Introduction
The Request for Proposal (RFP) process, often viewed as cumbersome and time-consuming, remains a crucial tool in sourcing goods and services. Despite its challenges, when executed effectively, RFPs offer a structured and fair approach to vendor selection. This guide outlines an eight-step process designed to streamline your RFP workflow, making it more efficient and less burdensome for all parties involved.
We’ll get you through RFP in 8 steps!
They are…
1. Spend analysis identifies sourcing opportunities
2. Scope and details
3. Prepare the RFP 4. Await answers
5. Evaluation and supplier selection 6. Contract negotiation
7. Implementation/handover
8. Lessons learnt
What makes a good RFP?
The preferred approach for tendering goods and services is RFPs. Without a proof of concept, RFP may not be the ideal way to assess specialised expertise and complex solutions.
When administered well, RFPs are transparent, objective, and fair.
Candidates fret and worry over badly written documents, leading to clarification queries, iterations, and unsatisfactory submissions.
A good RFP outlines submission quality, business needs, and contract duration. It seeks customer satisfaction, service excellence, and business value.
How Long Do RFPs take?
Typical RFP timelines range from six weeks to indefinitely. There may be no organisational strategy alignment on desired results. Business priorities and needs may be misinterpreted.
Administration is generally the biggest obstacle to agile RFPs. Despite the availability of sourcing technologies, many organisations still use manual draughting and email-based RFPs.
Emailing documents demands patience and precision. Project complexity, team size (and relevance), number of possible suppliers, number of RFP rounds, amount of information needed, and contract negotiation time all affect the timeframe.
Defining requirements with business stakeholders takes time, thus buying a new product or service takes longer than buying from approved or recommended vendors.
Eight-step RFP procedure
These steps provide a checklist and practical approach to finishing RFP in 4 weeks.
Please note that this blog is meant to help you streamline your RFP process, not to pressure you into a big choice.
4-week RFP processGraph: The 4-week RFP—how to finish in 20 business days
1. Spend analysis identifies sourcing opportunities
Spend analysis might uncover consolidation and sourcing opportunities. A business owner may have requested an RFP, or you may have recognised an opportunity and stakeholder buy-in.
Before starting the RFP, you must determine a return on this resource and time commitment.
Experienced category managers analyse their market domain beforehand. Ensure your product/service is marketable.
Intro calls with suppliers might help scope. You may discover new aspects of the offering as you learn more. In intro calls, you might hint at upcoming tenders so the market can respond to demand.
2. Scope and details
Determining scope before writing an RFP is crucial. Hold a kick-off meeting with internal stakeholders to maximise commitment and alignment. Use your company’s expertise to write specs and business requirements.
Subject matter experts (SMEs), stakeholders, and end-users must agree on the outcome. Your stakeholders presumably have market intelligence and supplier recommendations.
Many sourcing projects fail due to strategic misalignment. Ask stakeholders for clarification if you can’t define the scope.
Your RFP team should be available upfront. Schedule meetings with SMEs and senior management to discuss the scope, process responses, evaluate suppliers, and negotiate. Front-end-loading is the stage.
3. RFP prep
The RFP cover letter should introduce you and explain why you value this product or service. Tell prospects everything about your situation and goals. Convert specifications, essential criteria, and user needs into RFP questions and templates.
We offer 3 RFP preparation tips and templates! Enjoy.
Software vendor RFP questions | free template and cover letter
A procurement savings management RFP template
Writing a Procurement Analytics Software RFP
4. Await RFP replies
We can finish publish-to-receive in two weeks. Response time may be shorter if you are tendering a simple catalog-priced product or service. Large, high-value RFPs are generally answered by professionals.
A tight timeframe will certainly result in a NO-BID. If RFP candidates are contracted suppliers or familiar with your firm, methods, and needs, they may provide a response faster.
Awaiting responses shouldn’t waste time. Plan and prepare for the next steps now. Give candidates a week to ask clarifying questions and respond quickly.
5. Supplier evaluation and selection
Before sending out, evaluation criteria must be agreed upon for fairness and openness. Fully and correctly completed candidate forms and tables make compiling, applying weightings, and evaluating easy. This process takes minutes with analysis tools.
However, internal alignment and buy-in may be difficult. Attention is needed for open-ended queries. Sourcing software provides pre-made rating and recommendations, but humans must qualify responses and decide.
Reserving a day for site inspections, presentations, financial audits, or product testing might enhance supplier qualifications. You could start a POC project. Planning and preparing a successful POC may take longer than four weeks.
6. Contracts and negotiations
Shortlisted candidates may be asked clarifying questions before talks. BAFO negotiations may occur with numerous shortlisted applicants.
Consider an e-auction for transparent price bidding. E-auction works for products and services that can be readily compared, but not for challenges that require several proposals.
Contract negotiations with the desired candidate. If parties disagree on specifications, service standards, and duties, complex talks might take weeks. Non-scheduled negotiations with an unknown goal can cause delays.
Before dealing with the provider, agree on a minimum-viable contract with your internal team. Reserve legal and subject matter experts for the negotiation period.
Make sure everyone has the latest data and papers and defines their negotiating team roles to speed up the process. Good planning, engaging supplier(s) in iterative requirement formulation, and familiarising oneself with the supplier’s standard SLA for common ground reduce negotiation effort.
7. Implementation/handover
First notify internal stakeholders, then the winner, then other suppliers. Communicate scope, contract conditions, SLA, and KPIs to stakeholders and end-users.
Designate a contract owner and relationship lead to monitor KPIs and work with the provider. Activate the provider in appropriate systems. Determine procurement engagement and governance. Decide how to validate prices during the contract.
8. Lessons learnt
Reflect on each RFP process and solicit candidate and internal stakeholder input. Improving the RFP process and aligning interests will make stakeholders keen to support future sourcing projects.
Unselected candidates should be given comments on why they failed and how they may improve.
Our rapid RFP step-by-step guidance is complete. When used to test the market or confirm a purchase, RFPs are frequently criticised. Be upfront with potential business partners about your RFP goals.
Tips for saving RFP time!
Last, some RFP time savers:
- Limit applicants to focus your efforts. Include only candidates with a good possibility of winning. The quantity of candidates multiplies your time spent reading responses, questions, and comments.
- Send a cover letter. A proper briefing prevents candidates from asking many questions.
- Use pre-written RFP questions to evaluate functionality. Focus on basics.
- Provide pricing tables and pre-filled forms. This simplifies answer evaluation later.
- Introduce your obligatory requirements, compliance documents, non-disclosure agreements, information security standards, and code of conduct upfront to avoid surprises.
- Get vendors’ SLAs for assessment. As with SaaS, suppliers may opt to apply their SLA for all clients, depending on the service and industry norm. Reviews of SLAs let you compare vendors’ service coverage.
- Never assume vendors know your internal lingo. Introduce internal terms and acronyms.
- Please provide contact information and a preferred date and time.
- An RFP timeline can include presentation or negotiating dates. Share the service launch date.
- Provide explicit RFP answer submission guidelines. Explain what candidates’ documents you need.
- Source and sign electronically. E-sourcing streamlines RFP distribution, audit trails, and response storage. E-signing reduces signing waits and safeguards document versions.
Conclusion
Streamlining the RFP process not only saves time and resources but also ensures that your organization makes informed and strategic purchasing decisions. By following the outlined eight steps, you can transform your RFP process into a more agile, transparent, and effective operation. Whether you’re assessing new market opportunities or negotiating contracts, these best practices will help you achieve better outcomes with greater efficiency.
