Improving RFP Processes – Fixing The Broken Vendor Purchasing Process
Vendor selection can feel a lot like dating — but choosing the right vendor shouldn’t be so complicated.
“Improving RFP processes and vendor selection should be easier than dating,” says David Wadler, CEO of Vendorful. “There are all sorts of places where you can find very detailed information about the vendor.” Plus, he adds, “it’s not considered inappropriate to contact the vendor’s other ‘conquests’ to inquire about the experience.”
The best part?
“You’re not penalized by a potential future vendor for ‘playing the field’ while you move toward a decision.”
Despite the upper hand the buyer has in the Request for Proposal (RFP) process when choosing a vendor, a report by insidesales.com suggests 50% of buyers simply choose the vendor that responds first.
Wadler calls this the “first touch problem.” Because the vendor search process can be overwhelming, businesses often select the first suitor — despite not knowing if it’s the best choice. For busy SMBs focused on their day-to-day, revenue-driving business tasks, taking the easy route seems more practical than engaging in the lengthy procurement process involved in the more corporate RFP structure.
Larger firms, of course, will follow RFP best practices and request an extensive RFP process, which involves gathering a long list of possible vendors, doing an internal needs assessment, sorting through the options, interviewing the finalists, negotiating and signing a deal with credentials to back their decision.
Not only does that add time, cost and logistical headaches, this process can involve finding experts to source RFPs to find project experts to submit bids that are then reviewed by expert consultants — and so on.
Once layers of outside experts are brought into the process, the time involved ratchets up. Wadler referenced the CTO of a Fortune 500 company who hired consultants to create an RFP for a project. The process took so long that by the time the RFP was ready to go, the technology that was being contemplated for that project was already outdated.
In this case, “playing the field” wasted time, money and resources, showing why those “first touch” vendors win close to 50 percent of the time. However, data suggests that taking this shortcut regularly results in poor ROI.
Find the middle ground when improving RFP processes
When it comes to improving RFP processes, there is comfortable middle ground between first touch selection and long, drawn out vendor selection processes.
“Organizations want to enforce a policy that compels people to justify purchase decisions. It’s probably more appropriate to blame the RFP,” Wadler said, explaining where Vendorful’s philosophy comes into the mix.
”Corporate purchasing isn’t sexy — but that doesn’t mean it should be this painful. In fact, we think that corporate purchasing should make you feel good. Good that you’ve chosen the right vendor. Good that the process to do so was easy. And good that the product/service that you’ve purchased helps your business,” he noted.
By thinking of the purchasing process of choosing a vendor not like dating, but more like a beach vacation.
“Boring but great.”
Vendorful offers a free RFP management platform. To learn more about Vendorful’s free RFP management platform, visit their website at www.vendorful.com