendors can’t give you good solutions. Demographics, thorough technical specs, detailed timeline, requirements for vendor size and capability—all are essential. The more detail you include the better. This might seem onerous, but the more work you put into crafting a good proposal up front is less time and money you’ll have to spend correcting your mistakes down the road. There’s less of a chance of aggravating your vendors with constant revisions and last minute requests.
• Be sure to ask specific questions so you can easily compare vendors side-by-side. Try not limit your comparison to features. Rather, compare solutions. In other words, when procuring complicated, expensive tools and services, look at the problems you’re trying to solve. Ask yourself how the various product options will help you solve your problems, as opposed getting losing the forest through the trees of non-strategic feature comparisons. As a procurement professional, the core purpose of your job is to solve problems, not to “buy stuff”!
• There’s nothing to gain from an adversarial approach. While you’re in the process of negotiations, it’s important to be transparent with vendors and avoid bluffing. It can be unethical, and risks souring the relationship.
• Good relationships with vendors can pay off in unexpected ways. A vendor with trust in your business is more likely to help you spot opportunities. They’re more likely to give you sustainable prices in the long run, and cut you some slack when you need it most. Good relationships are essential to a sound tail spend management strategy.

Follow these tips, and you’re on your way to getting the most value out of your RFPs. Follow even a few and your vendors will thank you. Remember, you’re in this together!