E-Sourcing tools have enabled procurement professionals to relatively easily create, distribute, collate and analyse extremely complicated Request for Proposals. Complex weighted scoring mechanisms, even combinatorial auctions have become the norm. However, it’s tempting to get carried away using complex templates and scoring criteria that are in all honesty overkill for the product or service that is being procured.
At a simple level, suppliers will assess RFP opportunities either knowingly or unknowingly using 3 main criteria:
The cost of bidding. How much resource and effort do I need to navigate the bid process to get to a potential agreement?
The likelihood of being successful. Is this a genuine level playing field? Am I an outside shot? How have I fared previously in similar bids?
The attractiveness of the contract. How much do I really want this business? What are the short and long term benefits?
If the supplier has a negative feeling about at least 2 of these, then there is a fair chance that they will either not bid, or perhaps put minimal effort into the early bid stages.
To combat this, buyers should consider the following guidelines:
Keep the RFP as simple as possible, using an e-Sourcing tool that’s extremely user friendly for suppliers.
Only release the RFP to selected genuine potential suppliers and let the suppliers know this. You need enough to generate competition and reach the market price but not so many that suppliers lose heart.
While the prime aim for the contract is to suit your own business’ needs, try to make it as attractive as possible for suppliers, for example a reasonable contract length, reasonable review frequency, good volume forecasts etc.
Not only will this increase supplier engagement, but it will also make the process more efficient from the buying perspective too.