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.
Before you even begin your RFP process flow, there are several steps that merit consideration, and that, if skipped, can result in bad outcomes. A small investment in the following actions can return big results.
1. Determine whether your stakeholders actually need the product.
This may sound rudimentary or even ridiculous, but we have all seen unused products floating around a department. I’ve been part of sourcing events where we go through a protracted dog and pony show only to tell the prospective suppliers, “Upon further reflection, we don’t actually need a solution like this right now.” (To be clear, I didn’t run these events and don’t want to be painted as culpable for having wasted someone’s time!) But the larger point remains — you should figure out if there is an actual need before determining requirements.
2. Determine a timeline.
Not setting a timeline and specific deadlines for an RFP is actually quite common. Those who are reticent to impose time constraints would be well served to remember Parkinson’s Law, which states, “work expands so as to fill the time available for its completion.” The problem with not creating deadlines is that even a pretty straightforward RFP can stretch for months and cost a ton of money. And it is important to focus on the “work expands” part of the law. Stakeholders don’t stop devoting time to the RFP because there is no urgency. Rather, they spend a lot more time but are likely to do so a lot less efficiently.
3. Set requirements and lock-in agreement.
All too often, the requirements of a product and service are subject to vigorous debate after the RFP is running. Clearly, the best time for establishing requirements for an RFP is before the RFP is sent to vendors. Without a strong understanding of what’s needed, building an effective questionnaire and inviting the right suppliers to respond turns into a crapshoot. And when hundreds of thousands or millions of dollars are on the line, you want to turn the game in your favor. Rolling the dice and trusting Lady Luck is not a commercially sustainable strategy. Once requirements have been established, make sure that all your stakeholders are on board. Ensuring that everyone has signed off on the requirements will save you and your team time and sanity.
Running the RFP
If you’re new to running RFPs, be prepared to watch your “Inbox Zero” efforts be undermined. Most organizations still rely primarily on email as a communication vehicle — for both internal and external communication — when they run sourcing events. Suppliers are going to send questions, RFP responses, and attachments relating to responses. At the same time, stakeholders are flooding your inbox, and you, theirs, with meeting notes, requirements documents, and more. Wrangling this information takes a surprising amount of time, as does putting it into a format where vendors can be compared on an apples-to-apples basis.
1. Keep what you want and why you want it front and center.
Addenda and revisions are sometimes sent after the request has been issued, but these often serve to complicate the process for all parties. Keep the flow, if not the number, of documents to a minimum, and make sure the RFP you send is the final version.
2. Don’t limit your vendor choices too much.
The point of an RFP is to find the best solution to your need at the best value. If you only focus on your preferred suppliers, then your team might miss the point. Don’t sink your RFP by limiting participation to a select few. Allow at least a few wildcards, within reason, to participate in case they have something that fits your need perfectly.
3. Set a deadline for fielding vendor questions.
As soon as you send your RFP to vendors, you’re going to start to receive questions. It’s important to set a deadline for supplier questions to allow your team time to answer. Keep track of which questions are supplier-specific, and which apply to all the companies that are bidding for your business. When you respond, it’s critical that answers to widely-asked questions are sent to all participants, not just those that issued the question. The goal is to make sure that there is a level playing field and that all parties have access to the same information. Yes, if you’re using email as your main communication tool, you might grow to resent your inbox, but sourcing the right solution is worth it.
The RFP responses are in, and now the real fun begins. Your team has to sort through responses to find the winner, or the final contestants, that best suit your needs. Scoring is a delicate and lengthy process, and there’s plenty of room for accidental error.
1. Score the responses by question, not by the vendor.
We’ve discovered that many organizations that rely on the document and/or spreadsheet files evaluate vendor responses one at a time. Imagine a stack of papers, each one a response. Then imagine taking the first paper off the stack, scoring it, and moving on to the next paper until you’re done. Regrettably, this is all too common. And it creates a big problem. The context in which any response should be evaluated is the question or requirement. If you are simply going through a single respondent’s bid, you get a general, but not a specific sense of the merits of the bid. On the other hand, if you are able to look at the question you posed and then evaluate all the responses to that specific question, side by side, you can evaluate the candidates’ strengths and weaknesses with tremendous specificity. Ironically enough, the stack of papers approach makes it difficult to understand how suppliers stack up against each other.
2. Gather your attachments.
There’s going to be quite a few attachments floating around in your inbox and it’s easy to lose a few in the process. Trust me, we know. And things get particularly frustrating when you’re scoring question 18 and for the life of you, you can’t find the document to which the vendor is referring. If you’re not using a good e-sourcing tool, then you should implement a system by which supporting documentation submitted by suppliers are easily associated with their questionnaire responses.
3. Blind score your responses.
If you aren’t already, you should try to implement blind scoring when it comes to evaluating your supplier responses. Bias can ruin an otherwise thoughtful sourcing process, and it’s important to evaluate responses based on how well the responses meet your needs.
4. Award the contract, negotiate, or start the run-off process.
At the end of the process, you’ll hopefully award a supplier with a contract. However, it’s likely that you’ll have to negotiate between multiple suppliers, or even have a mini-RFP as a run-off between suppliers. Keep in mind that the mission is to find the right solution for your needs, so don’t shy away from a little more process to make the right choice.
Keep the goal in sight, and do your due diligence to make sure that the time you spend on the sourcing process culminates in the right choice of suppliers. And when you’re feeling frustrated by the process, remember the ironic lyrics of George Harrison’s homage to single-sourced events:
It’s gonna take time
A whole lot of precious time
It’s gonna take patience and time, mmm
To do it, to do it, to do it, to do it, to do it
To do it right, child
Want a more in-depth explanation of how to run RFPs in a way that drives consistent value? Check out our Essential Guide to Understanding the RFP Process.