A Request for Proposal or RFP is the long-standing approach to selecting new products and services by obtaining competitive bids from a selection of solution providers. The idea is to bring structure and rigour to the procurement process, ensuring clearly specified objectives and requirements, high quality responses and well-informed decision making. Typically, the process is only applied to larger value purchases or where there is a degree of complexity to the requirements or deployment.
The process goes by additional names as well, as determined by convention across organisations and sectors. A common term is vendor selection, particularly in conjunction with choosing marketing technology, rightly placing the focus firmly on the identification of the required solution provider. In the public sector particularly, an RFP is sometimes known as an Invitation to Tender or ITT, highlighting the intent to obtain a proposal from potential solution providers for consideration by the purchaser. A less frequently used term, request for quote, is usually reserved for smaller or less complex projects.
However it’s known though, the key aim of an RFP is to encompass the preparation of well-defined documentation for the required solution together with a properly managed process. Solution providers appreciate a well-constructed and managed RFP, helping to ensure they can provide the best response possible. This can particularly be reflected as a saving in time and effort for both purchaser and solution provider by eliminating cycles of obtaining further information or clarification after an RFP has been issued.
All too often though, the request for proposal process becomes onerous and time consuming, resulting in additional work for both the purchaser and solution provider. This can lead to delays, inaccurate cost estimates or even no-bids, where a selected solution provider chooses not to submit a proposal at all. Though on the face of it this might be viewed as one fewer response to have to evaluate, in reality, it presents the risk of missing out on a response from an eligible provider. Such a candidate-bidder may view a badly presented RFP as not worth a response as they have plenty of other work – possibly exactly the successful, in-demand solution provider that should be high on the short list.
A multi-step process, it’s important to consider all elements of the RFP equally, from requirements capture, documentation and solution shortlisting to pitches, evaluation, selection and contract negotiation. Adhering to a well-defined sequence of activities results not only in better responses from solution providers, but helps to identify the problem that a new solution is to resolve, fully define the objectives and ensure that all stakeholders are involved. It’s all too common to rush out and obtain proposals from solution providers without the business problem in hand having been properly identified, scoped and defined.
Process and maintaining a level playing field are important (particularly in public sector scenarios), but they shouldn’t be allowed to dominate. A good RFP will make plenty of allowance for solution providers to seek clarification and express their ability to deliver a unique and value-added response. While price is an important aspect of the RFP response, the lowest bidder will not necessarily be automatically selected. Allowing a fully rounded solution to be presented makes it possible to identify the provider with the best scope and fit in combination with the optimum pricing.
Even in smaller companies, and certainly in larger corporate and public sector organisations, managing an RFP and getting the selection of data-driven marketing technology solutions right is an involved process, requiring careful planning, management and control. Good luck!