Strategic Outsourcing Professionals

As you begin to engage a Request for Proposal (RFP) process for sourcing procurement, here are a few items to think about before you undergo mass distribution to potential vendors. Typical procurement methodology will generally suggest that you create competition with bidders, clearly outline expectations for services, enable an objective method of evaluating vendors, and setup an avenue to negotiate the best possible terms, conditions, and pricing. While this is all true, it can be challenging to ask the right questions in an RFP. Additionally, most large vendors have streamlined their customer acquisition process to bid on more projects. Essentially, they have templates designed for the high-level and standard questions so they can focus on customizing a few key questions in the response. That being said, vendors will look at an RFP to assess the likelihood and effort needed to win the work. For best results, read the RFP through the vendor’s eyes to understand their motivations for constructing a response.

In my experience, this is what a vendor will contemplate when evaluating the incoming RFP.

• Is this a new service opportunity or is there an incumbent already providing service?
  • If there is an incumbent, why is the customer looking to make a change?
• How unique are the services and is there a way a vendor can differentiate their offering?
• Does the customer know what they are looking for with their RFP or is it necessary to engage in a lengthy procurement process with rounds of interviews and questioning?
• How big is the opportunity if the vendor wins the business?
• Does acquiring the customer have any strategic benefit for developing or winning other lines of business?

While this may seem simple, positioning and addressing these questions in the RFP correctly should reward you with higher quality responses and more competitive bids.

Here is an example of what not to do with your RFP, and a tip for how to get more competitive bids when submitting an RFP for call center or customer care services. It is bad practice to tell a vendor your current seat capacity or what your projected seat capacity may be for the future. This can be a critical mistake, especially if you are exaggerating the capacity to get better pricing. By disclosing capacity, you will guarantee a monthly minimum in the contract or a pricing adjustment after transition. To avoid this aggravating situation and business risk, include detailed information in the RFP that discloses twelve months of call arrival patterns, ninety days of forecast and the desired service metrics you are looking to achieve. This will force the bidding vendor to provide a creative and efficient solution for the right price.

Hopefully, you can leverage these suggestions to improve your company’s procurement process. If you end up getting a heck of a deal or even a promotion as a result of these tips, my favorite beer is Anderson Valley Boont Amber Ale. You will need to email me for my address or come to San Luis Obispo, CA to buy me a pint. Cheers.