Most businesses understand the challenges of finding a reliable supplier. Sure, there are “throwaway engagements” where your focus is purely transactional, the sole focus might be quickly identifying who can get the job time. But for larger, more strategic endeavors, the scope of your evaluation likely transcends the supplier’s current capabilities. Indeed, your looking to find a partner with whom you can build a long-term, mutually beneficial working relationship.
For many organizations, the first key step on this journey is issuing an RFP (request for proposal). A strong RFP can streamline the sourcing process, attract great vendors and quality bids, and improve working relationships that drive better results.
These outcomes, however, are premised on your ability to send thoughtful and engaging proposals. So, before you hit send on that RFP, be sure to keep the following questions in mind:
1. Do you know exactly what you’re asking from your potential suppliers?
As you put your requirements together, focus on what you want your vendors to do. This includes what you expect from them, especially during the bidding stage.
Be very specific and considerate when it comes to the work requirements you’re asking them to fulfill. For example, will responding to your bid mean that they are committing themselves to a free trial or otherwise obliging them to produce work for which they might not be compensated? In some circumstances, this might be a reasonable expectation. In others, it might preclude some prospective vendors from bidding.
Be mindful of the fact that, at the end of the day, this is a business transaction. You might want to ask for the sun and stars in your RFP, but there is a simple calculus at play for any potential respondent. “Does the opportunity merit the amount of work we’ll need to invest in responding to this RFP?”
2. Are you being thoughtful about deadlines?
Insightful, well-written, high-quality bids require time to create. Although you’d like to get the ball rolling on your project and get approval from your team, your suppliers need time to respond to it.
Look, we’ve talked to enough sourcing managers to know that seemingly all stakeholders want the supplier decision to have been made yesterday. But think about how much time it will really take for suppliers to submit an RFP response. Creating unnecessary pressure by establishing a less-than-reasonable deadline could force your suppliers to pass on your project simply because they are unable or unwilling to rush something out the door, particularly at the expense of quality.
True, there are instances where suppliers will bend over backwards to accommodate your needs. However, they will also appreciate a little consideration on deadlines, especially when you consider that you’re laying the foundation for your possible future working relationship if they win the project.
3. Can you make yourself available for questions and clarification?
You may think that you have given your suppliers all the information they need to create a great bid. However, engaged and highly-interested suppliers might well reach out and ask questions about your project, request clarification on certain questions or specifications, and might even delve into your objectives and goals.
If you’re not able to set aside time to answer their questions, it could lead to responses with incomplete answers or responses that don’t make sense contextually. And then you’re stuck making important decisions on incomplete or irrelevant information. Here’s the thing — you can’t really blame them for it since they’re basing their submissions on incomplete or incorrect information. In some cases, your inability to give more insight into the project might put off potential suppliers altogether.
To avoid this, keep in mind that your responsibilities don’t get put on pause during the stretch of time between issuing and scoring your RFP. The role might be more reactive than proactive, but you do have a responsibility to address questions and concerns from potential suppliers.
4. Are you able to provide a budget?
A lot of procurement teams assume that holding back on budget information can help drive competition between suppliers and therefore, deliver more value. In many cases, perhaps the majority of them, this could be true. Sharing budget information may well be tantamount to negotiating against yourself. However, in certain circumstances, it can be particularly difficult for suppliers to create a good plan for your project without at least a ballpark budget number. This is particularly true when the scope of an engagement is determined as much by price as they are by requirements. Custom software development is a good example of a project that might benefit from some disclosures around budget.
Again, this is not to say that you should share budget information willy-nilly. Be thoughtful and you feel it’s appropriate to convey some financial parameters, consider doing so.
5. Are you clear about your goals?
Any project has to have a clear goal. All too often, however, RFPs get sent out with the requirements details, but without clear objectives. For a supplier, this creates a challenging lack of context. The requirements should exist in furtherance of a goal, not exist in a vacuum.
Having objectives in place makes it easier to identify criteria that will ultimately inform your decision. This is helpful not just for suppliers, but for you — the buyer! For instance, if your objective is to launch on a specific date, then it’s clear that the winning RFP response has to include timely delivery. On the other hand, if your goal is to ensure that the project needs to be completed at a certain budget, then it’s possible the bid with the lowest cost could have an advantage.
If you want your RFP to attract and engage the best suppliers and the strongest proposals, consider these points before you send your proposal. You’ll likely see a marked difference in the volume and quality of responses.
If you have more advice on how to manage a great RFP process, we invite you to tell us about it in the comment section below. To know how Vendorful can help improve your procurement process, get in touch with us today.