An RfP is a complex process with a wide variety of activities, responsibilities, and opportunities. Risks are part of the equation too when acquiring Services or Products from an external supplier.In essence, an End2End perspective on RfPs has a major impact on your company’s ability to perform, as the value adding process relies on said procured Services or Products.
There are many different aspects around complex RfPs to consider – starting from identifying the scope of the RfP to engineering technical or service requirements and executing the Request for Proposal.
Additionally, there are specific processes within an RfP, which can range from requesting information to simply requesting a price tag on a given specification. Executing the Transition and ensuring delivery of procured services or products are also part of it.
Very often these areas are underestimated because their impact on the overall performance of the company is generally not carefully considered. Therefore, we take a closer look at the critical questions in the following:
Why is an E2E perspective important - from identifying the need to operationally control the execution of the service or delivery of the products?
This approach is crucial from identifying needs to executing services or delivering products. During RfPs, it ensures smooth collaboration across departments, encompassing technical divisions and supporting functions like contracting or sourcing.
RfPs are instrumental in shaping contracts, emphasizing the need for precise definitions to maintain consistency in delivery according to specified requirements. Contracts vary in complexity and long-term impact, from straightforward service contracts for consultancy to intricate strategic supplier agreements consolidating efforts.
Executing contracts successfully requires a holistic E2E approach to prevent overlooking any business needs or requirements. This perspective is essential in navigating contract management intricacies, ensuring thorough attention at every stage, from identification to operational management.
What are typical causes for most issues or negative effects during and after RfPs?
- Timeliness – The identification of needs is the number one, time consuming step. Generally, this happens when there is a clash between business goals and operational requirements. (e.g., business is focused on costs while operational on technology), which leads to rushed negotiations with limited outcome or leverage.
- Specification – Most problems in service or product delivery are often caused by improper specification or consideration of all possible scenarios. This can be a result of the lack of exports in innovation or knowledge on RfPs. Often this is not cause by a single requirement, but a combination of requirements which create unclarity or inconsistency.
- Clarity – Based on our experience we have seen requirements in the original agreements that are unclear in terms of needs, prerequisites, expectations, or guardrails. Typically, these are regarding the deliverables, timelines, or extensions to previous specifications, which increase costs.
- Potentials – Missed opportunities arise through missing vendor competition or comparability in conjunction with improper financial optimization potentials (e.g., three vendors provide better comparability of the offers than only one vendor)
What activities must be performed in connection with a RfP?
1. Preparation prior to an RfP:- Preparation and execution of Project Plan / Kickoff
- Execution of Needs Identification Workshops
- Preparation of early Cost Estimation
- Definition of Requirements and Preparation of RfP
- Preparation of supporting Management Presentations
- Evaluation of Offer Quality and Pricing Comparisons
- Support during Negotiation and Approval
- Support during Transition / Onboarding
- Preparation of Project Status / Steering Meeting Presentations
- Updates to Project Progress Report
- Management of Trainings
- Setup of Roadshows
- Calculation / Reporting / Tracking of KPIs
How does the process of RfPs ensure proper vendor selection?
A thoroughly executed RfP plays a pivotal role in ensuring the appropriate selection of vendors through several key stages. Firstly, it involves conducting both internal and external research to identify existing or potential vendors.
Subsequently, the RfP documents and attachments are meticulously crafted to articulate the scope of services or products to be procured, and the request is then issued to pre-selected vendors.
Following the receipt and evaluation of proposals, a shortlist of bidders is compiled for subsequent technical and commercial negotiations.
Lastly, after finalizing negotiations with the shortlisted bidders, the final approval is granted, solidifying the vendor selection process.
What are the benefits for implementing a proper End2End Tender-Management-Process when starting complex RfPs?
- Increased visibility and value understanding of actual needs
- Intensified competition through market research
- Improved comparability via standardized approaches
- Scalability for cost leveling
- Heightened transparency for sound decision-making baselines
- Enriched knowledge and insights for future RFP engagements.
Bringing it all together: Summary and Conclusion
Understanding the intricacies of RfPs represents only the first step on the path towards successful execution. Although this article has not plunged into the depths of these complexities, it is imperative to recognize that a comprehensive conception of these nuances is indispensable, particularly when it comes to the scope of strategic supplier agreements.
Considering this, the RfP process, coupled with the subsequent efforts to deliver the procured services or products, requires the implementation of a robust and well-structured Project Management framework. Moreover, the involvement of relevant stakeholders at the each stage is of paramount importance to ensure seamless execution.
Drawing upon our expertise in the area of RfP Execution, we extend a cordial invitation for you to establish contact with us. We are enthusiastically offer our assistance to cater to your procurement requisites and guide you through this complex but exciting journey.