5 Most Common Goof-ups in RFP Development

If you decide to outsource, it usually leads to creation of a Request For Proposal, or RFP. Creating an Outsourcing RFP is not same as RFPs for goods and services which are produced by procurement or purchase department. A poorly designed RFP leads to poorly developed provider solutions.

Competition brings out the best. RFP is usually done to have several companies bid on the work, thus producing more competitive prices. However, if it is not done correctly, it can produce no bids or bids that are a waste of your time.

Following are some of the most commonly made mistakes which are seen in internally developed RFPs.

Mistake #1:

Often writing a RFP is in limelight and aligning on sourcing strategy is overseen. Before writing a RFP, careful and complete evaluation of sourcing strategy (including change management and communication planning) should be done, figure out what you need, what you want, and what is can be done. For example, there is no point in issuing an RFP for a machine which produces 250 appliances per hour when you have never sold more than 25 a month. Similarly, issuing an RFP for a flying car when a messenger can get through traffic just as fast on a bicycle would be useless.

Mistake #2:

Another mistake companies make is that they set the scope and solution tightly. Companies want to achieve the same processes at a lesser cost. Each company which responds to the RFP has different strengths and different things to offer. Some will focus on lowest cost; others on best quality; still others on most complete feature set. This results in providers being forced to modify their process into client process, and output is rarely acceptable. You should decide up front whether you are looking for the lowest cost, the fastest delivery, or some combination.

Mistake #3:

Another common goof-up which occurs in designing a RFP is that companies do not fully document their retained organization assumptions in RFP. Companies often underrate the support and skills needed for retained organization.

Mistake #4:

Google, Bing, Yahoo are the best creations of mankind. Most decisions these days are taken over a Google search result – be it which mobile phone to purchase for your mother or which providers receive a RFP. Lack of proper research to find right group of providers puts the entire sourcing project at stake.

Mistake #5:

Sometimes there is so much focus on RFP preparation that the evaluation of RFPs is overseen; the main focus is on pricing. Selection of provider is the most crucial decision to be taken in RFP process. Careful selection is necessary to make sure you land with the best fit.
Organizations looking to develop the right RFPs to drive their sourcing strategy and transform their operations may benefit from these findings.

About Author:

Nisha Tolani is consultant and part of Systems Plus Pvt. Ltd. She is a part of consulting team that delivers Sourcing and Vendor Management Office projects. She can be contacted at: nisha.t@spluspl.com