Five things to consider before sending your RFP

5 Things to Consider Before Hitting Send on Your RFP

Most businesses understand the challenges of finding a reliable supplier. Sure, there are “throwaway engagements” where your focus is purely transactional, the sole focus might be quickly identifying who can get the job time. But for larger, more strategic endeavors, the scope of your evaluation likely transcends the supplier’s current capabilities. Indeed, your looking to find a partner with whom you can build a long-term, mutually beneficial working relationship.

For many organizations, the first key step on this journey is issuing an RFP (request for proposal). A strong client RFP can streamline the sourcing process, attract great vendors and quality bids, and improve working relationships that drive better results.

These outcomes, however, are premised on your ability to send thoughtful and engaging proposals. So, before you hit send on that RFP, be sure to keep the following questions in mind:

1. Do you know exactly what you’re asking from your potential suppliers?

As you put your requirements together, focus on what you want your vendors to do. This includes what you expect from them, especially during the bidding stage.

Be very specific and considerate when it comes to the work requirements you’re asking them to fulfill. For example, will responding to your bid mean that they are committing themselves to a free trial or otherwise obliging them to produce work for which they might not be compensated? In some circumstances, this might be a reasonable expectation. In others, it might preclude some prospective vendors from bidding.

Be mindful of the fact that, at the end of the day, this is a business transaction. You might want to ask for the sun and stars in your RFP, but there is a simple calculus at play for any potential respondent. “Does the opportunity merit the amount of work we’ll need to invest in responding to this RFP?”

2. Are you being thoughtful about deadlines?

Insightful, well-written, high-quality bids require time to create. Although you’d like to get the ball rolling on your project and get approval from your team, your suppliers need time to respond to it.

Look, we’ve talked to enough sourcing managers to know that seemingly all stakeholders want the supplier decision to have been made yesterday. But think about how much time it will really take for suppliers to submit an RFP response. Creating unnecessary pressure by establishing a less-than-reasonable deadline could force your suppliers to pass on your project simply because they are unable or unwilling to rush something out the door, particularly at the expense of quality.

True, there are instances where suppliers will bend over backwards to accommodate your needs. However, they will also appreciate a little consideration on deadlines, especially when you consider that you’re laying the foundation for your possible future working relationship if they win the project.

3. Can you make yourself available for questions and clarification?

You may think that you have given your suppliers all the information they need to create a great bid. However, engaged and highly-interested suppliers might well reach out and ask questions about your project, request clarification on certain questions or specifications, and might even delve into your objectives and goals.

If you’re not able to set aside time to answer their questions, it could lead to responses with incomplete answers or responses that don’t make sense contextually. And then you’re stuck making important decisions on incomplete or irrelevant information. Here’s the thing — you can’t really blame them for it since they’re basing their submissions on incomplete or incorrect information. In some cases, your inability to give more insight into the project might put off potential suppliers altogether.

To avoid this, keep in mind that your responsibilities don’t get put on pause during the stretch of time between issuing and scoring your RFP. The role might be more reactive than proactive, but you do have a responsibility to address questions and concerns from potential suppliers.

4. Are you able to provide a budget?

A lot of procurement teams assume that holding back on budget information can help drive competition between suppliers and therefore, deliver more value. In many cases, perhaps the majority of them, this could be true. Sharing budget information may well be tantamount to negotiating against yourself. However, in certain circumstances, it can be particularly difficult for suppliers to create a good plan for your project without at least a ballpark budget number. This is particularly true when the scope of an engagement is determined as much by price as they are by requirements. Custom software development is a good example of a project that might benefit from some disclosures around budget.

Again, this is not to say that you should share budget information willy-nilly. Be thoughtful and you feel it’s appropriate to convey some financial parameters, consider doing so.

5. Are you clear about your goals?

Any project has to have a clear goal. All too often, however, RFPs get sent out with the requirements details, but without clear objectives. For a supplier, this creates a challenging lack of context. The requirements should exist in furtherance of a goal, not exist in a vacuum.

Having objectives in place makes it easier to identify criteria that will ultimately inform your decision. This is helpful not just for suppliers, but for you — the buyer! For instance, if your objective is to launch on a specific date, then it’s clear that the winning RFP response has to include timely delivery. On the other hand, if your goal is to ensure that the project needs to be completed at a certain budget, then it’s possible the bid with the lowest cost could have an advantage.

If you want your RFP to attract and engage the best suppliers and the strongest proposals, consider these points before you send your proposal. You’ll likely see a marked difference in the volume and quality of responses.

If you have more advice on how to manage a great RFP process, we invite you to tell us about it in the comment section below. To know how Vendorful can help improve your procurement process, get in touch with us today.

eSourcing should be your top priority

4 Reasons Why eSourcing Should Be Your Top Priority

As a business, streamlining your sourcing, allows you to save time and money, build better working relationships with suppliers, and ultimately ensures the success of your procurement cycle.

However, this isn’t the easiest thing to do. Procurement teams juggle so many responsibilities that it’s easy to forget just how important sourcing is to the entire procurement process. This is precisely the reason why companies are turning to technology and embracing eSourcing as a key tool to better manage their procurement processes.

To help you make the transition to eSourcing and understand its benefits, we’ve rounded up the top 4 reasons why companies should really focus on eSourcing and make it their top priority. Check it out below:

  1. Reduces costs

Saving money is a primary KPI of efficient procurement processes. eSourcing is a good way to achieve that.

According to Aberdeen’s research, companies report an annual average savings of 16% from eSourcing. In addition, procurement teams are able to access a broad range of suppliers and review numerous bids in a streamlined and centralized way. This guarantees favorable results for businesses as it allows them to connect, screen, review, and shortlist suppliers efficiently.

  1. Improves supplier relations

eSourcing tools can help businesses conduct the bidding process in a more open and transparent manner. This essentially levels the playing field for suppliers who know that every other supplier bidding for the project has access to the same information. In addition, it helps assure suppliers that the process is being conducted fairly, and without bias.

It also makes the entire bidding process more efficient for suppliers. With a centralized eSourcing platform, they no longer have to sift through numerous documents or manually collate data from various people. A sourcing event is, in effect, like a first date. Ideally, it is the beginning of the strong, long-term professional relationship that you hope to build with your suppliers.

  1. Enables effective communication and evaluation of suppliers

The eSourcing process allows businesses to send details of the project in a centralized and streamlined way. This means suppliers can receive detailed requirements in a single eSourcing platform, as well as communicate and coordinate throughout the bidding process seamlessly. All information can also be easily accessed if necessary, reducing or eliminating protracted email chains and lengthy conference calls.

Also, when it comes to evaluating your suppliers, an automated sourcing process ensures that the evaluation process is faster and more efficient as well. You can say, “Goodbye” to the role of “Excel jockey,”Excel jockey as copying and pasting replies should be a thing of the past. Instead, you can focus your energy on the assessment itself, evaluating potential suppliers based on their ability to meet technical compliance, as well as on cost and bid quality via a single platform.

  1. Ensures time efficiencies

Anyone who has attempted to source suppliers using traditional methods knows that it takes time to find quality vendors. eSourcing helps reduce the sourcing cycle by letting you cast a wider net.

Additionally, because eSourcing lets you deliver information in a structured manner, you are almost always guaranteed that suppliers are able to submit their bids in the same format, in compliance with all your requirements. Additionally, providing standard channels of communication minimizes a lot of back and forth between stakeholders, saving time and effort.

Highly collaborative professional relationships with suppliers that contribute to a company’s growth don’t happen by accident. Effective implementation of tools to support this goal and a strong dedication to make eSourcing a top priority in your company is a significant step in the right direction.

If you want to automate and streamline your sourcing processes, find out how Vendorful can help. Get in touch with us today.

Vendors wish you knew this about RFPs

Top 5 Things Vendors Wish Businesses Knew About RFPs

As a business, you know how important it is to create quality RFPs. Good RFPs draw the best bids from vendors, foster better working relationships, and ultimately deliver better results.

To this day, however, there are a lot of assumptions, apprehensions, and misconceptions surrounding the process. So, we thought we’d gather insight straight from the vendors themselves on what it really takes to write and execute an RFP that will get you the best bids.

Here are 5 things vendors wish you knew about RFPs.

  1. The best RFPs are brief and concise

Organizations should understand that answering RFPs can be a tedious and time-consuming process for vendors. So as much as you probably want all your questions answered, you have to make a conscious effort to compress your queries into brief and concise questions. This will draw out the best and most thoughtful answers from vendors.

Shorter RFPs don’t mean the project is less of a priority for a business. In fact, brief RFPs actually reflect the time and effort your company put into writing it. We’ve been the in the shoes of vendors who have received 700-question RFPs. You open up the document and your stomach drops. There’s an internal debate about whether it’s worth investing the time. Then, if you agree to participate, you invariably get some degree of burnout as your responses go from comprehensive (in the beginning) to “just enough to check the box” (near the end). To maximize both the quality and quantity of vendor responses, remember to make your RFPs comprehensive, but not exhaustive. As the buyer, you’ll have plenty of time to dig deeper as you work your way through the process.

  1. You have to give vendors enough time to respond

If you want thoughtful responses from quality vendors, you have to give them sufficient time to respond.

RFPs aren’t the only thing that your vendors have to work on. And as important as it is to your sourcing process, it is likely just one among numerous other tasks that require their attention. Squeezing in time to create great bids along with everything else on their collective plates can prove to be difficult if they aren’t given enough time to complete it.

At the end of the day, vendors not only want to win the project but also use that as a stepping stone towards creating a lasting, long-term relationship with your organization. To do that, however, you have get past step one: the supplier selection process. By making sure that that you provide sufficient time for them to prepare their responses, you’ll increase your chances that you’ll select the supplier that is right for your organization.

  1. Don’t read too much into vendor questions…or silence

Vendors are dependent on the information that you provide. Sometimes, what’s obvious to the company itself may not be too clear to a supplier. And while you probably think that the context you’ve provided and the phrasing of your questions are enough for vendors to deliver a great bid, there will be times that they may need to reach out for additional information.

Do not assume that this is a sign that they’re doing a bad job. It is not a reflection of a vendor’s inability to grasp a particular request. In fact, doing so shows their engagement, interest, and dedication to getting the job done right. As a rule of thumb, you can put vendors’ minds at ease by having a Q&A period. The easiest way to do this is typically to set up a deadline by which all of the vendors have to submit their questions. When you respond, take care to broadcast clarifications and explanations to all of the vendors — whether they submitted questions or not — to make sure that all respondents have access to the same information.

  1. Be careful of what you are inadvertently communicating to vendors

There are certain things that you could be unknowingly communicating to vendors. The most critical one being that they have no chance of winning your RFP.

When buyers are slow to respond, especially when it comes to questions pertaining to RFP, or do not easily accommodate vendor requests for feedback/clarification, it can be discouraging and reduce the likelihood that the vendor invests time into submitting a strong proposal.

Similarly, the actual questionnaire can dissuade a strong supplier from participating in the bidding process. For example, imagine a company created an RFP questionnaire that focuses extensively on operating history, customer list, and profits, but for whom those things were tertiary considerations behind quality of the offering and price. Absent the broader context of knowing how those things stack up, a startup might assume that it has no chance at winning the deal, given its relatively short history and opt to invest its time elsewhere, rather than submitting a bid. By being thoughtful about what and how you communicate, you improve the odds of a strong outcome.

  1. Vendors know it’s not just about cost (but it doesn’t hurt to reassure them)

There’s a generally-held belief that vendors are apprehensive about bidding on RFPs because they know it’s a numbers game. The assumption is, the lowest bid always wins.

This isn’t necessarily true. Businesses use RFPs as part of their sourcing process because they want to manage cost and at the same time, ensure quality, maximize alignment, develop a strategic rationales, and more. Vendors know this. They also know that the lowest bid isn’t always the best option. Striking the right balance is the responsibility of the buyer and by clearly conveying the criteria, buyers better equip vendors to submit strong bids.

One last thing…

If you want the best vendors to bid and engage with your RFP, you have to make it easy for them to do so. You want to minimize the amount of work that they must do that are, in effect, unrelated to your bid. So unless otherwise required by statute or unbending policy, try to avoid asking to do certain things like printing and physically delivering the bid to your office, or requiring them to utilize slow, clunky tools, or submit the reply with smoke signals.

This is yet another the reason why you should consider an end-to-end intuitive and reliable RFP management software to streamline the entire sourcing process; enabling seamless collaboration (and enthusiastic participation) among and between key stakeholders.

Keep these things in mind when crafting your next RFP and you’ll see the difference in the responses, your options, and your ROI. If you have experience creating RFPs and have more to add to this list, please feel free to share it with us in the comment section below.

To find out how Vendorful can help ensure you and your suppliers take advantage of the benefits of eSourcing, get in touch with us today.

eSourcing benefits buyers and suppliers

5 Benefits of eSourcing for Both Purchasers and Suppliers

The benefits of eSourcing may be clear for buyers, but streamlining the procurement process tends to be met warily by vendors. The apprehension stems from the impression that any level of process automation commoditizes their products and services, and that eSourcing platforms are largely one-sided in favor of the purchaser.

The fact is, however, that eSourcing platforms can facilitate real-time dynamic feedback and foster strategic communication so that it becomes a valuable tool for both purchasers and suppliers.

Here are some of the top advantages of eSourcing:

1. Unparalleled transparency through technology

Most eSourcing platforms are capable of providing real-time feedback via analytics tools and itemized ranking. This means that not only do buyers enjoy a big picture view of where all their suppliers stand and what they have to offer, but suppliers also get unprecedented competitive intelligence. Insight into what competitors are e.g. bidding in reverse auctions puts a supplier’s own pricing strategy into a clearer perspective.

2. Levels the playing field for all suppliers

eSourcing platforms ensure that all suppliers have equal access to the same information from the buyer. This promotes fair play among all participants and guarantees that everyone is able to see the same questions and answers. On the flip side, removing bias from the procurement process ensures that purchasers get the best possible bids and options from suppliers.

3. Improves trust between suppliers and develops relationships

Here’s how the typical procurement process works when done manually. Purchasers will start by briefing multiple suppliers on the details of their inquiry. From there, a supplier will come back to the purchaser with an offer. In order to negotiate the bids from all suppliers, purchasers will typically present the pricing offered by supplier A to supplier B (or vice versa).

The whole process is quite tedious and tends to foster an adversarial relationship between purchasers and suppliers. While purchasers may end up with their desired bids, suppliers may end up feeling shortchanged. This isn’t a great way to start a working relationship.

This is something that eSourcing handles easily. It’s the market that drives the price and because it’s out in the open, it can’t be pinned on a specific supplier or the purchaser’s negotiation skills.

4. Saves time for all parties involved

There’s a lot of back and forth when it comes to the procurement process. Briefings alone can take up hours — if not days — out of already busy schedules. And that’s excluding any negotiations.

Allowing both purchasers and suppliers to access standard templates and collaborate via a central system accessible to all relevant stakeholders can drastically streamline the process for everyone.

5. Offers more business opportunities

eSourcing platforms not only ensure that purchasers achieve operational efficiency, but also offer ease of use to suppliers as well. Once they familiarize themselves with how the platform works, it’s now easier for them to join bids for your company and win potential business.

One last note…

While software-enabled procurement is anchored in the same basic concepts of more manual processes, shifting to a digital platform will require some process changes for everyone involved. Both purchasers and suppliers will undoubtedly reap benefits from a high-quality strategic sourcing platform, but it will require a commitment to changing old habits and processes for eSourcing to truly shine in your organization.

Educate yourself and your suppliers so that key stakeholders in your organization can develop a positive view of eSourcing, understand what it can do for you, and start leveraging its benefits. If you have any experience with using eSourcing platforms, we’d love to hear all about it. Leave a comment below.

Talk to us to find out how Vendorful can help ensure you and your suppliers take advantage of the benefits of eSourcing. Get in touch with us today.

A great RFP attracts great proposals

7 Ways to Create Effective RFPs to Attract the Best Proposals

For business-savvy organizations, requests for proposal (RFPs) aren’t just simple procurement tactics. To them, each RFP represents an opportunity to drive value by engaging both future partners and stakeholders.

Writing a strong and effective RFP is a key driver to bring in great proposals that ultimately lead to strong vendor relationships. Conceptually, it’s simply. Great RFP leads to great supplier participation and better evaluation criteria. Then, you’re in a position to evaluate an optimally broad pool of responses along the specific dimensions that matter to your company. But while this is conceptually easy, putting it into practice requires work. So how do you develop a powerhouse team that consistently delivers great RFPs?

Here are 7 tips on how to write a good RFP:

1. Focus on creating a great executive summary

Everyone knows that you shouldn’t judge a book by its cover. On the other hand, when your RFP is stacked along with dozens of others, you can basically expect the recipients of your RFPs to judge them within the first page. You need your prospective providers to be engaged to maximize the chances of their participating. This is one reason why paying more attention to your executive summary should be a key priority.

The executive summary should clearly convey the scope of your organization’s needs and underscore the opportunity for the chosen supplier. While your RFP is not a marketing document per se, You want it to make it compelling, and at the same time, provide ample information about your company and project.

2. Be brief and keep it simple

One of the biggest challenges in the RFP process is trying to create a proposal that isn’t peppered with jargon and buzzwords to muddle the message.  And when it involves pages upon pages of seemingly irrelevant questions to be addressed, it might actually just put the vendor off. (Not to mention that a meandering or overdone RFP will be much more time-consuming to run and difficult to evaluate.) With this in mind, remember that it’s important for RFPs to be carefully crafted so that it draws quality proposals.

If you are seeking quality responses, then you’re well served by being succinct. Instead of taking the “more is the better” route, keep your document brief and focus on your objectives, without a lot of deviation.

3. Cover all your bases

Write your request for proposal with the goal that none of your key questions will be left unanswered, i.e., make sure that you are able to narrow down your list of prospective providers based on responses to your questionnaire. When your team and stakeholders sit down to do the evaluation, you want them to be scoring targeted, well-defined answers provided by the vendors.

4. Clarify your objectives and evaluation criteria

The RFP is a step towards achieving a business goal — it must fulfill a purpose. Don’t lose sight of that while writing your RFP. Otherwise, the proposals you receive risk not meeting your objectives. Before you even begin drafting the request, make sure you conduct an internal discovery process to understand and differentiate between the needs and wants of the stakeholders. In addition, it can be useful to share the RFP with stakeholders before sending it out to suppliers. This way, you can determine whether you are on target by testing it internally. If your colleagues are confused, it’s likely that your vendors will be too. If that’s the case, reevaluate and make the necessary adjustments to ensure your RFP is clear and focused.

5. Take care when using copy and paste

Thoughtlessly copying and pasting an RFP in its entirety and submitting it to vendors is rarely a good idea. You might have a foundation of content or template to get you started, but keep in mind that effective RFPs are customized and tailored to fit specific business needs. Think of a template — or a previous RFP with content that you can leverage — as the equivalent of a running start. It should help you get to the finish line faster, but not excuse you from running the race.

6. Proofread your document

Typos and grammatical errors in your RFP do nothing to communicate the professionalism and credibility of your organization. If you want to receive quality proposals, then you’ll help yourself by paying attention to the little details that exhibit a strong focus on quality.

7. Ask thoughtful, constructive questions

You want your RFP to draw actionable data from the responses of potential vendors. To achieve this, avoid stock questions unless the answers to them will provide meaningful insights in your evaluation process. Bear in mind that the goal is to generate responses that highlight a vendor’s capabilities as they specifically relate to your wants and requirements. Investing time to ensure that your RFP questionnaire is up to snuff should certainly pay dividends.

Did we cover everything? If you have experience writing RFPs and have more tips to share, feel free to tell us all about it below.

The RFP process is critical for businesses who want to attract suppliers that are best suited to meet their business goals. The process can be tedious, but technology now allows companies to automate much of the process. For a comprehensive explanation on how Vendorful can help you write better RFPs and drive quality responses,get in touch with us today.

Strategic Sourcing: RFP Mistakes

4 Top Common Sourcing RFP Mistakes

One of the more common tasks of companies undertaking a new sourcing project is issuing RFPs. Sometimes, the RFP drafting process is viewed as a relatively minor part of the entire project rather than being treated with the same degree of care as other aspects like scoring/evaluating. A thoughtful, well-considered RFP is a key stepping stone on the path to adding to or updating your vendor portfolio. Giving it short shrift, on the other hand, could have the opposite effect and negatively impact the company’s growth, profitability, and efficiency.

Here are four common sourcing RFP mistakes:

Mistake #1: Lazy Discovery

The overall success of a sourcing event depends on deftly handling every aspect of it, including the RFP. Too often, the list of possible providers is organized based on simple web searches and anecdotal information. Failure to devote adequate time and effort to the discovery process has the potential to jeopardize the entire project from the start.

Indeed, while maximizing “discoverability” through SEO and PR are two important areas of investment for many vendors, smart buyers are rewarded for doing deeper research rather than relying on what pops up on the first page of a web search. The number of prospective providers that should be invited to submit RFP responses depends on a variety of factors including, but not limited to, the category in question, the projected spend on the product/service, and the timeline for a purchase. As such, the line between running a sourcing event that is competitive and one that is unnecessarily onerous is not fixed in place. Buyers should look to generate a large list of prospective vendors and then narrow the field based on criteria that can be evaluated through research. (An RFI is often a useful tactic here as well.) This not only helps the sourcing team find the competitive sweet spot, but also is a good way to understand the marketplace. Ultimately, if you’re a buyer, you want to be selecting from several good options, which means the steps you took to generate your list of prospective suppliers is extremely important.

Mistake #2: Beginning the RFP Too Early

There’s a famous expression that underscores the importance of preparation: “Measure twice and cut once.” In a heavily connected digital world where so many of us have come to expect instant gratification, slowing down can feel unnatural. This can be compounded by colleagues and managers who want particular goods and services selected and delivered yesterday. Take a breath and remember that while an increasing number of organizations are adopting “strategic sourcing” practices, none that we’ve heard of are investing in a “tactical sourcing” strategy.

We’ve made the argument before that, for some, the RFP is really CYA. But think about it —  do you want to issue an RFP to identify the best supplier or to have plausible deniability? (If the latter is your answer, you might want to reconsider your motivations or your employer.) The task of actually writing the RFP should only start once the strategy and requirements have been finalized and the project roadmap developed. Get buy-in from stakeholders as they are ultimately the ones who will benefit (or suffer) from the end result of the sourcing event. In case you need reminding, having strategic sourcing systems that don’t communicate is bad. Once you have established the criteria, requirements, etc. and have gotten the “go-ahead” from your stakeholders, you’re ready to move forward with your RFP.

Mistake #3: Taking a Cookie Cutter Approach

Cookie cutters are great…for making cookies with particular shapes. Unfortunately, they don’t work so well with RFPs. The problem is that when you indiscriminately repurpose content and criteria from other (potentially unrelated) events, you risk getting the right answer to the wrong question. his doesn’t leave you in a strong position to draw conclusions.

It is important for the RFP to have enough specificity to inform the decision-making process.. Repurposing previous RFPs may seem like it’s an expedient way to proceed, which can be appealing if you’re under time pressure. However, thoughtlessly doing so almost invariably increases the odds of a bad outcome, which can be extremely costly in the long run.

Mistake #4: Picking a Winner before You Start

Perhaps this should have been first on our list as it’s the absolute definitive cardinal sin of sourcing. When you have essentially decided on which supplier will be awarded the contract before you’ve even run the sourcing event, it doesn’t matter how much time and care you invest into the RFP, it will have been wasted time. How does this even happen? There are probably a variety of reasons, but we’ve uncovered two scenarios that are particularly common.

  1. Stakeholders have run a shadow sourcing process and only include procurement after the decision has effectively been made. Procurement then faces a tremendous amount of pressure to justify the selection of the vendor or risk the wrath of the stakeholders. This is especially likely to happen with renewals, when there is an incumbent provider.
  2. The team responsible for sourcing a particular product or service feels like the risk of selecting any vendor, but the industry standard, exposes them to risk. While the competitors might offer rock-solid representations and aggressive pricing, the perceived cost of failure might undermine those benefits. This is actually not an unreasonable posture, but should be contemplated inside the RFP by expressing the concerns in the content of the RFP and weighting the responses appropriately.

Vendorful understands the importance of well organized, accurate, and effective RFPs. Our eSourcing platform is user friendly, regularly updated, and built to integrate with other systems.

Contact Vendorful to discover how we can assist you in the sourcing process, your first project is on us.

Deconstructing 4 of the Top eSourcing Myths

Hercules is a mythological. eSourcing? Not so much.

For a lot of businesses, a well-considered and thoughtfully-implemented eSourcing strategy could offer numerous benefits. Increasing sourcing efficiency, bringing down overhead costs, and improving supplier relationships are just some concrete examples. Given that, it’s almost surprising that businesses are all too willing to overlook these advantages due to certain eSourcing myths.

(Thanks, Charles Le Brun for the great Hercules painting! Greek myths…now, those are interesting.)

To address this, we’ve collected four of the top myths about eSourcing in order for you to understand the real value of eSourcing to a business. Hopefully, identifying these pervasive misconceptions about eSourcing will show you how it really works, lead you to informed decisions, and ensure your company has a reliable sourcing strategy.

Myth 1: My category can’t be eSourced

You might think your category is too specific or complex for eSourcing. The truth is, any spend category that you traditionally source using an RFI or RFP process can be eSourced, as long as

  1. your category has a set of definable requirements and
  2. suppliers can evaluate how they can meet the aforementioned requirements

In fact, choosing to automate your workflows via an eSourcing tool means you are able to follow best practices, implementing more stringent buyer guidelines and ensuring more accurate responses from suppliers. Take out your notebook (or simply download what we’ve compiled) and learn the RFP process steps.

Essential Guide to the RFP Process

Myth 2: eSourcing is only about the money

Many organizations assume that eSourcing is only ideal when price is not only a priority, but in fact the only consideration. However, good eSourcing solutions are built to support and provide solutions that go beyond simply cost. They are specifically designed to capture and gather bid information in a streamlined and centralized way to allow thorough and expeditious analysis. Such features can be used to both quantitatively and qualitatively evaluate bids on total value, rather than simply defaulting to the lowest price.

Myth 3: You can’t use eSourcing with trading partners or existing suppliers

Every supplier wants their customers to be customers for life. It’s therefore understandable to expect that some of your current suppliers might feel threatened when they are invited to participate in an eSourcing event. You can reassure them that simply because they are being asked to participate in a competitive sourcing process doesn’t necessarily mean that you’ll be making a change. Moreover, a robust eSourcing tool should provide value for suppliers as well as buyers. Indeed, after dealing with messy inboxes and collating data into different documents, suppliers may well be relieved to use a platform that supports collaboration, consolidates information, and more.

Myth 4: My company is too small for eSourcing

It’s possible, but we doubt it. Today’s tech-centric business landscape demands efficient solutions that will address business needs—regardless of size. Many of the newer eSourcing tools are also subscription based and scalable depending on a company’s needs. Such features actually make eSourcing more affordable and generate a better return on investment, particularly when compared with doing things “the old-fashioned way.”.

While eSourcing must have a strong ROI story and commercial rationale, it is strictly focused on helping organizations squeeze the last pennies out of potential vendors. There is a broader value story at play here. A good platform should enable you to  define and implement better processes that will benefit your business in the long term. Opting to implement an eSourcing solution will help you create a better, more transparent and scalable process for stakeholders as well as the organization at large.

Can you think of more eSourcing myths that weren’t tackled here? Feel free to add any to the comments section below.

For a comprehensive explanation on how Vendorful can help you respond to RFPs and ensure consistent value, get in touch with us today.

4 Biggest Challenges in Your RFP Process

Procurement teams face a number of challenges as companies take an increasingly critical look at their processes in the hopes of producing more value. It might not surprise anyone that the value-driving RFP process is still regularly met with resistance from departments outside of procurement. Even procurement teams have been known to push back, describing the process as too time-consuming and antiquated. Sourcing professionals know that RFPs are critical components of well-run procurement practice, but pressure — both external and internal —  can result in teams’ skirting or completely abandoning the process altogether. The risks are significant as the organization is far more likely to be dealing with the consequences of an ensemble of mismatched services and low-value purchases as a result. Here are the 4 of the biggest challenges facing your Request for Proposal process today.

  1. Costly RFPs – Even if one ignores the common gripes about RFPs taking too much expertise and being an arduous process, there’s the very real issue that some companies are running RFPs that cost more than they are worth. If the cost to run an RFP for a $300,000 purchase is $50,000, you’re going to have a very difficult time proving to your company that you can justify the cost of the sourcing event. There are a number of different factors that lead to expensive RFP processes, but the most important thing is to understand how much you are spending on procurement process flow. From there, you can identify what conditions need to change for your RFPs to become the value-driving tool that they are supposed to be. Otherwise, if the process itself is too costly, it undermines the rationale for leveraging the RFP for strategic purchasing decisions.
  2. Lack of Internal Expertise Think of an RFP like a polygraph test; it’s only useful if you ask the right questions. If your team isn’t establishing relevant questions, appropriate evaluation criteria, and a painless way for internal stakeholders to communicate then there’s a good chance that you won’t see value from your RFPs. A lack of internal expertise can lead to suboptimal outcomes. There might not be an easy fix; not even an organization has category managers and there is a natural information asymmetry between buyers and sellers, but this concern can only be addressed if you are aware of it.
  3. Communication between Stakeholders – With mounting pressure to make today’s decisions yesterday, a sourcing process that — by design — prevents impulse buys is bound to frustrate some. Billowing email chains, interminable conference calls, and answering the same questions over-and-over causes massive frustration on both sides of an RFP. Examples of critical communication checkpoints in an RFP include developing clear objectives, evaluating the competing proposals, and having specific evaluation criteria. Fortunately, many of the problems people have with RFPs can be solved with streamlined communication… which also has the added benefit of directly reducing the cost to run RFPs.
  4. Vendors Refusing to Respond – When you’re a Fortune 500 company, you can ask suppliers to respond to an RFP via smoke signals and the odds are decent that you will receive multiple proposals. However, when the perceived stakes for suppliers are lower, some may not even want to respond. Much of the frustration experienced by buyers is mirrored by vendors. The vendor procurement process shouldn’t be managed manually, but the reality is that it’s difficult for sales professionals to commit to spending both their own time and the time of internal subject-matter experts, responding to a lengthy RFP that is being sent out to a number of competing vendors. From the perspective of a sales department, dealing with RFPs is a necessary evil. Most salespeople would prefer to invest their time in developing relationships with prospects — not filling out forms. The relationship between buyer and prospective supplier is important, but should not, on its own, dictate how a contract is awarded. To maximize the odds that vendors respond to your RFP, offer them an experience with streamlined communication, collaboration, and more. If you make the RFP response process better for them, you are more likely to have strong competitive bids for your business.

I’m fond of the expression, “The road to hell is paved with good intentions.” Such is the case with the RFP. The intention is clear — optimize supplier selection. But the road to get there can be riddled with potholes and distracted drivers. Here’s the good news. These challenges can be addressed quite easily. By recognizing and then eliminating the frustrations that others have with the RFP process, you can drive increased engagement by stakeholders and suppliers alike, improving the quality of your outcomes.

Learn more about effective RFPs in our Essential Guide to Understanding the RFP Process.

Essential RFP Checklist

Essential Tips for Every Stage of Your RFP Process

It’s easy to get lost in a sourcing event. In addition to making sure you nail each step of the RFP process flow itself, you’re also trying to wrangle data, vendors, and internal teams across a variety of communication and management platforms — none of which seem to speak to each other. There is an understandable temptation, and sometimes even pressure, to cut corners for expediency’s sake, but you’re fully aware that cutting corners will lead to a less-than-ideal outcome. While for some organizations, the RFP has devolved into a box to be checked, top sourcing professionals understand the value of running a high-integrity, rigorous process. Below, we’ve put together a list of RFP process steps and tips to keep your team on track, and maybe even show you some things you didn’t know were missing. Read more

RFP planning meeting

3 Teams That Benefit from RFP Management Software

Procurement doesn’t work in a tidy bubble; everything the team does is both influenced and catalyzed by the needs of other departments. Any improvement to the procurement team has a positive impact across every department that spends money. And if you have any departments that aren’t spending money… well… give us a call, we’d love to learn how they do it.

RFP planning meeting

One procurement process is universally regarded with dread across every department: RFPs. Yet, RFP library management systems, when done right, remain one of the most effective sourcing processes. One sure way to improve the RFP process for everyone, is to use RFP management software.

Here are three teams outside of procurement that can benefit most from RFP management software:

Marketing – According to a survey by search marketing platform Conductor, 30% of marketing executives surveyed say they plan on increasing their marketing technology spend by 11 to 25 percent, with 70% of respondents saying they plan to increase their spend in general. MarTech spend goes through the marketing department of most firms, but it is similar, in some ways, to IT spend. While managing IT spend is quite frequently tied to the procurement department, marketing departments often have a lot more freedom to control their own spend. This may work well for media buying, but it will inevitably harm marketing departments when they try to source technology. After all, there is typically a strong rationale for having procurement involved in sourcing and spend management. The more spend procurement has under management, and the more streamlined the communication between marketing and procurement becomes, the more value the company will obtain from purchased products and services.

One of the largest complaints from any department about running sourcing events through procurement is the amount of time it takes to bring on new technology. MarTech is no exception, but running purchasing events outside of procurement can create some costly errors in the long run. How, then, do we bridge the gap between what may seem to be conflicting interests? Expediency, in the case of the marketing department. Thoroughness and savings maximization for procurement. RFP management software creates quick and natural avenues for direct communication between marketing and procurement. In addition, the capabilities of a strong platform enable procurement to run effective sourcing events while satisfying the needs of marketing in getting to the finish line expeditiously.

Human Resources – There’s no denying that HR IT spend is on the rise. With recent turnover numbers climbing, companies are searching for better ways to manage talent, recruit, and implement analytics into HR strategy. A study conducted by Towers Watson reveals that one in three companies plans to overhaul its HR structure to improve quality. HR is being pushed to invest in solutions that they didn’t necessarily ask for, which is putting pressure on HR to deliver results while requiring procurement to bridge the knowledge gap. HR IT spend is generally separate from IT spend, much in the same way that MarTech is. At issue is not simply managing implementation and integration across different systems, but also the financial impact of managing spend on similar areas across multiple departments. In many ways, disjointed spending across multiple departments defeats the original purpose of procurement, which aims to increase the value and fit of purchased goods and services while reducing the burden of that process on other departments.

Unlike an R&D group, HR departments tend to be less focused on rapid iterations of technology, and more interested in finding the right long-term solution for the job. RFP management software enables procurement departments to get the information they need from the HR department, while limiting the amount of work HR staff needs to commit to the RFP. Instead of starting an RFP and figuring out halfway through the process that the sourcing team has the wrong requirements, the HR department and the procurement department can plan the RFP together with specialized tools designed to help teams coordinate requirements.

Information Technology – At this point, you may be wondering if IT has anything left to manage. Maybe it’s time for the folks in the IT department to kick back, grab some mai tais, and let the rhythm of steel pan drums wash over their minds. After all, if IT isn’t taking care of MarTech or HR technology, what is it really doing?

Managing. Every. Other. Piece. Of. Technology.

Information Technology management for a large corporation is a daunting task, and as software and strategy are constantly changing, IT and procurement must be in constant communication. While these departments may be used to working together, the lines of communication and differences in process orientation present material challenges. The term (and sales tactic) “Shadow IT” exists for a reason. As a rule, IT teams are more solution focused than process focused. So rather than viewing the RFP as a tool, they view it as an encumbrance — perhaps a necessary evil for large projects and an “avoid-at-all-costs process” for smaller ones. And it’s worth noting that “all costs,” when broken down, can be quite a bit more than one imagines.

In larger organizations, IT departments are all too familiar with procurement. To the heads of these departments, interaction with procurement is not a one-off engagement, but rather, a continual process as IT is focused on continued maintenance and upgrades. RFP management software drastically reduces the amount of time it takes to run similar RFPs while maximizing value and driving down cost.

The Bottom Line

When it comes down to it, RFP management software helps many more teams than just procurement. Running RFP management tools with unspecialized software like spreadsheets and email can turn the whole process into a disaster of communication chains, lost attachments, and redundant processes. We can’t blame departments that neglect procurement best practices in favor of speed and sanity, but we also can’t condone the extra spend. 

After all, skipping well-orchestrated sourcing processes greatly increase the likelihood of bad outcomes, from paying too much to purchasing the wrong technology altogether. We have all seen examples of expensive technology going to waste because it wasn’t the right fit for the department. With RFP management software, you can streamline communication between procurement and other departments, reduce the amount of time non-procurement teams need to spend to run RFPs, and generate warm-and-fuzzy feelings inter-departmentally.

See how you can give departments more autonomy without driving procurement crazy. Schedule a demo of RFP management software.