Blind scoring. Better than throwing darts.

Why You Should Be Blind Scoring Your Vendors’ RFP Responses

Imagine…. You’ve just finished an incredible dinner at a Michelin-rated restaurant. It’s the capstone on an amazing day that included massages, spa treatments, and tickets to a show. “It’s crazy,” you think to yourself; you’re not even doing business with this vendor yet, but it feels like there is some special connection there. Or perhaps that’s just the wine talking.

Blind scoring. Better than throwing darts.

Even under more normal circumstances, it’s difficult to eliminate bias in your procurement process. Ideally, you’d want your team to be as unbiased as possible so that they can judge RFP responses based on merit, and not what they know (or think they know) about the vendors. And while you might have the RFP essentials tattooed on your forearm, improving the integrity of the process can be challenging. A fair, unbiased purchasing process is the ambition of every procurement director, and blind scoring your vendors’ RFP proposal responses is a great way to work towards that goal.

Blind scoring is a process by which evaluators rate the responses of vendors without specific knowledge of which vendor is tied to which answer. What are the benefits of blind scoring? By adopting blind scoring, a buyer reduces the risk that bias subtly creeps into the purchase process. Of course, there are other ways that a sourcing team can allow an individual vendor to exert undue influence, such as by relying on that vendor to provide an RFP template. While there is no panacea, blind scoring can mitigate the impact of vendors that attempt to curry favor as well as unconscious biases — positive or negative — in the minds of evaluators.

When Blind Scoring is Useful

Let’s say that you are trying to purchase a new CRM for your network of car dealerships. You receive a number of RFP responses and about half are from companies with which you’re familiar. From the start, you may have preconceived notions about these companies, their product, and their reliability. Maybe you have friends who have worked at those companies and you’ve heard about their great work culture; perhaps you’ve heard anecdotes about their products on podcasts. Or maybe you haven’t heard about them at all, which makes you subconsciously dismissive of their offering. These experiences contribute to your opinion on the CRM product you have yet to buy before you’ve read past the name of the company. After all, this is the reason that companies invest so heavily in their brand. They want to drive those preconceived notions in a positive direction.

But you know as well as I do that the brand equity of a company and how well their product fits your needs can be two very different things. You may have heard that Company #1 is reliable, but do they have the numbers to prove that their product has limited downtime? Are they reliable for your industry? Do they deploy their application across multiple locations to prevent downtime? The RFP provides a platform for you to ask questions like these, both qualitative and quantitative, and evaluate the responses.

Eliminating preconceived notions will help your RFP process yield the optimal outcome. The benefits of finding the right vendor are significant along subjective dimensions like “fit” as well as objective ones like “ROI.”

Vendors and the Movement Towards Anonymity

What do vendors think of blind scoring and “anonymized” RFP responses? You may be surprised that the majority prefer them, once they truly understand the implications. We’ve spoken with vendors who, when presented with the idea that Vendorful helps buyers run blind sourcing events, have responded with something less than enthusiasm. “I want to write the RFP for the buyer,” we’ve heard more than one say. But the truth is that vendors usually benefit from blind RFPs as well. Most vendors are not the market leader and don’t necessarily have the support of favorable bias on their side. Nor are they, in many cases, the only party trying to influence the process. By having their answers evaluated on their merits, rather than the perceived merits of the supplier or sales rep, they can compete on a more level playing field.

You may be wondering: if blind scoring is “so great,” then why isn’t it used more frequently? Despite the merits of anonymizing responses, few sourcing teams actually go through the trouble of setting up blind scoring. From our conversations with procurement specialists, we’ve learned that there are two primary reasons for this:

  1. The manual process that most organizations undertake is arduous and time consuming enough without adding additional complexity. While the benefits of blind scoring are significant, there is typically a lot of pressure to “get to the finish line” as soon as possible.
  2. Organizations that have adopted software solutions to run their RFX processes are hamstrung by the limitations of the products they use, which don’t typically support any anonymizing.

Implementing Blind Scoring with a Manual RFX Process

Blind scoring can be particularly challenging when running a manual RFX process. First, it’s necessary to get someone who is not an evaluator to collate all supplier responses. If the responses are being compared side by side — a best practice — the person who handled the collation would omit the actual vendor names from the list. Then, after all the evaluators have completed the scoring, the “collator” shares the names and their associations with their respective responses. This takes quite a bit of time and time, as we know, is money. Although blind scoring ultimately benefits the buyer’s organization, the cost of a manual RFX process can undermine the benefit anonymized RFPs.

How Does Vendorful’s RFP Management Solution Solve the Blind Scoring Issue

At Vendorful, we’ve invested considerable resources to allow organizations to run best practice-based sourcing events with unprecedented ease and speed. As such, we’ve built blind scoring into our standard RFX workflow. You literally don’t have to do anything to anonymize your entire process, ensuring that your evaluators are scoring based on the merit of the vendor response for your specific company, not third-party anecdotes or broad market perception.

See how easy blind scoring can be for your team. Schedule a Vendorful demo.

9 Essential Purchasing Process KPIs and Why Tracking Them Matters

Goal-setting in procurement is nothing new. After all, it’s not like your procurement team is just wandering into a 7/11 and picking up the first thing that catches their eye. Your company has a need, and it’s the procurement team’s goal to fill that need to the best of their ability. That ambiguous “best of their ability” however, is the catch that we hear skipped time and time again by company executives. Truth be told, many executives have only a high-level understanding of procurement, and what it really means to have that department excel. Here, I’ll get down to brass tacks; I will give you the metrics you need to track your procurement efforts and learn why understanding goal-setting is essential to your purchasing process.

Strategic Sourcing KPIs

Procurement is closer to finance than, say, creative branding. Like finance, procurement focuses on quantitative information, the time value of money, and ultimately value. But while any college student studying business can tell you something about finance, very few would be able to describe the metrics of procurement.

Here are the metrics you should know about procurement KPIs:

  • Spend – If you don’t know how much you’re spending, then you have bigger problems!
  • Time to Purchase – Generally companies seek to reduce the time to purchase so that the rest of the organization can gain quicker access to solutions.
  • Opportunity Cost – We wrote a post about the intricacies of opportunity cost in procurement, but the short story is that every hour an employee spends on a purchasing project is an hour they could be using for something potentially more important.
  • Spend Under Management – Procurement teams are created to manage spend. If your team isn’t managing enough of that spending, then you likely have sub-optimal purchasing processes that could potentially be wasting millions. One reason that spend under management is low in some companies is because involving the procurement team in purchase decisions is seen as inefficient until a project reaches a certain threshold of spend.
  • Cost of Procurement as a Percentage of Spend – If running a purchasing event costs 50% of the service purchased, then clearly there are some inefficiencies in the process. Minimizing the cost of procurement as a percentage of spend should be a high priority for any procurement team.
  • FTEs per Unit of Spend Under Management – Human capital is a precious resource, and it must be deployed well. If the number of Procurement FTEs per Unit of Spend Under Management (usually measured in millions or billions of dollars, depending on the size of the organization) is too high, then either the procurement team is oversized for the organization, or Spend Under Management is too low for the size of the procurement team. Most often, the latter is the case.
  • Total Cost Savings – This is one of the direct impacts of any procurement team. How much money is the team saving the company compared to the base case of having no procurement function?
  • Quality of goods/services purchased – This metric can be difficult to measure depending on the context, but is no doubt one of the most important metrics for a successful procurement team. You can track this metric more quantitatively by employing periodic satisfaction assessments for large purchases.
  • Procurement ROI – Ultimately the company is seeking some kind of return from having a procurement process. At the end of the day, if Procurement isn’t producing a positive ROI, then how can the company justify having the team? 

Goal setting and metrics are hand-in-hand

If a goal without a plan is just a dream, then a plan without metrics is a nightmare. Jotting down a rapid plan to achieve lofty departmental goals is cathartic, but when your team meets at the end of the quarter to talk about your procurement accomplishments, are you going to have enough metrics for an informed discussion? Investing time in building key metrics will save you headaches when you sit down for that review meeting. Instead of having an unproductive meeting whose content could have been distributed more efficiently via email, your team can critically evaluate your procurement process with the metrics that you have been tracking.

Who benefits from goal setting?

The purchasing team and the executive team concerned with spend benefit directly from goal setting because they can see how their work will contribute to the success of the entire organization. Having clearly defined and metric-driven goals gives a stronger sense of purpose to the procurement team and enhances the focus and motivation needed to achieve tangible growth.

Your purchasing process changes according to your goals

Knowing your goals beforehand will influence the operation of your purchasing process. For example, if the goal for your procurement team is to reduce the time to purchase by 50%, a lengthy multi-round RFP process would be a time suck for your strategic sourcing process. Instead, you would want to create one very crisp RFP to gather the information you need to make an informed decision. That being said, your team will have multiple goals for your procurement metrics, and the context of the purchasing project is important. If the team is charged with securing a long-term partner, then the quality of the purchase could significantly outweigh the need for speed.

RFP management software, up and to the right

Tracking metrics manually is a pain. Doing anything manually is a pain for that matter. That’s why RFP management software automates as much of the procurement process as possible so that your team can focus on the strategy, and leave the mundane execution to software. After all, you don’t see accountants tapping away on tape-printing calculators anymore or Human Resources keeping a cabinet full of employee folders, so why should procurement still be using emails and excel to tackle complicated multi-faceted purchasing projects? RFP management software not only helps you track the metrics that determine the success of your procurement team, but it also helps you improve them… automatically. Slash your opportunity cost by having a central database of documentation to avoid wasting time searching through poorly organized file systems, drastically reduce your time to purchase with real-time collaboration, and improve the quality of goods/services purchased by increasing the visibility of relevant comparisons.

If you want to see Vendorful’s software first hand, schedule a demo of our vendor management services.

RFP Templates

RFP Template and Formatting Best Practices

Procurement professionals who send multiple RFPs each year will generally have a library of RFP templates. While this makes a lot of sense and could save a good bit of time in the sourcing process, there’s also a much higher chance of replicating mistakes across RFPs by using the same template over and over. Here’s the breakdown of the good, the bad, and the ugly for RFP templates, and what you can do to make sure your requests are as effective as possible.

When it comes to how buyers format RFPs, the most important element to a vendor is clarity. First, the buyer should create a contextual backdrop that the vendor can use to inform the crafting of the response.

A fleet of cargo trucks in the context of suburban Los Angeles would have a vastly different context than a fleet of cargo trucks meant for rural Afghanistan, even if the core requirements are similar.

Absent this context, what could be the right solution might be positioned in a way that doesn’t speak to the buyer. Second, the questions should be well contemplated and provide sufficient room for a response.

An answer that the buyer knows requires a degree of exposition should not be subject to the same spacing limitations as a multiple choice selection.

Finally, the actual document itself should be well considered. For example, when a buyer sends an un-editable PDF file to a group of suppliers, how are the suppliers expected to respond? Do they try to migrate the PDF — formatting and all — to a word processing application and respond inline? Is it a better practice to simply ignore the formatting of the source material to focus on crafting the response in a word processor, ultimately exporting an answers-only file to PDF?

Suppliers generally have mixed feelings about RFPs. On the one hand, they are excited at the prospect of engaging with a qualified lead to win new business. On the other hand, many of them consider the RFP an onerous process that disintermediates their sales reps. As a buyer, you can increase the rate at which vendors respond to your RFPs by making them — and your expectations around them — as clear as possible.

The difference between format and formatting for RFPs

There is a non-trivial distinction between “format” and “formatting.” As it relates to the former, it’s important that buyers offer something to the vendors that can’t be edited. In a perfect world, the buyer will use an RFP management solution that allows the vendor to craft a response in a web-based online editor. This leaves little room for confusion and allows the respondents to devote their time and energy to optimizing the response rather than fighting with documents. If a buying organization is more “old school” in its approach and elects to distribute documents via email, it’s worth spending a moment to think about the format.

Some might be surprised to learn that a good number of RFPs that are distributed via email are un-editable PDFs and locked Excel spreadsheets.

When vendors receive these sorts of documents, they must invest their time just to figure out the mechanics of a response.

If an editable file is distributed to suppliers, one potential issue is averted. However, the formatting of the file itself might pose problems. Imagine, for example, that you are confronted with an RFP question that lends itself to a rather verbose response, but you are allotted just two lines for your answer. This can be particularly challenging when using a spreadsheet application like Excel wherein a robust answer can dramatically alter the visual appearance and flow of the document. To maximize the number and quality of responses, buyers need to be thoughtful in crafting their RFP questionnaires, making sure that vendors can focus on their responses, not playing games with font sizes and line spacing.

Expectations are high for sourcing specialists

One of the challenges of working in sourcing is that there are often outsized expectations regarding the level of expertise a sourcing specialist might have in a particular product category. Whereas larger organizations might have category managers who have extensive experience procuring certain types of products or services, smaller organizations tend to hire generalists. It is therefore incumbent upon these generalists to get up to speed as quickly as possible when the decision is made to kick off a new sourcing event. The best way to do this is to get stakeholders engaged early and often. That, however, isn’t always easy. All too often, we hear stories of sourcing events that hinge on responses to an RFP template provided by a vendor. As you can imagine, the supplier response rate falls dramatically when the buyer forgets to remove the branding of the vendor that supplied the RFP response template!

One simple tip to help make your RFP templates more useful

An RFP will usually meld qualitative and quantitative analyses. The challenge, as it relates to qualitative evaluation, is how buyers should best use the information that they’ve gathered. While perhaps counterintuitive, an approach that merits serious consideration is quantifying subject analysis. To do this, it’s important that the stakeholders on the RFP team establish a clear set of rubrics. Once those guidelines have been established, individuals can score the answers, even when they feel somewhat subjective. A tip to simplify this process is to mix in canned options — usually multiple choice — where possible. Then, where applicable, let the vendors choose the option that makes sense while providing the opportunity for them to expand their answer with prose.

RFP vendor proposal templates vary from sourcing event to sourcing event, but if you follow the tips above and avoid stacking your RFP with thousands of questions, you’re on the right track.

For more tips on RFPs, check out our Essential Guide to Understanding the RFP Process.

If you want to know what else you can do to increase the quality and quantity of vendor responses, schedule a demo of Vendorful and we can show you exactly what you can do for your particular sourcing events.

What is an RFI?

What is an RFI?

The RFP is the celebrated driver of many large purchasing projects, but the RFI is the underutilized secret to success for sourcing good vendors.

What is an RFI?

An RFI, or Request For Information, is a process by which organizations gather and compare written responses provided by suppliers.

The Difference between an RFP and an RFI

Purchasers who use RFPs may think of the RFI as a waste of time when the RFPs they issue typically cover many of the same topics. This is because many purchasers have unknowingly combined the RFI and the RFP into a Frankenstein-esque sourcing document that is just as painful to complete as it is to score. A well-run RFI should drastically reduce the amount of work for an RFP and might even add some excitement to your vendor hunting expedition.

RFIs are considerably shorter than RFPs, consisting of a fraction of the questions you would find in its larger sibling. Purchasers should use an RFI as an initial investigation into what’s available in the market and what options are available to address their company’s need. For example, if you had only a cursory idea of the capabilities of marketing automation software, but you know that your marketing team needs help with automating certain processes, you could write a quick RFI asking for brief descriptions of what functionality is currently available with marketing automation solutions today.

Armed with that short document, you can reach out to dozens of vendors and collate their qualitative responses into a packet that looks more like a magazine than a phone book. (Of course, we’ll note that if you’re manually collating at all, you should chat with us about how Vendorful can save you loads of time.) With this summary of information on how to write an RFI, you not only know get insights into the breadth of offerings available in the market, but you also have some idea of which vendors can deliver which solutions.

In addition to being smaller in qualitative scope, an RFI also has significantly fewer stakeholders compared to an RFP. This is because an RFI does not result in an immediate purchase decision, but instead, may be setting the stage for the follow-up RFP.

RFIs are generally used for one of two things.

  • As a “market check” where the prospective buyer is simply gathering information for a purchase that might not be imminent
  • As a prelude to an RFP, but where the buyers want to narrow down the pool of vendors that will be invited to bid

RFI etiquette

It’s good practice to let suppliers know whether you are looking to move forward with a purchase, or if you are just performing a market check. If you are looking to make a purchase, then you should follow up with an RFP, but either way, you should thank each supplier for participating in your RFI.

By using an RFI as part of your purchase process, you can use the information you’ve acquired to winnow down the number of vendors that you invite to your follow-on RFP. Not only will this improve the value of the RFPs you receive, but this process will reduce the time investment — by vendors and your colleagues —  by excluding suppliers that don’t have a relevant product for your need. If you plan to run a two-stage request process, it might be helpful to think of the RFI as the step you take to shortlist leading companies that will be invited to participate in your RFP.

How RFx software affects RFIs

Although RFIs are considerably shorter than RFPs, they still benefit from the same RFx management software. Manual RFI processes involve wasted time such as emailing, collating, tracking etc., which would ordinarily represent a large percentage of the total time involved in an RFI. And while a Request for Information might be small in scope, they typically involve more suppliers, making auto-collation and apples-to-apples evaluations key features. Indeed, the ability to view all the information supplied by vendors side-by-side and in context is invaluable for any kind of evaluation. Plus, good RFx software should simplify the response process for vendors. Remember, your RFI is only as good as the vendors that respond and the quality of their responses. Providing a great experience for your vendors by reducing work and frustration can drastically boost your response rate.

Learn about the different methods of managing your RFIs and RFPs with our ebook here.

Sign up for a free Vendorful account to see where you can save time on your strategic sourcing process!

Time is precious

4 Biggest Time Sucks for Your Strategic Sourcing Process

Your company adopted a strategic sourcing process to save time and money. While RFPs in your strategic sourcing process should do both, RFP processes themselves are full of mismanaged time and resources.

Our team at Vendorful has compiled a list of 4 biggest time sucks in RFP processes, and how to solve them. We know (from personal experience!) the pain of manual purchasing processes. Here’s what you need to watch out for:

Time is precious

Communicating About the Process

Communication will always be a part of your strategic sourcing process, but communication about the process itself will often take longer than it should. When a sourcing process is executed with email and attachments, there is no “central bank of truth” where any one stakeholder can go to find the answers that they need. Instead, resources are scattered across inboxes and hidden in email chains. One type of communication that should neverhappen in this decade, is discussing document versions. Stakeholders should never have to question if ‘rfp-v2.1-latest.xlsx’ or ‘rfp-v2.1-latest-updated.xlsx’?” is the latest version. Instead, the entire team should be able to access the most current version of a document anywhere, and at any time.

You can solve this communication by using an RFP management solution that holds your documents in one easily accessible location. This allows your team and your potential vendors to know exactly where to look to find what they are looking for… and they never have to ask which version is current because the documents are updated instantly.

Not Communicating About the Process

“Wait… what?” That is correct, not communicating about the process can also cause serious damage to your RFP later on down the road. One of the critical purposes of an RFP is to add structure to your sourcing process. When used properly, it can save time and lead to better outcomes than using a less structured sourcing process. However, if your stakeholders don’t know exactly why they are creating the RFP, and exactly what they are looking for before they start, the consequences of that uncertainty will compound under a barrage of vendor communications. Up-front discussions about goals, criteria, and processes are going to save your team from miscommunication about the process, during the process. (Do we love the word “process” or what?!)

Not communicating about the process leads to

  1. Repeatedly revisiting assumptions
  2. Duplicating work among stakeholders
  3. Slow decision making by diffusing responsibility
  4. Over-scoping the purchase (buying an excavator when all you need is a shovel)
  5. Under-scoping the purchase (buying a shovel when you really do need an excavator)
  6. Inviting the wrong vendors
  7. Optimizing the wrong metrics (seeking the lowest price when you really need the highest reliability)

Using an RFP management solution that contains an RFP planner will allow your team to voice any uncertainties before they begin the process. Having everyone on the same page (literally) before you start your RFP will expedite the process and reduce the risk of bad purchases.

Managing Attachments

Managing email attachments across teammates is notoriously difficult, but even if you are just managing the attachments for one email account, you still have to be able to make the connection between attachments, versions, vendors, and needs. If you can’t pull up the right attachment when you need to refer to a certain question of your RFP, then you are wasting time hunting through the bottomless mess of emails. Even if you remove internal email from the equation, the attachment math is daunting. Imagine a 100-question RFP that is sent to eight suppliers, each of whom includes five attachments to accompany the questionnaire response. Each person on your team who is tasked with scoring the responses now has to juggle fifty attachments, associating them with the pertinent replies, of which there are 800. When confront with this, you’ll note that — all of a sudden — cleaning up your desk has surprisingly become an appealing way to spend the next few hours…

By using the in-browser messaging system of an RFP management solution, you can’t lose something in an email chain. All of the documents you need will be housed in a central data bank so you can access what you need, when you need it.

Questions Within Context

Try as you might, you’re probably not going to write the perfect RFP. Invariably, there will be questions that come back from suppliers — questions about your questions. When you’re lucky, the suppliers send you at least a snippet of context along with every question they ask, but if they don’t, you have to spend your day hunting through documents to figure out exactly what they are referencing. Every time that you get a question from a supplier without context, your time is being sucked away by yet another search through what might be reams of documentation.

Contextual questions should be a part of any good RFP management solution. This means when a vendor has a question about something in the RFP, the context for the question that is being asked should present itself automatically, as if by magic. You should not have to spend your days digging through your own RFP to be able to answer a vendor’s question. And what happens when you can’t find what you’re looking for? More emails. Help your vendors break the cycle, but giving them the ability to tie their questions directly to the context so that you can see both, side-by-side.

Get That Time Back

Vendorful’s RFP management solution can crush these time sucks without a second thought. With contextual questions, RFP planners, document organization, and seamless communication, Vendorful can cut out one of the largest expenses for your sourcing event — your time.

If you want to see how our strategic procurement management solution can specifically save you time, we would be delighted to show you a demo.

Complex Purchase Processes

3 Enterprise Purchases That Use a Complex Procurement Process

Not all procurement processes are equal. That’s because buying a pallet of printing paper is a very different purchase from purchasing a new server network for your entire corporation. In general, the more stakeholders, technical challenges, and moving parts a purchase has, the more complicated it will be. There is an interplay with sourcing and change management, which is important to consider early in the process.

Here are some examples of complex process purchases that are either inherently or consequentially complex.

Challenging Purchase #1- Broad Swath of Stakeholders

Converting your company from Windows to OS X

In some respects, this purchase is not challenging. On the surface, it just means purchasing new hardware — and software, in all likelihood — and onboarding people and systems. Sure, there may need to be some workarounds at the IT level, but those departments make magic on a daily basis. The real issue you are going to encounter is the stakeholders’ reaction. Imagine you have a company with employees with ages ranging from 20 to 70. Some of them may have experienced plug-in switchboards as children while others were exposed to cell phones as toddlers. It stands to reason that the speed at which this diverse group of employees becomes comfortable and productive on the new systems is going to be extremely varied. That’s why it’s critical that change management garners as much attention, if not more, when a company is making a purchase that has this broad an impact. These details need to be discussed and agreed upon well in advance — before the RFP is even created.

Challenging Purchase #2 – Components up the Wazoo

Windmill Turbines

Choose any large manufacturing project: an airplane, a ship, complex electronics — it doesn’t matter. What matters is that all of these projects have a daunting number of varied components for a procurement team to source. Let’s consider windmills. Sure, it’s easy to check the basics off our list. There are the raw materials, the product creation process, and making sure the grid is prepped for the windmill turbines. However, the procurement team also has to make sure there is adequate quality control and that shipping is not only priced competitively, but that it is also extremely timely and reliable. The number of physical components of the actual turbine can make any team’s collective head spin (unfortunately, this does not obviate the need for a windmill), but companies around the world pull this feat off because they understand the absolute necessity of applying rigorous processes to keep their supply chain both financially on target and on schedule.

Challenging Purchase #3 – High-Level Stakeholder Buy-In

Outsourced Redesign of the Coca-Cola Logo

To some creatives, using an RFP as a key part of the selection process in sourcing a creative agency is tantamount to heresy. And perhaps, at first blush, you can see their point. However, it’s worth noting that the odds are good you’ll encounter companies that take the opposite position. In fact, the general structure of an RFP can be a huge help for determining which agency would be right for the job. A significant challenge with this kind of purchase is the amount of interaction the procurement team inevitably has to do with key executives who need to be involved in this large of a decision, a challenge that is exacerbated by the highly subjective nature of much of the analysis. While the procurement team is ultimately responsible for orchestrating the selection process, the stakeholders are going to be charged with much of the assessment. This makes sense and is even a best practice, but it regularly causes a massive pileup of communication with email chains that prompt deep sighs of exasperation.

The lack of an efficient communication method, combined with highly-engaged stakeholders, invariably adds friction to the process. Begin adding up all of the time spent juggling emails, conference calls, and meetings and then multiply it by the pay rates of those who are involved in the process and another question emerges: “Given the effective cost of the selection process alone, are we better off engaging a creative agency or buying a resort for company retreats?”

They Are Possible, But They Are Painful

Teams around the world successfully execute these complex processes, but the majority of them feel the pain of legacy processes. RFP management software is designed to streamline the RFP process with features that directly target and mitigate the challenges that occur at each stage of the sourcing process.

For purchases that include broad swaths of stakeholders, a good RFP library management system has an initial planner.  This collaboration tool ensures — in advance of issuing the RFP — that all of the stakeholders are heard and that requirements, and potential hurdles for adoption, are understood and documented. Stakeholders use the planner to create goals for their RFP so that the entire team is in alignment before the RFP is even created. This feature also helps procurement teams consider potential adoption hurdles as they work to source the best solution.

When dealing with commodity goods, the best price often wins. However, in more complex sourcing events, the variables contemplated in an effort to maximize value are more difficult to disentangle. Indeed, for complicated projects with lengthy lists of requirements, RFP software should have scoring analysis. Scoring analysis lets you see a breakdown of scores by section, subsection, and perhaps even by question. Strategic sourcers know the importance of evaluating total value and that simply tying selection to price is a leading cause of bad outcomes. By drilling down into the details of how suppliers were scored for different evaluation criteria, you will be able to better identify any potential hang-ups or key differentiators.

For stakeholder engagement, RFP management software should have features such as consolidation of informationchatpermissions and in-app Q&A. Email chains and attachments don’t scale. Imagine a data grenade exploding and leaving informational shrapnel scattered throughout your inbox. A good solution brings all of this data together and provides a structured way to access and evaluate it. Chat allows real-time discussions between fellow stakeholders as well as sourcing experts without the need to coordinate a meeting that disrupts everybody’s neatly planned day. Granular permissions allow the procurement team to assign specific roles in accordance with the RFP, e.g. if a certain person has the ability to create questions, approve the final RFP, participate in scoring and more. This allows stakeholders and subject matter experts to know exactly what they are expected to contribute to the sourcing event. In-app Q&A allows vendors, to pose questions that the right person on the purchasing side can address or delegate to a colleague. No more calls and emails… well, way fewer calls and emails!

Vendorful’s RFP management tool has developed all of the features listed above to streamline your RFP process. We created Vendorful because we too have suffered through high-touch sourcing events and know exactly how awful the enterprise purchasing process can be. We would be delighted to show you these features in action. Simply schedule a demo with us.

Sourcing 101

Strategic Sourcing 101: Understanding the RFP Process

When it comes to making big-ticket purchases, buyers should try to make their evaluation process as rigorous and objective as possible. The cost of a bad decision can be devastating. A request for proposal (RFP) provides a framework for rigor and objectivity that organizations can broadly adopt as a best-practice cornerstone of their purchasing process.

A well-executed RFP process will:

  • Bridge the gap between a vague set of needs that generally result in a purchase process being launched and a set of concrete, measurable requirements that will be used to evaluate proposals for ultimately selecting a winning vendor.
  • Allow the buyer to cast a wider net, increasing the odds of finding the right vendor.
  • Promote transparency and accountability around the decision which improves sourcing in the future. Often times, an RFP process will result in choosing the best vendor for your organization’s needs. However, if the chosen vendor fails to perform as expected, or your organization’s needs have evolved, the buyer can look back to see what areas of their evaluation need to be amended for the next time.

If you’re part of a large organization, the odds are good that there is a procurement function and a well-defined, if not well executed, sourcing process. But if you work in a smaller or mid-sized organization, then you might not have spent much time considering the importance of procurement. You might be surprised to learn that not having a procurement process might actually hurt small- and medium-sized organizations more than large ones. Just think about it: if a large company makes one bad purchase, it can probably absorb up that mistake and buy its way out of the problem by engaging with a new vendor even while there is a contract in place with an existing vendor. If a small company makes a purchasing mistake on a strategic or long-term contract, the consequences could be existential.

Given the stakes, why don’t all organizations view sourcing as a foundational component? Companies are motivated to focus on selling rather than buying. The latter is often viewed as a necessary evil, rather than an area that is core to the business. Forward-thinking companies create and cultivate “strategic sourcing” teams and initiatives. However, those organizations that choose to wave away procurement considerations do so at their own peril. Indeed, if these companies are able to survive long enough to scale, they often come to realize that their purchasing needs to be radically transformed. The cost to do this in a large organization can be significant. The cost of not doing this in a large organization is typically much larger. While it may seem unnatural for a small, but growing business to invest in creating a smart sourcing process, the dividends these companies can reap down the road makes for a compelling ROI story.

Steps of an RFP

For companies who don’t yet have a sourcing methodology in place, here are the broad steps of the RFP process:

  • Identify key stakeholders— Who will be affected by this purchase decision? Who can help us figure out what we need? Who needs to be involved in evaluating our options? Who will need to sign off before we sign on the dotted line?
  • Define project goals and guidelines with stakeholders— What are we trying to accomplish with this purchase? What are our non-negotiable requirements? What are the “nice to haves” but not the “need to have” features? What are our constraints? What is our timeline? Are there spending targets associated with this sourcing event?
  • Write the RFP— What are the specific criteria upon which we will evaluate vendors? What questions should we ask vendors in order to collect the necessary information?
  • Distribute the RFP to vendors— You can print out and mail your RFP packet to vendors, start an email chain, or use RFP management software to manage your RFP through your browser. How do you want to get your requirements and questions in the hands of your prospective vendors?
  • Review and score responses— Once you receive all of your responses, your stakeholders need to become highly engaged in the process once again, reviewing and scoring the supplier responses. These scores are weighted and aggregated so that they can provide the basis for an “apples-to-apples” comparison between vendors. The results of this comparison strongly informs the next step.
  • Select a winning vendor or a small number of finalists— You needn’t blindly pick the proposal with the highest score or the lowest price; if a number of vendors all look “about the same,” it’s perfectly reasonable to advance them all to final round bake-off.
  • Negotiate and sign a contract— Make the deal and breath easy for a moment. You have applied best practices in your vendor sourcing process maximizing the odds of a good outcome.

The Vendorful team knows that sourcing can be painful, but that it’s critically important to organizational success. That’s why we created RFP management software to streamline the RFP process. Do you know the right method for your organization?  Check out our eBook to learn the Different Methods to Manage Your Sourcing Process.

Different Methods for Managing Your Suorcing Process

Downsides to Managing Your Procurement Process Manually

Manual processes are time consuming by their very nature. That, it goes without saying, is the underlying rationale behind automation in general. Every year, companies continue to spend thousands of hours on manual processes and new software companies emerge to automate those processes.

Documents everyone -- doing this manually is rough.

Marc Andreessen famously said, “Software is eating world,” and it seems like scarcely a day goes by without some major publication featuring an article contemplating the long-term consequences of Artificial Intelligence. Yes, despite the macro trend toward the streamlining and ultimately automating time-consuming processes, sourcing has remained largely untouched.

Indeed, the most common way that RFPs are managed is via ever-growing email threads with Excel and Word documents attached to them. A few years ago, Forbes released an article titled Microsoft’s Excel Might Be The Most Dangerous Software On The Planet. Although Excel is an extremely powerful tool with broad adoption, it is not necessarily an effective solution for your organization’s sourcing needs.

With so many sourcing projects yielding poor ROI, procurement departments and stakeholders alike could certainly benefit from tools that automate many of the cumbersome steps and simplify the collection and analysis of the data that drives the ultimate purchasing decision. Running manual sourcing processes increases the likelihood that organizations purchase products or services that do not properly align with their business goals. In some scenarios, poor lines of communication or lack of access to pertinent data can even result in multiple purchases of the same product or service by a single organization. 

Even when an organization is successfully able to avoid redundant purchases, there can be significant costs to running a process “the old-fashioned way.” Check out some of the downsides to managing your vendor procurement process manually.

Selection fit—The odds that you make a poor decision increase when using a manual process as it’s harder to compile all of the information in a centralized location, make apples-to-apples comparisons, and drive stakeholder engagement due to limited visibility of the process.

Process cost—Absent a compelling software solution, it becomes more time consuming to source products and services. Copying and pasting from multiple files into a single spreadsheet can take hours. And when this happens, organizations are reminded of the old adage: “Time is money.” This is particularly true when there are larger, more complex sourcing projects.

Poor ROI—Mix a less-than-optimal selection with a process that takes more time than it should and you have a recipe for an underwhelming return on investment. It is critical for organizations to do an ROI analysis to truly understand the costs of their sourcing efforts.

If you are managing your procurement process manually, you run the risk of making some of the most common errors including:

  • Making judgments based on incomplete information
  • Introducing copy-and-paste errors when building consolidated documents
  • Creating errors due to rushing because stakeholders find the process time consuming and cumbersome, precluding them from focusing on their primary responsibilities
  • Gathering incomplete or poorly-defined requirements
  • Underestimating the amount of work involved, which results in delays

Does any of this sound familiar? Organizations that embrace business process automation have cut costs and saved time. By eliminating much of the manual overhead involved in your sourcing process, you reduce the error rate and time investment, while boosting your ROI. This approach has worked in other domains. For example, B2B marketers who implement marketing automation increase their sales pipeline contribution by 10%. (Forrester Research) Similarly, embracing a good sourcing solution that automates critical parts of the process makes it easy to apply best practices and therefore improve outcomes and ROI. Sign up for Vendorful to see how an RFP management solution can improve your vendor procurement process.

Must-Have RFP Management features

Purchasing RFP Management Software? Look At These 9 Must-Have Features

RFP Management software is undeniably useful for any company that uses email, spreadsheets or printed packets of paper to handle their procurement processes. However, not all RFP management solutions are created equal, and these are the 9 must-have features you should consider before purchasing an RFP management solution.

Collaboration Features

Sourcing can be very messy, and the specific collaboration features of your RFP management platform can be the difference between using the software as a tool, and having the software become an integral and valuable part of your procurement team. Must-have collaboration features include:

Team Notifications —As a team leader in purchasing, you need to know when your team needs input, and when external stakeholders need more information. Every minute that a project is on hold because the team doesn’t know what to do next is another minute of expense that could be saved. The procurement team should be spending as little time as possible updating stakeholders on the state of their RFPs. Team notifications and overall transparency in your RFP solution allows all stakeholders to easily see where the process stands, who on your team is responsible for specific issues, how vendors compare to each other, what the final decision is, and what criteria were used to make that decision.

Knowledge Sharing —Having an easy way to discover who has the correct knowledge for a certain project, and then applying it in a way that makes sense should be a priority for any RFP library management system.

Task Assignment — Knowing what your team is doing at any given time is not useful unless your team knows what their goals, path, and outcomes should be for any part of your purchasing process. The ability to assign tasks lets you stay on top of your team, potential stakeholders, and your own schedule.

Alerts — If a problem exists that needs immediate attention, you want to know about it… well, immediately. Alerts enable the immediate sharing of time-sensitive information such as overdue tasks, vendor responses, and changes in timelines. Having automated alerts keep individual contributors organized with less effort on the part of the manager.

Collaborative Request Building — Don’t frustrate potential vendor partners (not to mention your own colleagues!) with an RFP that differs from what your stakeholders really want.. By enabling your team and external stakeholders to take part in building requests, you eliminate confusion between your team and the vendors, as well as limiting the disconnects between the purchasing team and external stakeholders.

Collaborative Response Scoring — Some RFPs can be as dense as a dictionary, so it makes sense to split up the response scoring across your team. The ability to have collaborative response scoring becomes even more valuable with people who are experts in their respective scoring section.

Vendor Tracking — One must-have feature for RFP management solutions is vendor tracking. Vendor tracking allows you to see where every vendor is in their response process. Think of this feature as a timeline for every vendor that may respond. Are they in the middle of responding, or have they not even looked at the request?

Seamless Response Collation — If you’re going to be comparing apples-to-apples, it helps to be able to see the apples side-by-side. Seamless response collation allows teams to rapidly compare responses by showing responses side-by-side with all relevant attachments and supporting materials. If you can’t compare responses to each other, then your RFP management solution isn’t working hard enough on saving you time.

Permissions and Transparency — Purchases don’t just involve the procurement department. After all, the department isn’t purchasing for itself. Stakeholders exist across the company, and they all need to be able to contribute to the purchase process to get the best outcome. At the same time, having every person contribute to a process creates an unmanageable mess. Stakeholders need clearly defined roles and guidelines for their contribution. Whether that is supporting background research, developing criteria, scoring vendor responses, or approving the final decision, RFP management software should enable the person in charge of the process to clearly define who is responsible for what and the permissions they have for each RFP.

Breaking old habits takes strong will and knowledge of the pain of your current process. Your current procedures might be clunky, but at least they’re familiar.

However, keeping a painful process with too many people involved could be costing your companysignificantly more than you think. Changing seems risky, and purchasing is all about reducing risk. But a good RFP management solution adapts easily to your workflow, it doesn’t force you to adapt to it. RFP management software is not a defined process, but rather a tool that can be applied to current company strategies and timelines. The right RFP management solution will make intuitive sense to stakeholders across the organization, even those who rarely touch the purchasing process. Handholding takes time, and the procurement department shouldn’t have to spend more time guiding stakeholders through new RFP management software than they used to spend corralling them over email.

When evaluating RFP management solution features, you should ask yourself these questions in this order:

  • Will this feature help us achieve a better outcome in terms of quality or price?
  • If not, will it help us save time?
  • If not, will it make our process more transparent and repeatable?

If the core features of the RFP management software that you are looking at does not pass at least one of these tests, then you should reevaluate its potential as a true solution.

Vendorful’s RFP management solution has all of the must-have features that procurement teams need because our team has been in your shoes. Every one of our features will pass those evaluation questions without a second thought, and even the most out-of-touch stakeholder in your organization will be able to contribute to your RFPs without additional hand-holding. If you are interested in addressing the pitfalls of your purchasing process, and you are looking for a solution, schedule a demo of our vendor management services.

Laptops, where RFPs happen

Is eSourcing Right For My Business?

eSourcing consists of using software to manage and collect suppliers across a variety of projects. But what does that mean for you and your department?

The Difference Between Sourcing and Procurement

Procurement is the sourcing, purchasing, negotiating and acquisition process but also includes risk management and sustainability. Sourcing is the component of the procurement process that deals with supplier selection and management.

eSourcing software will not solve your negotiation problems, your acquisition problems, or some of your more complicated contractual issues. It will, however, make it easier to coordinate suppliers.

So we have established that sourcing software will help you coordinate suppliers, but how does that translate into actual business advantages

A good sourcing software solution will provide:

Direct cost savings by improving the competitive process of supplier selection. Instead of being limited to two suppliers simply because your infrastructure can’t handle more communication, you will now be able to have a dozen (or more) suppliers competing for the same contract.

Greatly reduce cycle time by streamlining communication through visible dashboards, timely notifications, and contained file sharing to keep all relevant communications in the same place.

because the pricing, timeliness and other attributes of suppliers are saved and easily accessible for number crunching. Organizations can create evaluations of supplier performance and identify areas for improvement going forward.Laptops, where RFPs happenGreater transparency and integritybecause the pricing, timeliness and other attributes of suppliers are saved and easily accessible for number crunching. Organizations can create evaluations of supplier performance and identify areas for improvement going forward.

But is eSourcing right for my business?

Switching to using a software solution may seem painful, but a company should use a rigorous sourcing process whenever the cost of making a poor sourcing decision is likely to exceed the cost of the sourcing process.

Here is a thought exercise: If you owned a small Mom and Pop book store and you needed to buy paper, the cost of choosing the wrong paper would not be anywhere near the cost of investing in a software solution. But, if you were in charge of sourcing paper for a Fortune 500 company, purchasing the wrong paper could have massive ramifications across the corporation that would far outweigh the relatively low cost of the software. Of course, this is an extreme example and most companies will fall somewhere in between, but the point is that the majority of businesses will be impacted by the savings derived by using sourcing software.

If your company runs many purchasing and sourcing projects, the costs of small mistakes would quickly add up to the cost of the software. Sure, there are rigorous sourcing processes that are manual and would help reduce the risk of a large purchasing error, but the lower cost of running a rigorous process through sourcing software would increase the number of sourcing projects that could benefit from this process.

But if sourcing software has clear benefits, why are companies still using manual processes?

Hesitations to switching to sourcing management software generally fall into three categories:

The cost of changing our existing processes is too highgood solution should be designed to fit right into your existing processes. The software should not be designed to create a whole new strategy for your team, but instead developed to replace the manual tasks that rob your time such as team coordination, supplier communication, and document collation.

It is too difficult to train all potential stakeholdersIf you choose the right software, sourcing solutions should be as easy to use as any of the other applications we use in our daily professional lives. An intuitive software product is designed to simplify, not complicate the sourcing process. A good solution would consolidate and streamline the many manual processes that you and your team already undertake.

My sourcing is too specialized for sourcing softwareThis is a common concern when contemplating eSourcing solutions and it is best addressed with more questions. Would a mistake in your sourcing be expensive? Do you have manual tasks in your process that need little mental effort but require too much time? Are you limited to non-competitive suppliers because sourcing other suppliers seems like a monumental task? If your answer to any of these questions is yes, then it would be worth a small amount of your time to investigate possible sourcing software solutions.

eSourcing isn’t for every company… but it should be used by most companies. Bulky sourcing processes can affect the whole company. If you want to see an example of how easy it would be to implement a time-saving and intuitive software solution, sign up for Vendorful’s RFP Management Software.