Hands at the Table

For Next-Level Strategic Sourcing, Invite Procurement to the Table

For Next-level Strategic Sourcing, Invite Procurement to the
Table

Employers of any size all around the world and in every industry have one thing in common: they must, by necessity, rely heavily on vendors as a vital component of their business operations. In fact, many organizations have more vendors than they do employees. Unfortunately, said reliance on these third-party relationships and on the activities of a vendor can leave businesses open to various hazards in categories called risk management domains: operational, financial; technical; regulatory compliance; reputational; and information security and privacy.

By employing effective vendor risk management, a business actively engages with its third-party vendors to ensure that the vendors’ operations, actions or inactions do not cause disruption to the business’s operations or otherwise have an undesirable effect on performance. Vendor risk management also keeps a business from getting hit with hefty fines or penalties for regulatory noncompliance or witnessing damage to the company’s reputation or brand — all because of something one of its vendors did (or didn’t do). And the group that’s increasingly becoming responsible for performing the critical task of vendor risk management? The Procurement department.

A Bigger Job to Do

Traditionally, Procurement’s primary role was to handle vendor selection, sourcing and negotiating best value/pricing on goods and services and finalizing vendor contracts. Performed optimally, this role alone contributes undeniable strategic value to the business. Today Procurement does far more heavy lifting because its core functions make it uniquely equipped to proactively identify and mitigate the myriad risks that third-party vendors present. 

Why the Need for a More Proactive Approach

The business environment continues to move faster, smarter, with more organizational interdependencies. Vendor networks are evolving from simple supply chains into complex value chains, growing almost exponentially in size and technical intricacy. Businesses rely heavily on their third-party vendors to cost-effectively fulfill their portion of the process, and thus must be capable of forecasting, overseeing and responding with agility should the slightest delay or deviation in the vendor’s actions be observed. Further, regardless of what functions are outsourced to vendors, compliance with all local, state and federal regulations remains the responsibility of the business.

The Damage Can Add Up

Failing to recognize the danger of vendor risk can cost a company dearly. Last year alone, a U.S. health insurer paid $2.09 billion in criminal penalties to the Department of Justice and $8.8 million to the Securities and Exchange Commission after one of its foreign vendors ran afoul of the Foreign Corrupt Practices Act. A major utility company reported a vendor had released the personally identifiable information of nearly 300,000 employees, and a bank reported a data spill at a vendor’s location exposed nearly two million current and former customers’ personal information. Data breaches like these cost a U.S. company an average of $8.1 million, with the intangible costs of reputational damage much harder to estimate.

Yes, They Can!

Procurement is well-positioned to take the lead on vendor risk management because, frankly, it’s already doing much of the job. Consider that the core functions in modern procurement operations are divided into six accountability areas that represent the supplier lifecycle from start to end:

  1. Strategic Sourcing
  2. Contracts Management
  3. Procurement Processes
  4. Invoicing and Payments
  5. Supplier Management
  6. Spend Analytics

Coincidentally, each of these six areas is essential to managing vendor risk. Thus, by monitoring the areas for which it traditionally is responsible (e.g., Sourcing, Contracts, Procurement, Invoicing) and extending its reach to include the other areas of accountability means Procurement can provide vendor risk management at the enterprise level — in particular, identify perceived operational, financial or information security risks and ensure that any fast-breaking regulatory and compliance matters are addressed to avoid any risks of that nature.

Just as the proliferation of technology is a major contributor to vendor risk, so does it figure prominently in providing a solution to manage it. Third-party cloud-based risk platforms are available that can connect a host of flexible tools with the eProcurement platforms and accounts payable system that the Procurement Department already uses, elevating the system’s scope and reach to bring immediate visibility, transparency, order, and application of best practices into every cross-functional transaction underway. The best of these platforms are robust and scalable, offering:

  • Seamless, easy integration with the company’s existing eProcurement system(s)
  • An instinctive, approachable UX
  • Efficient automated workflows and risk management processes
  • Tailoring for unique industry needs
  • Industry compliance and regulatory requirements as they develop
  • Scannable reporting capabilities
  • Freely shareable dashboards for real-time, aligned collaboration
  • Risk domains and assessment forms that can be tailored to the needs of the business 
  • Comprehensive customer service throughout the vendor lifecycle

Personal Relationships Are Key to Success

To monitor supply chain health, Procurement can further enhance the risk management process by once again doing what it already does: cultivating great relationships with vendors. These are people they talk to often to discuss terms and resolve issues so they’ve proven they’re up to the task. Work strategically, focusing first on top-tier and most-at-risk vendors within the risk management domains yet assess the entire group, as even vendors deemed lower-tier can have an outsize impact on a business should they trigger data breach or bribery claims.

There’s a great deal of upside to increasing the breadth of a business’s Procurement operations to include leveraging a cloud-based procurement platform to meld with the company’s P2P system and utilize both, along with personal relationships, to eliminate or minimize the myriad risks inherent with vendor relationships before they can negatively affect the business. At the same time, the wealth of key data and process improvements that are realized will help an employer streamline and optimize daily operations to face the competition with a distinct advantage. 

Sources: Digitalguardian.com, Managing Vendor Risk (The Shelby Group)

4 Key Benefits of Strategic Sourcing

Last week, I was in a meeting where someone described the company’s Strategic Sourcing group as the peacekeepers in their organization. Take a moment to consider that…. What else would you call the team that is responsible for navigating the gulf between upfront costs and long-term savings while meeting the needs of multiple stakeholders? Strategic Sourcing isn’t a job for the faint of heart.

Strategic Sourcing was a term and process coined in the 90s when the dotcom era was transforming industries at record speed. Since then, the methodology has become a staple in successful procurement processes. With strategic sourcing solutions, firms can focus on maximizing the value of the entire procurement process rather than simply choosing what initially has the lowest upfront price – increasing the efficacy of procurement.

If we were to look at driving as a metaphor, it would be the equivalent of plotting your course to a destination rather than picking a route spontaneously at every cross-section you come across. By planning ahead, you end up saving time during your journey. Implementing Strategic Sourcing is to see past the initial pricing and to take a long view of of the goals and needs of the organization.

Like drivers, businesses that use strategic sourcing solutions begin by setting a destination and then figuring out the best way to get there: analyzing their business needs and historical spending, followed by outlining a strategic plan, conducting data collection and market analysis that breaks down the roster of potential suppliers. Strategic sourcing takes into account all activities that happen during the procurement cycle, from specification to receipt and payment of goods and services. As a result, businesses that use Strategic Sourcing can develop channels of supply at the lowest total cost, not just the lowest purchase price.

Here are 4 key benefits to Strategic Sourcing:

Take a Long View

The most obvious benefit businesses will experience from Strategic Sourcing would, of course, be the reduction in cost. Identifying and selecting suppliers that provide the highest value at the best price can open up compelling opportunities for your business. Even if the outcome is identical, paying less for that outcome is always preferable! The opportunity cost saved from investing in a less-than-optimal supplier may then be used to invest and improve other aspects of your business, giving you an edge against competitors.

Align Sourcing Objectives with Business Objectives

It can be difficult to draw direct comparisons between suppliers in the same industry. If you’re overly deferential to your suppliers, they can make it feel like you’re comparing apples to oranges. A supplier that offers the most cost-effective pricing in one aspect may not be the best in another. The key here is to be clear and concise in identifying what you need from the supplier. You will always want to align your sourcing activities to your organizational goals and objectives. Remember that you are optimizing for value, not cost. Cost is a component of a value, not a synonym for it. Strategic Sourcing is what allows these vague differences to become quantifiable and directly comparable in terms of data. Better alignment between between procurement teams and stakeholders allows your business to achieve better performance with higher efficiency while minimizing the risks in your supply chain.

A Long-Term Relationship With Your Suppliers

Most organizations enjoy switching suppliers about as much as people like visiting the dentist. Not only is it disruptive to your business, but it can also be costly and time consuming for your team. Your relationship with your high-value suppliers should be one that is highly collaborative and mutually beneficial (a win-win). Strategic Sourcing helps you achieve that by focusing on the core capabilities of the suppliers and assuring the right fit for the sourcing objective. This creates synergy between the organizations and its suppliers. Both the suppliers and the business should aim towards a mutual goal of success. Put simply, your suppliers should want you to succeed while feeling appreciated for their contributions to your success. Customer success is a key to repeat business and referrals.

Beyond the initial negotiations and contracting, Strategic Sourcing also involves measuring performance and continual process improvement. As you work with a supplier, you should be monitoring KPIs and collecting qualitative feedback from stakeholders. While some of the collected data might be sensitive, it’s worth considering what you can share with your suppliers so they can remediate any issues and double down on the things that are working. A shared emphasis on continuous improvement and sustainability of the supply chain provides increased flexibility in how you cooperate.

Establishing a Systematic Approach to your Procurement Processes

Strategic Sourcing allows your procurement teams to optimize productivity, increase compliance, and lower costs across the board. With improvements in data collection and digital transformations across the procurement industry, Strategic Sourcing is rapidly growing in popularity, revolutionizing procurement and supply chain processes. Coupled with a more systematic approach to cost analysis, negotiations, supplier sourcing, and even contract management, you will always be armed with the information you need to be effective.

Wrapping Up

Strategic Sourcing is an analysis of what your organization buys, from whom, at what price and at what volume. We at Vendorful are here to help you implement and streamline your critical procurement processes. To continue the driving metaphor, we are the GPS that helps guide you to your destination, saving you all the trouble from manually plotting with a map while achieving the best outcome. It’s our job to make your life easier and save you from traditional “Time Sucks.”

If you want to see how Vendorful can help you automate your processes and support you in your efforts to build a world class Strategic Sourcing program, we would be delighted to talk with you. Contact us today. 

Spend Matters Solution Map - Sourcing - Nimble Persona

Spend Matters SolutionMap Q4 2019 – Sourcing and SRM/Risk: Strong First Showing

Ladies and gentlemen, we are on the map!

The latest Spend Matters SolutionMap has been released and we’re pleased to say that Vendorful achieved a higher Customer Score than any other competing solution, in not one but two categories. That’s right: our customers rank both our Strategic Sourcing solution and our Supplier Relationship Management (SRM) and Risk solution above all competing products, from established industry heavyweights like SAP Ariba, Coupa and Zycus, to more comparable solutions like Scout RFP and Bonfire.

As you can see from the charts in this post, Vendorful consistently ranks above peers on Customer Score. And, notably, we rank higher than Scout RFP — our closest peer in terms of features and functionality — on both Customer Score and Analyst Score. We’re extremely proud to have achieved that despite being much newer to the market than Scout RFP.

However, we are not satisfied! There is lots of room for improvement and we are determined to continue doing what we have done from the day we started: provide outstanding customer service, improve our product every day, and drive innovation in the procurement software space.

Below are a few highlights from the SolutionMap results.

Sourcing — “Nimble” persona

Per Spend Matters, the “Nimble” organization is looking for modern, intuitive cloud-based software that can be deployed quickly and is competitively priced.

Spend Matters Solution Map - Sourcing - Nimble Persona

We’re proud to rank well compared to Scout RFP in this category.

Sourcing — “Deep” persona

As Spend Matters defines it, the “Deep” organization is looking for “the most comprehensive, tailorable solution for the job”. They want best-in-class functionality, and the breadth and depth to support sophisticated requirements.

Spend Matters Solution Map - Sourcing - Deep Persona

Our closest peer on this chart is Bonfire, and we’re pleased that the Spend Matters analyst ranking places us level with them. It validates that we have been able to balance market-competitive breadth and depth of functionality with the ease of use and high level of service that makes us the best-loved sourcing solution among real customers.

SRM — “Nimble” persona

Supplier Relationship Management (SRM) is a newer area for us, and to be honest, we’re not exactly sure which competing products are most comparable to our solution! So we’re very pleased that the analyst ranked us comparably to more established SRM-focused solutions like Procurence, HICX and Allocation, while again having a higher customer score than any other SRM solution.

Spend Matters Solution Map - SRM and Supplier Risk- Nimble Persona

Again, SRM is a new area for us and we expect to deliver major leaps in functionality over the coming months, all while striving to keep our customers happier than any other customer group in the procurement space!

Conclusion

From the day Vendorful was founded, we knew that pleasing our customers would be our number one priority. The two phrases we like to use as internal guides are “maniacal focus on customer satisfaction” and “white glove service.” Another concept we emphasize here at Vendorful is Customer-Driven Development. Client business objectives and user experience are the foundation of all of our software development activities — we focus on building what our customers tell us they need rather than what we think they need. It’s all part of our customer-centric culture at Vendorful, and we are extremely happy to see that our approach has paid off with our customers scoring us higher than any other solution in the areas in which we compete.

To find out for yourself why our customers love us so much, schedule a demo today!

Are your sourcing methods as effective as you think?

Quiz: Are Your Sourcing Methods as Effective as You Think?

If your procurement team is like the ones we usually encounter, then it’s a given that you would like to accomplish your work in the most efficient way possible. So, when traditional sourcing methods deliver the results you need, it’s natural that you stick with them.

However, staying competitive and keeping up with the rapid changes in the business world requires you to take a more forward-thinking approach. Technology means you now have the option do things faster and better. For example, eSourcing platforms help expand your reach as you search for new suppliers or product sources, and can do so at a more competitive cost. With a solutions landscape that has evolved considerably in recent years, there’s no better time than now to reevaluate whether your current sourcing methods are as effective as you think. (And if you are part of the aforementioned procurement teams that we encounter, you’re undoubtedly in the midst of this reevaluation process.)

To assess what you can do to improve your processes, take this brief quiz below. Read through the questions and give yourself a point for each YES answer.

  1. My team and I use a lot of documents, emails, and spreadsheets to manage our sourcing and procurement methods efficiently.
  2. The lack of visibility and transparency in traditional procurement methods means I have to spend more time managing and monitoring bids and proposals than doing productive work.
  3. I tend to spend a lot of time coordinating between suppliers and internal stakeholders to ensure everyone is in the loop.
  4. The prospect of sourcing new products or suppliers feels tedious and daunting, and usually costs a lot of money.
  5. It takes us a lot of time to prepare a proposal to send out to prospective bidders.
  6. It regularly takes our team weeks, or even months, to find the right supplier that meets our stakeholders’ requirements.
  7. Our suppliers tend to feel that we’re pitting them against each other, which creates tension in the relationship.
  8. Our relationships with our network of suppliers can be strained, especially when we are trying to get the best price for our requirements.
  9. Our team finds it difficult to find new suppliers to participate in the sourcing process.
  10. Objectively speaking, our team finds that our current processes can definitely be improved to be faster, more transparent, and cost efficient.

Now, add up the number of times you answered YES to the above questions.

If you totaled 3-5:

Reevaluate your current processes. Your methods may be effective at the moment, but there could be room for improvement. At the rate businesses are evolving, you might find it harder to keep up with the demands of clients and suppliers down the line. At this point, it would be very helpful to find new ways to keep your procurement team focused and motivated—whether through additional coaching, training or by introducing new tools to help them improve current practices.

If you added up 5 or more:

You clearly need to find a new approach to ensure that your company maintains efficiency and efficacy in spite of apparent sourcing challenges. You might consider leveraging sourcing tools that can offer transparency, streamline communication, improve sourcing practices, and manage supplier relationships all in a single eSourcing platform.

Take advantage of Vendorful’s eSourcing and vendor management platform and find out how you can use it to improve your sourcing methods. Contact us today.

Improve your procurement process

4 Ways to Improve Procurement Processes and Boost Organizational Value

Procurement teams…those are the people who find an organization’s suppliers, right? If you’ve adopted this sort of limited view about procurement (or are surrounded by people who have), you’re (or they’re) gravely underestimating the impact of these teams. The procurement planning processes themselves and the people who are responsible for implementing them can affect almost all organizational departments directly or indirectly — which is why its role in any business is critical.

So how can you ensure that your procurement processes boost organizational value for your company? Consider some of the following tips:

1. Review your current procurement process

“But we’ve always done it this way.” It’s a familiar refrain, particularly when an organization has reached a certain level of success. Complacency is not an attribute that should be nurtured, however. Indeed, reviewing processes is a critical first step in streamlining the workflow of your procurement team. Doing so will drive new efficiencies, which will ultimately have a positive impact across your entire organization. But first, you have to be willing to conduct an honest assessment of current processes and protocols.

Not motivated to dive in? Remember: beyond obtaining goods and services, procurement teams are responsible for sifting through — and engaging with — suppliers that could potentially become long-term partners of your business. These partners have to align with the big picture goals of the entire organization and should share the complementary priorities and values. Given the strategic importance of this alignment, you can hopefully use the high-stakes nature of this undertaking to motivate yourself to see if the existing processes support this vision and then amending them if they don’t.

2. Focus on increasing employee skills through training

Continuing the training and development of employees is one of the leading factors that contribute to an organization’s success. Yet, in a survey conducted by Middlesex University Institute, 74% of the research subjects felt that they weren’t able to achieve their full potential in the workplace due to limited development opportunities.

This statistic presents a huge opportunity — one that we’ve empirically witnessed in procurement — in that new technology has been adopted to help employees learn new methods to improve their job performance. So much of our attention is devoted to procurement tools. (And this makes sense because we’re in the business of developing procurement tools!) However, to optimize the value of the tools, procurement professionals should be well equipped to use them. Distance learning, on-demand training, and more have created unprecedented access training.

3. Leverage an eSourcing platform

Leveraging a strategic sourcing template for RFPs, RFIs, and RFQs can give your procurement team more transparency and visibility regarding potential suppliers. It should make it easier for procurement teams to acquire a better understanding of what each supplier can bring to the table; as well as identify specific qualities that will allow them to see if they are a great fit for the organization.

Procurement teams are lauded for their ability to provide cost savings for companies as they source the goods and/or services required by their organizations. However, the goal isn’t necessarily to find the lowest price but to optimize for the highest value, a calculation that undoubtedly includes price. A robust eSourcing platform will help disentangle the qualitative and quantitative data, enabling procurement to select the suppliers that provide the best overall value in light of the selection criteria. The result? Strategic sourcing replaces tactical purchasing.

4. Cultivate good supplier relationships

If your organization is large enough to have a procurement team, then the success of the organization will be significantly impacted by the quality of its suppliers. In addition to maintaining active relationships, procurement teams are expected to have a network of qualified suppliers to which they send out bid requests when the need arises. Granted, you can simply seek out new suppliers when a new project or requirement comes along, but that can take a lot of time and effort. Essentially, doing so will require you to start over from scratch each time. Such delays from the procurement team’s side could cause a domino effect across the whole organization.

Similarly, once the people on a procurement team are engaged with a supplier, it’s incumbent on them to be an active participant in the relationship. Be sure to treat your suppliers fairly and conduct business with the utmost professionalism.

Keep these tips in mind if you want to improve your procurement team’s effectiveness. Remember, it’s not just about saving money or about putting out the current fire. Effective sourcing practices can have a positive chain reaction to your entire organization. So take a long view, tighten your processes, and get set up for success.

Take advantage of Vendorful’s eSourcing platform and find out how we can help improve your business operations. Get in touch with us today.

Important RFP Elements

Does Your RFP Contain These Important Elements?

Your ability to attract and engage quality bids is dependent on how well you begin your procurement process.

After all, the search for the right supplier isn’t simply just about cost-savings. It’s important to establish a balance between budget and quality, and assure that you will be forging a partnership that mutually benefits you and the supplier.

In many cases, achieving this starts with crafting a high-quality RFP (request for proposals): when your RFP outline is sub-optimal, the whole sourcing process is likely to deliver sub-optimal results.

With that in mind, it’s crucial that your RFP online contains all the important elements you require. Browse through the checklist below before sending out your next RFP.

1. Statement of Purpose

Your RFP should offer a brief explanation detailing exactly what you need, your purpose for sending the RFP, and what you hope to gain.

It should also include an outline of your target timeframe. Are you seeking a long-term supplier or a partner for a one-time project?

This section should be able to set clear expectations regarding your needs.

2. Introduction

Provide comprehensive background about your company. Your prospective bidders are of course expected to do their own research, but giving them an introduction will point them in the right direction.

Try to provide as much information that you believe will be relevant to your supplier’s ability to deliver a great proposal.

3. Timeline

Map out how long the entire process will take by providing a timeline. Establish closing dates for submitting the intention to bid and be specific about deadlines.

Make sure you provide a feasible timeline for your suppliers. Give them enough time to craft their responses so you receive quality proposals.

4. Goals

Were you able to articulate a clear set of goals in your RFP? Spelling it out clearly for your potential suppliers helps them focus on delivering what you actually need. Think about what your priorities are and what you’re working towards.

5. Deliverables

Explain the deliverables you expect to receive from each proposal. Typically, this should include items such as the plan of action, timelines, and ways forward specific to your project.

6. Pricing Template

While not necessarily a requirement, best practice shows that providing potential suppliers with a pre-designed pricing format where they can detail their pricing structure makes it easier to compare one bidder from another. It also makes it easier to ensure that there are no requirements that were left out.

7. Terms and Conditions

Comprehensive RFPs typically provide a pro-forma contract that details pertinent information about the working engagement. Typically, this includes details such as payment terms, penalties, incentives, breach of contract rules, and dispute resolutions.

8. Criteria for Evaluation

A critical element of the RFP is anchored on knowing exactly how you will make your decisions when it comes to choosing the winning bid. Suppliers have to know what you are prioritizing. For example, are you putting more weight on budget over timelines? Or is price negotiable as long as they are able to ensure quality of service?

9. Wish List

Make sure that your wish list is separate from your non-negotiables. You may want certain elements that would be great to have in the proposal, but aren’t necessarily needed. These could also be items that you’re not quite sure will fit your budget. Regardless of what you want to include, if it’s not a priority or a must-have, be sure to include it as a separate list.

While there isn’t a cut-and-dried way to construct an RFP, ensuring that the above items are included when sending it will raise your chances of receiving high quality, thoughtfully prepared proposals.

Take advantage of Vendorful’s eSourcing platform and find out how we can help you write better RFPs. Get in touch with us today.

Reasons your organization is no adopting eSourcing

Top 4 Reasons Your Organization is not Adopting eSourcing and How You Can Overcome Them

For any business that has used an eSourcing platform, the benefits are evident. Using tailored technology to streamline its procurement needs can provide an organization with significant cost savings, faster cycle times, more transparency, and better control over its sourcing requirements.

Despite the demonstrable success and a strong ROI story, eSourcing adoption remains low. As Jeff Gilkerson asks in his article for Spendmatters, “Why do 30 percent of organizations not have eSourcing tools when the benefits are widely known and accepted, the technology has been around for decades, and the tools can be obtained for a relatively low investment?”

Check out the following top concerns and some ideas about how you can overcome them.

  1. Employees are generally apprehensive about change

Any form of new technology can be overwhelming and intimidating for an organization. This is especially true for procurement teams that might be used to doing things the same way for years. Despite the fact that traditional methods of sourcing are tedious and time-consuming, there is a certain comfort in knowing that you’ve already mastered the steps you have to take to get the job done. A well-worn groove might have compromised structural integrity, but it is comforting. Conversely, anything that might disrupt a familiar sourcing sequence becomes a cause for apprehension.

Addressing potential discomfort from change requires patience from management and a commitment to support the transition to the new tools. Take the time to talk about the advantages of using an eSourcing platform. Make sure you answer the questions and dedicate time to train your employees so that they can see for themselves how eSourcing can help improve their productivity and efficacy.

  1. Some companies assume their sourcing needs can’t be addressed by technology

Without a clear understanding of eSourcing technology and what it can do, it’s very easy to assume that the platform simply won’t fit your specific requirements.

With a little research, however, it’s easy to see just how broadly applicable eSourcing platforms are, regardless of industry or nature of the business. No matter how large or small your company is, no matter how complex your project may be, eSourcing will likely prove to be a useful tool to streamline the bidding process as you search for partners and suppliers. But if you’re not convinced and have lingering concerns? Ask for a demo. Have a discussion with an eSourcing vendor. At the very least, explore the opportunities in front of you before resigning yourself to doing the same thing you’ve been doing.

  1. Some employees feel overwhelmed at the prospect of full transparency

There are numerous advantages to transparency. In fact, this is one of the main advantages of an eSourcing platform. Transparency, however, can have its drawbacks. In certain professional environments, an open process is one that is ripe for judgment as well as micromanagement. The irony here is that a strong eSourcing tool should empower — not disempower — procurement teams.

The key to managing this is to focus on processes and protocols. Leveraging a tool should provide tangible benefits and the opportunity to rethink and re-implement processes. By creating the right framework around the tool, an organization can mitigate the potential “risks” of transparency while setting up its procurement team for success.

  1. Procurement teams tend to use it without proper planning

Inasmuch as eSourcing platforms are intended to make everything easier for employees, it does require a bit of planning to execute everything seamlessly.

Often, in the interest of meeting a procurement team’s urgent sourcing requirements, stakeholders may point to eSourcing as a quick and easy solution, expecting immediate results. However, as with anything in business, great results require some forethought. As detailed above, you should be rethinking the process, not eliminating it. Even a great tool can be used incorrectly. To that end, clear objectives should be identified and workable criteria for evaluation should be defined. Remember eSourcing is a tool, not a replacement for critical thinking. You have to give the tool the right context and inputs to deliver the results you need.

Working with your procurement team regarding the best way to begin the eSourcing process is a great way to ensure that you drive the best outcomes.

When it comes to procurement technology, eSourcing platforms can prove to be a boon for all kinds of organizations. And while there are risks and concerns with adopting any new technology, a thoughtful approach should allow you to address them head-on.

Take advantage of Vendorful’s eSourcing platform and find out how we can help improve your procurement process. Send a message to Vendorful today.

Create an RFP that gets results

How to Create an RFP that Gets Results

The efficacy of procurement teams is tethered to knowing and understanding what they are purchasing and why. Think this seems straightforward? Think again. Large enterprises might have vendor rosters numbering in the thousands that cut across numerous categories. And most of the ongoing vendor engagement is in the hands of stakeholders, who all too often, sit in virtual silos. So what can procurement teams do to address this? Actually, there are lots of things. But for the purpose of this post, let’s focus on maximizing the chances that the best-aligned vendors are engaged. A key tactic to engage involves leveraging procurement’s favorite three-letter acronym — the RFP (request for proposal). An RFP allows an organization to assess whether the supplier’s goods and/or services are actually going to meet its needs.

With that in mind, it’s critical that the RFP proposal is able to draw out the best answers from your potential suppliers. Therefore, it has to be prepared thoughtfully and with care.

The following steps will help to ensure this:

1. Do your research

Start by embracing the requirements gathering process. Engage with stakeholders and establish what problems they are trying to solve and understand both the parameters and constraints surrounding them. Collectively, you should determine what they actually need, which will help you draft an RFP proposal that drives specific results. Are there key areas that you want your prospective suppliers to address? Be sure to understand what elements are actually feasible and in scope. You want to take care to avoid wasting the supplier’s time — and yours — by providing an RFP to which they can reasonably respond.

If you’ve done your homework upfront, then you can be realistic about setting expectations and tie them to measurable and quantifiable company objectives.

2. Identify your ideal supplier

Different suppliers will provide different proposals. Each supplier endeavors to provide its unique viewpoint. Their approaches and solutions will vary and each one will likely have its own strengths and weaknesses. While some suppliers will focus on cost, others will attempt to win you over by providing the most comprehensive service. Others may focus on speed or support. Create a clear picture of your winning criteria to minimize the difficulty in assessing what each bid has to offer. As you write your RFP, be sure to also note what qualities your winning bid will have.

Remember: value is ultimately dynamic in nature and can change situationally. While you might be particularly priced sensitive with one purchase, you might find yourself more time-sensitive with another. By establishing the key drivers of your decision, and if possible, weighting your RFP accordingly, you increase the likelihood of strong alignment with the supplier you ultimately choose.

3. Organize your document

As a standard, any business-related document should be carefully and accurately written. This is especially true for RFPs. After all, your main goal is to find a vendor that will provide valuable goods or services for your company.

That said, be sure to outline what is needed in such a way that your priorities are clearly communicated to the potential supplier.

In general, you should be able to answer the following questions:

Why are you trying to find a supplier for this particular problem?

  • Who is the organization seeking this solution? (Provide a clear description of your organization.)
  • What is the nature of your project and what is required from your suppliers?
  • When do you need the proposal or bid completed?

From here, it is easy to create a brief introduction that summarizes key bid points.

4. Clarify your evaluation criteria

When it comes to evaluation criteria, you are at liberty to provide as much information or as few details as you like. Generally, however, suppliers need some insight you will be judging their bids in order for them to focus their answers on your actual requirements. Undoubtedly, you will be better served by conveying your priorities. However, we would caution you not to share specific weighting criteria as you don’t want suppliers to “game their responses.”

5. Provide a detailed timeline

Explicitly detail the timeframe by which your RFPs need to be answered. Suppliers must know how much time they have to prepare their responses.

For a clear and comprehensive reply, establish reasonable deadlines. Remember, complex bids require weeks of preparation (sometimes more!) and it’s unreasonable to demand that they be submitted hurriedly.

Keep these points in mind the next time you’re writing an RFP. These simple tips can help ensure that you send out an engaging and effective RFP that attracts the best bids from potential suppliers.

Take advantage of Vendorful’s eSourcing platform and find out how we can help improve your procurement process. Send a message to Vendorful today.

eSourcing can boost relationships with suppliers

3 Ways eSourcing Can Boost Supplier Relationships

When it comes to procurement, technology can make a significant impact.

Take eSourcing platforms for example. Whether it improves efficiency or reduces costs, there’s no denying that automating processes can provide significant operational value. With minimal effort, you’re able to communicate your objectives clearly, minimize tedious back and forth coordination between individual suppliers, and substantially reduce human errors in the sourcing process.

However, beyond improving internal efficiencies, companies using eSourcing platforms should also know it’s a tool that can facilitate better working relationships between businesses and suppliers. This post explains some of the ways it can do so…

1. Helps you find the right supplier efficiently

Traditional methods of sourcing suppliers can be a long-drawn-out process. It’s tedious, time-consuming and, given the effort, it takes to individually coordinate and brief potential suppliers, leaves a lot of room for error.

An eSourcing tool that streamlines the selection process makes things a lot easier. The tool allows you to simplify the entire bidding process given that everything is available on a central platform. As a buyer, you’re able to request all the necessary information you need from all potential suppliers at the same time. You can easily compare results and determine which supplier not only has the best bid but also best fits into your organization.

By identifying potential partners through eSourcing tools, you’re essentially starting a working relationship that wasn’t solely achieved through negotiation. It allows for time to create effective RFPs given that you’re removing the labor-intensive paperwork behind the process.

2. Improve communication between suppliers

Most of the errors made during the procurement process happen because of all the back and forth required to communicate with suppliers individually.

Typically, as you begin to search for suppliers, you will need to send out a brief to each of them. This means you will need to reply individually to their questions. A lot can get misinterpreted in the back-and-forth.

Using an eSourcing tool means all questions and clarification can be communicated via this centralized platform. Interaction on the platform is smoother and facilitates better collaboration. There’s also no need to keep repeating your answers given that everyone involved in the bidding process can easily refer to the information provided. In addition, coordination can be done in real-time.

Communicating in a structured way shows that you are considering your supplier’s time as well as yours. After all, as tedious as the procurement process can be for you, keep in mind that it can also be as time-consuming and complex for potential suppliers.

3. Provides unprecedented transparency

Any successful working relationship is based on trust. This can be difficult when you might be perceived to be starting a professional relationship on the wrong foot.  eSourcing tools make the process more transparent. Everyone gets the same access to the same information, and no one is given an unfair advantage.

This also translates to the selection process. Making your selection criteria available for everyone to access assures suppliers that they are all being evaluated on the same standards.

eSourcing offers a systematic and efficient approach to one of the most labor-intensive and complex processes in procurement–finding the right suppliers. Not only is this beneficial for operations, but it can also enhance supplier relations, which is critical to a project’s success.

Take advantage of Vendorful’s eSourcing platform and find out how we can help improve your procurement process, contact us today.

Write engaging RFPs

Why You Should Be Writing Engaging RFPs

What’s the difference between an acceptable RFP bid versus a stellar one that engages suppliers to put forward their best possible response?

Unfortunately, there isn’t a simple, cut-and-dried way to answer that question. However, there are guidelines that you can keep in mind to make sure you’re able to energize potential suppliers and draw out their best bids.

If you want to create engaging RFPs, try the following actionable tips:

1. Do your research

Creating a hastily researched RFP just for the sake of sending one out is a waste of time. Before you even begin writing a draft, you should learn every stage of the RFP process flow.

It’s important that you are able to identify what are non-negotiables and absolutely necessary for your company. Be thorough and explicit in identifying the areas that are absolute requirements and those that are optional. This gives your suppliers a clear idea as to whether or not they are capable of addressing your needs.

2. Have a clear idea of what your winning proposal will look like

RFPs can be responded to in various ways. Different suppliers will have varied strengths and areas of expertise. They will also have weaknesses. While some companies might compete based on their ability to reduce their costs, others will push their capabilities and focus on delivering quality. There will also be suppliers who will find a way to create a balance between price, quality, and expediency.

Paint a picture of what you need from your ideal supplier. If managing cost is your priority, make sure this is indicated in your RFP. If you want the fastest delivery time, explicitly say so. If money is no object, let your audience know. This way, your suppliers will know what your priorities are and can tailor their bids according to what you really need.

3. Provide a summary or brief introduction

The summary is where your company can briefly explain the project and capture the attention of suppliers. It also creates interest in your project. Be sure to include the key points of your RFP in the introduction that gives an informative, big picture overview of what your requirements are.

Start by indicating your company name — you’d be surprised at how many businesses forget this seemingly basic and simple element of an RFP! You might think this is obvious, but companies tend to forget the company name assuming that they are already recognized, or that everyone is waiting for them to send out RFPs. Then go into a brief explanation of what you need. Be sure to mention your target deadline and any other key dates as well.

4. Thoroughly explain your requirements

This is perhaps the most critical component of an RFP. To avoid miscommunication, be very specific about what you require. It’s important, however, that you avoid directly dictating how you want vendors to do their work for you. Be clear and detail-oriented but make sure you’re not making your vendors feel like you’ll be micromanaging every aspect of the project.

Divide your RFP into several sections for clarity, especially if your project has multiple working components.

5. Detail your selection process

Be specific about how you make your selection. Apart from meeting your requirements, what other factors will you be looking into? Who will be in charge of making the selection? Will you be following a point system?

RFPs are a great way to make sourcing more transparent for all parties. Providing more details surrounding how your business will make its selection can prove to be a great way to engage more suppliers to send in their best bids.

Consider these guidelines when creating your next RFP. You’ll surely notice a difference in terms of engagement and responses.

If you have experience with writing RFPs and can offer more helpful guidelines to boost engagement among suppliers, we’d love to hear all about it. Leave us a message below.

Contact us to find out how Vendorful can help ensure you and your suppliers benefit from eSourcing. Contact us today!