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!

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.

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

Complex Purchase Processes

3 Enterprise Purchases That Use a Complex Procurement Process

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

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

Challenging Purchase #1- Broad Swath of Stakeholders

Converting your company from Windows to OS X

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

Challenging Purchase #2 – Components up the Wazoo

Windmill Turbines

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

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

Outsourced Redesign of the Coca-Cola Logo

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

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

They Are Possible, But They Are Painful

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

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

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

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

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