RFP Writing for Procurement Solutions – Stop Repeating the Same Mistakes! Thomas Kase - September 3, 2015 8:03 AM | Categories: Best Practice, Procurement, Requisition / PO Management, Technology | Tags: L1, Sourcing & Categories RFXs of all kinds are a way of life for procurement. Whether it’s a request for information (RFI) to try out prospective suppliers, a request for proposal (RFP) to firm things up around a specific activity or a locked-in request for quote (RFQ) round when you already know what you want, churning these out is par for the procurement course. As commonly practiced, most corporate requirements state that 3 proposals are needed before contracting for goods and services – usually required above a certain dollar spend. This means buyers write RFPs often – so they should be experts, right? One would certainly hope so for the direct side, or companies would be in trouble – as well as for many indirect categories. However, in our experience, there is at least one glaringly troublesome RFP type where buyers get in the way of themselves – and that is when going to market for procurement software solutions. The typical solution RFP, if we were to pull one out of an envelope, likely resembles a dreamy concoction along the lines of, “really cool things we might be interested in doing someday if we can ever find enough time, budget and the headcount,” but it is not very tangible around how the company measures its success, and often insufficient details about its current situation, what works well and what works poorly. This applies fairly evenly regardless of which solution acronym (SIM, CLM, P2P, S2P, etc.) we are talking about. So What is a Buyer Supposed to do? From past personal experience working as a proposal manager for a leading e-sourcing solution provider, I know nearly all RFPs that came across my desk were fairly useless in regards to assessing how we, the solution provider, could help the prospective client drive success in its organization. This key criterion was oddly missing from most RFPs. Guessing (or lying) when responding can be a workaround, but that is a terrible way for providers to run an RFP process. I have written about this challenge in the past, and recently I came across a post on the evergreen RFP topic by Ed Mathews, head of sales at Scanmarket – which is a strategic sourcing solution provider active primarily in Europe and in the US. Ed also has long experience from several solution providers and has pitched and delivered procurement solutions to numerous firms among the Global 2000. I really liked Ed’s article, so I called him, and we discussed our shared frustrations when seeing poorly written RFPs. The piece obviously includes a few self-promotional lines about Scanmarket, which Ed is solely responsible for, but we share his sentiments that practitioners go into far too much detail around the solution design. (Isn’t it reasonable to assume that a successful solution provider with dozens or hundreds of satisfied clients has a good product?). Practitioners also spend next to no effort on clearly delineating their current situation – what works and what doesn’t – and where the company wants to go, with key metrics to measure the journey. The latter half is what providers need in order to assess if there is a good fit – and software-as-a-service (SaaS) providers don’t want to sell solutions that are a bad fit, those clients don’t renew. Fundamentally, solution providers want to make their clients successful – it’s a simple as that. As I said above, especially SaaS providers! That’s what drives renewals. Maybe buyers have been burned too many times over the years with on-premise perpetual license software that turned into perpetual shelfware. SaaS solutions are different. Another issue is the time and effort (on both sides) spent on completing traditional RFPs – this is a huge time soak for suppliers, and even more so for the clients who have to go through their 1,000 questions and score and compare across several potential providers. Especially given the low price points of most SaaS solutions – with most annual fees running from high 5 figures to mid 6 figures depending on provider, number of modules and complexity. Is it really worth it to tie up senior resources in numerous meetings? Or is it better to quickly find a solution that is already successful among companies of similar size, vertical and complexity (number of business units, ERP systems)? We argue for the latter. Takeaways Procurement solution RFPs need to communicate success outcomes, not rigidly detail features. There are always many ways to accomplish tasks – don’t waste time validating basic functionality. Do your homework before going into an RFP – know exactly what your current process is, what you want to retain and what needs to change. Consider the cost to complete the RFP process for both parties. Internal resources are precious and the ROI should reflect how much time is tied up in the selection process. This goes for both providers and practitioners. Sophisticated and successful providers know when to walk away from RFPs from aimless prospects with undefined goals. Related ArticlesWho’s Down With RFPs? Every Last Technology HomieTechnology RFPs: Are You Wasting Time and Money?Improving RFP-Driven Technology Sourcing Outcomes: Strategies and Tactics Learn Tips on How to Enhance Your RFPs With This Must-Read Research PaperCloud procurement secrets, lessons from IT, and how to write a better RFPWrite Better RFPs – How to Get What You Want (and Need) From Suppliers First Voice Nick @ Market Dojo: 03.09.2015 at 11:11 am It is a great article by Ed and something we totally agree with. I can understand why these kinds of RFX templates get used when you have a budget of several million dollars and face a 12-month implementation plan involving nearly every aspect of the business, e.g. for an ERP tool. However, as you say Thomas, when you’re out to market for a best-of-breed eSourcing tool that can be implemented in hours, it seriously isn’t worth anyone’s time to recycle the same RFx template!! Reply Discuss this: Cancel reply Your email address will not be published. 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