• Michael Otis

10 Tips to Run Your Next RFP Like a Pro

RFPs can be a nightmare. Those three letters alone will raise your blood pressure. I know mine spiked just typing them. From pulling together a slew of files to interfacing with vendors to performing the final analysis, each step of the process produces its own challenges and headaches.


While administering an RFP may never be a particularly pleasant experience, there are a few things we can do to make them run a little more smoothly.

At the risk of suggesting that I’m a special snowflake, I have a bit of a unique perspective here. I’ve spent most of my procurement career in broker model businesses (i.e. multi-sided marketplaces). Instead of existing on either the buy side or the sell side of proposals, we inherently played in both sandboxes. We were a potential vendor for the ultimate customer, but we would also run our own RFPs for our network of vendors.

Consistently participating as both a supplier and a customer proved to be an ideal environment for learning how to run an RFP. I saw some things done well and many others done poorly – often by some of the biggest companies in the world. But, when those mistakes were made, the impact extended beyond just the administrator of the RFP. All stakeholders and participants were affected. A mistake at the top quickly cascaded through the entire process.

So, in an effort to mitigate the inevitable RFP headaches, I want to share my lessons learned for running effective RFPs…

1. Set Clear Goals

Start by gathering all stakeholders and aligning on your desired outcomes.

A few questions to get started:

  • What lessons can you take away from your past RFPs?

  • Do you have specific cost targets or budget constraints that take priority over other factors?

  • Are there prerequisite criteria that a potential vendor must meet?

  • To what extent do you value a long-term vendor relationship vs. pushing for lowest cost?

  • How will you measure results and define success?

As you review the questions, consider (1) the roles each of the stakeholders will play and (2) what framework will be used to select a winning bidder.


2. Get Vendor Input before Your Distribute

I was fortunate enough to lead procurement organizations that participated in several national RFPs each month. Strikingly, nearly every one of those potential customers realized they made a significant mistake only after they distributed the request to dozens of vendors. And we’re not talking small mom-and-pops here. We’re talking Fortune 100 companies.

What was most frustrating though was that, for any industry expert, the mistakes were so glaring that they leapt off the page. A 20-minute conversation with any of the participating vendors would have steered the RFP owner in the right direction and evaded looming disaster.

Instead, over 75% of these major RFPs were scrapped and redone months later. Their initial efforts became a drastic waste of time, energy, and resources.

So, don’t be afraid to solicit input from a few vendors before you send out your RFP. They’ll be more than willing to help. A better RFP makes their lives easier too. Besides, this is a great opportunity to start building valuable vendor relationships.

Some questions to ask:

  • Any feedback on the RFP structure or file formats?

  • What would be a reasonable timeline to field questions? To submit pricing?

  • What mistakes do others make when running an RFP in the industry?

  • If you were running this RFP, what would you do differently?

3. Communicate Terms and Expectations Upfront

There are some questions that you are going to get from your vendors, without fail, every time you run an RFP. Why not beat them to it and provide the answers upfront?

What are the contract terms?

  • Start Date

  • Duration

  • Payment Terms

  • Automatic Renewal

  • Cancellation Window

Will there be multiple rounds?

  • How many rounds?

  • How many vendors will advance?

What’s the communication protocol during the RFP?

  • A single point-of-contact?

  • A strategic sourcing forum?

  • Are questions permitted after the ‘Submit Questions Deadline’?

How will bidders be evaluated?

  • What criteria are most critical?

  • Will you be using a scorecard to evaluate vendors?

  • Will lowest price win?

There’s no reason to be coy here. The more direct you are about what you want, the more likely your vendors will move mountains to meet your targets.

4. Set a Timeline with Distinct Milestones

For both your team and your participating vendors, a clear timeline keeps everyone aligned.

Some milestones my squads have used in the past:

  1. RFP Distribution

  2. Intention to Participate Deadline

  3. Platform Walkthrough (If using a strategic sourcing tool)

  4. Submit Questions Deadline

  5. Responses Provided Deadline

  6. Pricing Deadline

  7. Final 3 Selected

  8. Pricing Round II Deadline

  9. Final Vendor Selected

  10. Contract Sign Date

  11. Service Launch Date

5. Focus on What’s Critical in the RFI

We’ve all been there. You finally get the files for the hot, new RFP from the big logo. You open the RFI doc and you start to scroll… and scroll… and scroll. Any excitement was immediately replaced by the existential dread of having to write 25 free response essays by next Tuesday. I thought we were done with History tests?

Don’t make your participants’ eyes glaze over with an infinite laundry list of essay-style questions. Focus on what information you and your team really need to make an informed decision. By allowing your vendors to spend their energy on what is most important to you, you’re going to get more thoughtful and thorough responses where they matter most.

6. Q&A&F

Question and Answer and Feedback.

Make the Q&A period a two-sided experience. Harkening back to tip #2, your vendors likely know the industry better than you do. Use the pre-pricing window as an opportunity to listen to your vendors. Don’t just impose your almighty, omnipotent RFP upon them.

I can’t stress how important it is to uncover any major hindrances before you progress much further. Embracing feedback here can save you significant turmoil in the long run.

7. Demo Your Sourcing Tool for Your Vendors

Look, most strategic sourcing tools aren’t great. There’s a reason I left my career to go build a better one. Most are clunky and outdated with a less-than-stellar user experience.

I can’t tell you how many of our RFPs (which we’ve agreed are already impossibly stressful) came down to the wire because we couldn’t figure out why the system wouldn’t accept our damn file.

While it would be incredibly altruistic for you to do a quick 30-minute demo to make sure your bidders know how to use the system, that’s not what this is really about. When they do inevitably struggle, they’re going to call you for help. All of them. At the same time.

I saw plenty of RFPs in which the vendors couldn’t figure out the system and were forced to email their individual bids directly to the customer. This, of course, defeats the whole purpose of a sourcing tool!


You bought the tool to make your and your teammates’ lives better, which is great. But half the battle of implementing a sourcing platform is making sure your vendors are comfortable using it too.

8. Be a Partner

Embrace the RFP process as the starting point for building a partnership. If you’re about to sign a multi-year agreement with one of the vendors, this is a great opportunity to start building a positive relationship.


While you are running a competitive bidding event, keep in mind that the selected vendor is going to provide a good/service for you for the next handful of years. So take an interest in your new vendor’s goals just as you’ve asked them to take an interest in yours. They’re not mutually exclusive. You can (and should) help each other achieve them together.

Again, let’s put altruism aside there… Treating a vendor like a true partner will ultimately produce far more financial and nonmonetary results than treating the relationship as purely transactional.

9. Begin with the End in Mind

I’ve already harped on how many failed RFPs lead to a take two or even a dreaded take three. Input from vendors is a surefire way to set you up for success, but it only gets you so far.

You started the RFP process by setting goals and defining what success looks like. How are you going to evaluate the collected bids against those parameters? Did you set up the RFI response document to auto-populate a scorecard? Is the pricing file structured to accommodate consolidation and comparison across vendors?

Everything you do in preparation to distribute the RFP should be in anticipation of streamlining the analysis upon receiving responses.

10. Don’t Be Afraid to Hire an Expert

At this point, you can tell that I’ve seen my fair share of train wrecks with companies attempting to manage their own RFPs. Honestly, why wouldn’t it be a struggle for them? It’s not their day job and they’re not industry experts.

But the concept of paying a third party seems a little ridiculous when the whole purpose of running the RFP is to cut costs, right? I get it. That would be my position too. But, speaking from experience, trying to run an RFP without the right personnel internally nearly always becomes markedly more costly than hiring the expert.

They’ll bring industry experience, RFP templates and SOPs, analysis automation, negotiation tools – all for a fraction of the savings they’ll find you.

Yes, admittedly, I’m saying this as a guy who runs a company that provides RFP management services. But even if it’s not Proficy, I encourage you to explore the option. It’s an underused service that could make your life a lot easier.

I mean, we’re shooting for the same thing here. The time has come… Let’s help each other vanquish the mortal enemy that is the RFP process.


#rfpmanagement #spendmanagement #procurement

Proficy streamlines procurement and drives down vendor spend through a cloud-based strategic sourcing platform, procurement data transformations, and RFx management services.

CONTACT

2997 Cobb Pkwy SE

Suite 300 #724822

Atlanta, GA 31139

© 2020 Proficy, Inc.