Why the RFP Process Is Still Relevant in the Digital Age
Many people hate Requests for Proposals (RFPs) and the entire RFP process. Whether they’re part of the offeror’s team or the responding company, it’s tough to blame them: Often, RFPs are hundreds of pages long and require exhaustive information about a product or service. Further, they demand contractually binding responses, firm pricing and strictly enforced due dates.
This painstaking exercise has led some companies on both sides to ditch the RFP process altogether. They believe they can get by on word-of-mouth, in-person pitches or other less-intensive sales processes. However, they’re in for a rude awakening, especially as RFPs become more and more prevalent in our hyper-digital age. The current need for better, stronger, faster technology means that finding solutions to this goal has become increasingly complex.
Considering how B2B solutions have evolved in just the last few decades, it’s a logical path. We’ve moved from traditional paper-pushing processes to a workplace where everyone has a computer, tablet and smartphone that pushes data to various storage facilities. Further, different devices have varying levels of functionality, data security, update cycles and access control policies. So, when an organization seeks an IT solution, they don’t only consider the variability in the solution itself. They also consider factors such as budget, market position and industry.
Playing in the RFP space can be the critical difference between securing the right technological solution and being left behind. Below we further explain why modernized RFP processes make more sense than ever in our digitally devised world.
Because IT Is Increasingly Complicated
Procuring IT solutions has become increasingly tricky. More and more stakeholders must be on board with the solution within companies and agencies before implementation. And, once an IT solution is implemented, it’s often tough to change. Add to the heightened threat of data insecurity, and finding precisely what you need can feel like searching for a needle in a haystack.
Moreover, many procurement teams are not necessarily IT Subject Matter Experts (SMEs), having studied sales, marketing, administration or another relevant field. In addition, procurement personnel are usually responsible for purchasing many types of solutions outside of IT. Thus, they typically can’t hone in on this particular industry. So, without an RFP’s lift, how can procurement teams effectively evaluate different solutions?
Consider that it would take hours, if not days, for just one (1) representative of one (1) company to speak to all the points typically included in an RFP. Even with detailed pitch decks, they would still need to bring in their legal team, finance officers and developers. Now, multiply that process by all the vendors in consideration. By the time everyone is evaluated, months have passed. And the first vendor has been arguably forgotten, and the procurement executive is most likely exhausted by the options.
An RFP solves these issues and more! That’s because everyone responds to the exact requirements in the same format and deadline. But unfortunately, it’s commonplace for RFPs to state that deviations from the proposal requirements will automatically disqualify a respondent from being chosen. The reason: if you can’t compare apples to apples, the objective of the RFP becomes null and void.
Because Price Isn’t the Only Thing That Matters
With digital solutions especially, price isn’t the only factor to evaluate when choosing the best solution. For instance, you may be more concerned with the functionality and flexibility of a platform over the initial implementation cost. Alternatively, you may focus on business continuity and data security rather than the price of these features. With an RFP, you can highlight what you’re most concerned with. This means respondents will tailor their proposals to what the solicitor wants and needs.
Depending on your industry, your procurement may have vast and stringent legal and regulatory implications. For instance, let’s say you’ve committed to keeping your client information confidential. Procuring a data security solution would thus require you to demonstrate that you chose the best possible option in the marketplace should there be a future data breach. An RFP allows you to call out this stipulation for potential vendors.
Because Auditability Is Essential
Procurement teams concern themselves with ensuring that the solution is the best in the market and how they can communicate that to key stakeholders in their organization. To that end, the ability to audit is not something a sales pitch normally provides. Even if the salesperson knew to touch on it, what would you do with that information?
For example, say there’s an unforeseen disaster during the implementation phase of the solution you chose. A senior manager wants to know why you picked this solution over another proposal. It would be tough to explain this without citing all of the information in writing in an RFP.
By having an RFP process in place, you could easily explain the selection procedure. All respondents’ answers, the scorecards and any communication with them would all be at your disposal. In addition, the methodical procurement of the solution through an RFP provides built-in auditability no matter what the future might bring.
Because RFPs Keep You Organized
As previously noted, procurement executives are typically responsible for making purchasing decisions for more than one solution at a time. Keeping all notes and information in order would be increasingly difficult without written responses that contractually obligate respondents to their answers. Imagine a company is bidding on two (2) different projects simultaneously, both of which you’re tasked with evaluating. The overlap can easily create room for unintentional error or oversight.
Also, without expertise in every industry a procurement executive is purchasing for, it makes sense that detailed reviews would be necessary. For example, perhaps the procurement team is trying to determine the best provider for dialysis equipment, and the RFP mentions a medical term they’re unfamiliar with. The written nature of the RFP allows for research without missing key information. This, in turn, will help you pick the best vendor for the required solution without any information gaps.
Because Timing Is Paramount
Finally, the RFP process puts the power in the hands of offerors since they can dictate the project’s timing and priority. Ordinarily, RFPs allow for the submission of questions by a specific date. This is so the procurement team has time to find the right person to answer them.
Additionally, the RFP process rarely — if ever — allows for late submissions. This stipulation thus gives you an accurate picture of how long it will take from solution inception to full implementation. And, because RFPs are contractually binding, respondents will have little leeway for lateness. On the other hand, should the offeror’s priorities change, RFPs typically include wording granting the procuring agency the authority to shift the timeline in their favor.
In today’s accountability-focused world, all levels of government and large corporations must answer to the public more than ever before. This, coupled with the increased complexities of the digital age, necessitates keeping procurement efficient, fair and transparent. So, in answering why procurement is relevant today, we must look at the given solution’s complexity, customization, auditability, organization and timing to fully understand why procurement is not only necessary, it’s preferred.
Would RFPs Benefit Your Organization?
Whether you’re seeking an IT solution or a completely different product or service, The Bid Lab can serve as your RFP manager. Our dedicated team can work with you throughout the entire procurement process. We can assist, from gathering market research and issuing RFIs to drafting your RFP and evaluating your vendors. Or, we can help you with one specific pain point that’s simply overwhelming your team! Think of us as an unbiased, flexible and positive extension of your procurement group. Ready to let us do the busy work of building a bid? Contact us today for a free consultation! You can also call us at 1-844-4BIDLAB or email us at firstname.lastname@example.org.Then, you can focus on the work that really matters!