6 best practices to ensure success with your RFP

Specialising In Heavy Industry And Healthcare Cost Reduction

Helping Businesses to Perform Better

Despite the rumours and reports of the imminent death of the Request for Proposal, the RFP is still alive, and mostly well.  Predictions of its demise may have been wishful thinking by some bidders after going through another demanding stack of 500 dense pages with a too-short deadline.  For strategic procurement teams, it is still their go-to option for high-value, complex sourcing events.

Experts advise that the RFP is not the starting point for a strategic sourcing project.  Market intelligence comes first, gain information on new products and services, scour industry news and if you’re unfamiliar with the supplier landscape, use a Request for Information (RFI) as a first round.

Procurement’s Challenges  

Companies are bound by their policies and procedures and are exposed to enhanced risk and governance requirements that were not there a decade ago. In the public sector, these rules are often even more stringent.  Within these guidelines, buyers are required to ensure a fair and equitable process that delivers the best solution.

What the bidders say

One of the most common complaints is that not enough information is provided to develop a meaningful response.  Suppliers complain that they have not been properly briefed and the RFP is missing vital data.  Also, the RFP is too wordy, the time allowed is too short, there are conflicting submission instructions and so on.   Jon Williams, MD of Strategic Proposals Ltd, who has managed bid responses to thousands of RFPs on behalf of clients, says,

“too many buyers still issue mediocre, prescriptive RFPs with no notice – meaning that they inevitably end up choosing the best of a bad bunch of dull proposals. The best realise that the goal should be to ensure their evaluators can choose between excellent submissions. And everything in their buying process flows from that.”

 So what are the 6 success factors of a great RFP?

  1. Decent preparation is the first step

In heavy industries such as mining and construction, they use the term Front End Loading to refer to the development work performed on a project prior to the execution or implementation phase.  This is precisely what is needed when creating an RFP.   Plan the structure and content of the RFP before starting to write anything, and make a checklist of everything that needs to be included in it.  Well-structured RFPs lead to quality proposals which lead to successful outcomes.   There is no one ideal RFP structure but there are elements that must be included, whatever the commodity or service being sourced. The order of the information you provide to the bidders is not as important as completeness.

  1. Gain the bidder’s attention

An RFP is the face of your company to the marketplace and is in effect, a sales pitch. Tell your bidders who you are, what you do and the purpose of this RFP.  Briefly outline the problem or pain point you are trying to fix or the desired outcome you are envisaging.  Above all, define it as an opportunity to do business with you; remember your competitors are waiting to pounce.   The bidder needs to have the confidence that the RFP is real and that it is not just a fishing expedition. Bidders are trained to assess an RFP when they receive it and make a vital decision: Bid vs No Bid.  Experienced sourcing teams will have selected their targeted suppliers and it is a major disappointment to have your RFP rejected at this point.

  1. Define your project goals

This is where you expand on your problem (or opportunity) by telling potential suppliers about your current process and where it is not delivering the results you want. Articulate clearly why you are seeking these product(s) and/or service(s). Explain what you plan to accomplish and what you expect the solution to look like. Answer your own question: What are the most important things that will make the project a success?  Any issues that may be deal-breakers, such as attaining certain performance standards, must be raised early in the process.   Don’t assume the bidder understands all your internal acronyms, so provide a glossary.

  1. Share your procurement process

The use of RFP software has transformed the sourcing process and speeded it up considerably. However, for the procurement team, there is still a lot of manual effort required, even if parts of it are automated.  Many suppliers are not at all familiar with electronic RFPs and want to know what to expect, so offer the necessary support especially if you are specifying formats. Bidders want to know how, when and where to submit bids and how long the process is likely to take.  If you are requesting online and/or onsite meetings give the bidders plenty of notice.

  1. Attachments

Over and above completing the necessary Q & A and other measurable responses, your bidders may need to submit supporting documents such as company registration, accreditations, licences and permits. List all required documents and how you want to receive them, electronic or hard copies.  Another best practice is to supply pricing templates for bidders to complete. The analysis of pricing offers is resource-heavy – make it easy for both parties.

  1. Evaluation and clarification

In the private sector, the current trend is to be open about your evaluation criteria without necessarily committing to actual weightings. This is to create confidence in a fair and transparent process. Each potential supplier has different strengths and capabilities. Some will compete on low cost, others will emphasis quality or service.   Your evaluation criteria and weighting should define your requirements. Bidders will want to know how long the selection process will take but committing to an actual date is not recommended.  You are unlikely to meet it!

Consider an RFS – What is a Request for Solution (RFS)?

RFS is the terminology used to describe an open-ended RFP that is used to solicit more original and inventive offers. The reasoning is that this format is more suited to the rise of digital, cloud-based and outsourced solutions.  The traditional RFP is seen as too restrictive and the Q & A format and filling in templates do not lend themselves to creative solutions.  The challenge with the open-ended request is that it complicates and delays the review process.

According to ISG, a leading global technology research and advisory firm “the highly prescriptive nature of the traditional Request for Proposal is by definition anathema to true innovation and ill-suited to address the complex requirements faced by many clients today.”

Final Top Tip

Consider the reader. Let’s make the document easily understandable. That means it must be well-written, with concise sentences and logical flow and be error-free.  The best bids come in when there are no unnecessary restrictions on fonts, images and charts, although imposing  a word limit on marketing waffle is always recommended.

Caliba Group provides a range of specialist procurement services including strategic sourcing and category management advisory. We help businesses perform better using the most effective solutions for their needs. Contact info@calibagroup.com for more information.

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