There are a lot of misconceptions about Requests for Proposals floating around the internet, and some of that false info might be holding you back. Let’s be honest: RFPs get a lot of bad press. And like any good myth, there’s often a grain of truth hidden beneath the folklore and false beliefs. (Or at least, there was, once upon a time.)
But now it’s time to debunk those myths so that procurement departments can use these valuable tools to their full advantage. Here are four commonly-held misconceptions about RFPs—and why they've been thoroughly busted!
Myth 1: Time-consuming RFPs are a necessary evil
Yes, RFPs can be complex—and they’re probably lengthier than they’ve ever been before. That’s the grain of truth in this first myth. But it doesn’t naturally follow that they need to always take a ton of time.
There are multiple reasons why RFPs have become progressively labyrinthine and lengthy—like increasingly complicated technical specifications and the need to conform to more rigorous compliance standards. But at the same time, requirements have increased and procurement technology has developed to meet our new needs through the development of RFP writing tools and platforms.
Yet if used incorrectly, improved RFP technology can also contribute to the length of time it takes to manage a sourcing event to completion. Some tools, designed for complex RFPs, force you to enter irrelevant information and dozens of pages for even the simplest RFP. The solution to time-consuming RFPs is to only include the information and requirements necessary, and ignore everything else. But that means finding a process and technology that not only removes the manual work and streamlines steps, but one that is also fit for purpose for smaller, less complex sourcing events. Instead of adding time-consuming steps, smart RFP processes and technology should limit them.
This might mean—and most probably will mean—having more than one process and tool: one for more complex RFPs and one for simple ones. Naturally, this requires a bit of work upfront. But in the end, the amount of time it takes to find the rights tools and develop appropriate processes will save your team valuable time, effort and headaches for every RFP going forward.
Myth 2: Because they’re so time consuming, you can only run a handful of RFPs per year
Again, there is a real truth to this myth—if you’re using the wrong technology and processes. Once you assume the first myth, the second myth automatically follows. If your RFPs are taking you a long time to do, then you will only be able to handle a limited quantity with the time and resources you have available. But this is a self-perpetuating situation, because by assuming RFPs are time-consuming, procurement teams will often budget their time to limit how many RFPs they will handle in any given year.
The reality is, there’s a sure way to bust this myth wide open and wrestle your procurement team from its limiting grip. Quite simply, you can get more competitive bids for more things if you are minimizing the amount of time RFP events take. Again, it comes down to instituting better processes in your organization and taking the time to find tools that can be flexible and adapt to the best-fit RFPs to find the goods and services that your company needs.
A major component of this process change and technology hunt is to identify what parts of the RFP need to be customized and delivered by a human, and what can be automated… which leads us to the third myth.
Myth 3: RFPs are so complex that there’s simply no room for automation
Unlike the other myths on this list, there’s no grain of truth here. In fact, the opposite is true. Complex as RFPs can be, there is always a place for automation. Complex doesn’t mean unique. Automation not only thrives on complexity, its implementation simplifies the gordian knot of a complex system by pulling out the thread of a common solution. With RFPs in particular, there are multiple points in the process where you can infuse the procurement, specs and supplier data you already have to implement automated steps along the way.
At the very simplest end of the spectrum, static data—like purchaser names and contact details—can be automatically loaded. RFPs for like-for-like items can be copied over. But there is a wide range of process steps within even the most complex RFPs that can benefit from artificial intelligence and machine learning. Automation doesn’t replace the collaborative, human, relationship-based parts of RFPs. Instead, it helps augment the sourcer in many ways. Here are some examples:
- At the creation of an RFP, information can be automatically pulled from other integrated systems, such as your Customer Relationship Management software, Enterprise Resource Planning platform, or design packages that contain a schedule of required components.
- Vendor profiles can be automatically reviewed and updated within the RFP.
- Progress can be tracked along the lifecycle of the event.
- Response reminders can be formulated and delivered to stakeholders throughout the organization.
- Proposal scoring can be calculated and measured automatically.
- Vendor evaluations can be analyzed based on set criteria.
- Apple-to-apples pricing tables—such as List of Eligible Technologies (LET)—can be obtained and used to automate comparisons.
Myth 4: RFP tools only do one thing: RFPs
Okay, so this myth may have been true once, long ago. But it’s far from true today.
With significant improvements in technology and data, more and more of the procurement function is digitizing. And thanks to better integrations, RFP tools now share data and connectivity with a host of other solutions within the procurement ecosystem, which means they can access the same information as your other systems. RFP tools are also more adaptable to the needs of today’s procurement teams.
For a lot of sourcers, the spend from RFPs is often treated differently than the less complex and less strategic spend within your organization. But that doesn’t mean your RFP tool needs to only serve the purpose of RFPs. These days they can be used for a host of sourcing events by leveraging the data and automation that are usually applied to transactional spend—and applying it to the strategic spend handled by RFPs.
RFPs are an important tool for procurement professionals and the organizations they serve. Without them, complex and strategic spends simply wouldn’t happen. But RFPs come with their own costs. People think they’re a time-consuming-but-necessary evil. Because they can be so labor-intensive, procurement teams often believe they can only run a handful a year. And because RFPs are so complex, sourcers are convinced there’s simply no room for automation.
The final fallacy is that RFP tools are only fit for only one purpose: writing RFPs. But these are all just myths that get in the way of efficient sourcing. The RFP process doesn’t have to be overly cumbersome, limited by time constraints and lacking automation. It can be a process that brings value to the entire organization.