Four Keys to A Successful RFP That Too Many Firms Ignore
It’s no secret that when a company is looking to solicit bids for a project, opening up a Request for Proposal (RFP) offers a simplified, standardized, and centralized means to compare diverse bidders. A well-crafted RFP separates the best-fit from the less qualified. A poorly executed request, on the other hand, will shut out even the most qualified providers before they have a chance to shine.
Whether you are judging candidates or filling out the request itself, the RFP has benefitted from its fair share of innovation over the years. As 2014 ends and 2015 picks up, there are a variety of RFP trends that are sure to shake up the RFP process in the new year.
1. Cut and Paste is Getting You Nowhere
When an RFP presents a question that suppliers think can be addressed through stock content, buyers should think twice about their reason for asking the question. Instances of “copy and paste” are obvious, and are often ignored by buyers and stakeholder teams alike. According to IT Web’s Terry White, “To score well, a response must solve the customer's specific problem. Customers spend enough time discussing themselves in the ‘challenges', ‘reason for this RFP', and ‘current situation' sections of the RFP.” In order for suppliers to distinguish themselves, each answer must address the project’s specific challenges. Procurement’s job is to ask questions that push suppliers to dig deep and provide unique responses.
2. Weights are Suddenly Shifting
While evaluating RFPs, sourcing teams are taking a new approach to representing the significance of hard and soft results. Hard solutions, including skills, relevant experience, and proprietary tools, are being commonly weighted 60%. Soft components, involving abilities to adapt to new trends and technologies and pressure to cut costs, are being weighted 40%. This trend is indicative of the recognition that soft points serve as an area where prospective suppliers can present unique offerings and value creation opportunities. In many well-crafted RFPs hard solutions don’t allow much differentiation because procurement has worked so hard to detail required specifications. Procurement must help their stakeholder team to balance soft and hard solutions in the negotiation and award process.
3. Recognizing the Importance of Living Contracts and Delivery Assurance is Key
Since soft deliverables such as account management, price visibility, thought leadership, continuous improvement, and strategic input are difficult to document in a static contract, they create the need for procurement to support a “living document.” Active management of contracts becomes a significant portion of each buyer/supplier relationship’s success and the goals associated with the engagement. When suppliers recognize the importance of collaborative obligations, they can prove themselves to be a proactive partner, worthy of far more than just transactional management by procurement.
4. Notice how markets are shifting based on a commodity
Although the practice of monitoring trends has always been advised in the management of contracts, market trends should be reflected in the RFP process as well. Plastic packaging RFPs are heavily tied to resin commodity trends, just as office supplies RFPs depend on pulp and paper indexes. With shifting markets and commodities, it is essential to ask questions about how prices are indexed for trends within the specific commodity procurement is sourcing. For professional services sourcing, it is important to be attentive toward increases in competition to give you leverage in negotiations and more qualified options based on market developments and current employment rates.
The importance of a fine-tuned RFP to a successful engagement makes it essential that each organization (whether responding or creating the event) react in a way that is aligned with current trends. The next time you begin to handle an RFP for your organization, be sure to keep in mind these tips to stay on top of the game.