In the previous chapter, we looked at why writing an effective RFP is one of the most important steps in the procurement process: the RFP must be able to serve as a bridge between your organization’s internal requirements and the external vendors who will help you meet your objectives.
But a successful RFP process doesn’t start and end with a written document. Even if your RFP is best in class, it won’t attract the right vendors and the kind of proposals your project needs unless you also have an effective distribution plan that directs it into the right hands.
And of course, it doesn’t end there either. Once the proposals start coming in, you’ll need to process them, compare their offerings to your business objectives, and make sense of a diverse array of vendors, each with different strengths, weaknesses, and limitations.
The RFP management process is a long-distance flight – and there may be turbulence if you’re unprepared. This chapter will help you make sense of every step in managing the RFP process, from distributing your RFP to evaluating the many kinds of proposals you get back.
In this chapter, we’ll explore:
- How to distribute your RFP so it gets into the right hands
- How to process the proposals you receive and prepare to evaluate them
- The key steps and criteria involved in evaluating vendors
- A case study of a successful evaluation process.
Distributing your RFP
Before you’re finally ready to dot all the i’s and cross all the t’s in your RFP, you should be developing a plan for how you will distribute your document to potential vendors.
You have a few options here: you can post the RFP on your organization’s website and notify potential vendors about it; you can post it to various RFP websites and online services; or you can reach out to vendors directly and send the RFP their way.
Whichever option you choose, it’s important to carefully consider which vendors you want to target as participants in the RFP process. If you cast your net too wide, or you inadvertently target vendors that won’t be able to meet your needs, you may find yourself in the middle of an awkward and complicated review process.
So how can you identify the vendors you should include when you distribute the RFP? Here are a few approaches
- Screening vendors via online directories
- Shortening the list by filtering it for memberships in professional networks and associations
- Tapping your own network for personal referrals
- Using an external consultant who understands the technology landscape and is familiar with potential vendors.
For new technology procurement projects, many organizations already have a list of preferred vendors to draw from, as well as some familiarity with the options that are available. But if you’re managing a one-off acquisition in an unfamiliar technology landscape, this may not be the case.
If you’re in this situation, you may find it hard to figure out where to begin when it’s time to identify the most appropriate vendors for the project. Bringing in an external consultant can be a timely approach: because they deal with new technology acquisitions all the time, consultants are generally up-to-date on most of the vendors in the technology landscape, including newer firms and startups that may be looking to grow by winning new contracts and delivering impressive results.
Processing RFP responses and establishing evaluation criteria
As vendors respond to your RFP, you’ll need to be ready with a system that can effectively process those incoming proposals.
If you’ve distributed your RFP thoughtfully to a group of established vendors, this processing should be relatively painless. You’ll have a small group of vendors with solutions that specifically address your core business requirements.
But even then, processing the proposals for evaluation has its complications. Each of the responses will be slightly different, focusing on different requirements, offering different price points, and showing unique strengths and weaknesses, as well as a few limitations.
In short, it’s unlikely you’ll find a perfect vendor that is able to deliver everything you want for the price you want to pay.
So when you’re reviewing the vendors’ RFP responses, you need to evaluate them using a method that allows you to compare apples to apples. Essentially, you need to map the proposals you receive onto the goal, objectives, requirements, budget, and spec list of your project in order to see where they align – and where they don’t.
How can you do this?
Every procurement project is different, but you may want to follow these key steps.
1. Establish your project evaluation criteria
The first step to take is establishing the evaluation criteria for your project. You can use an existing evaluation methodology, or you may choose to blaze your own trail.
One example of an established and effective methodology is qualifications-based selection, where proposals are evaluated based only on vendor qualifications. In this approach, a vendor is selected first, and then project scope, budget, and schedule are negotiated.
This approach can be effective because it excludes costs from the initial evaluation, and considering costs often muddies the waters in any attempt to identify the best vendor for a project. The cheapest option is very rarely the best, but your more cost-conscious stakeholders may be inclined to go with that option – in spite of the historical evidence.
Whichever evaluation methodology you choose, this is the time to return to the business objectives you defined in the first stages of the procurement process and determine exactly which business requirements a new technology solution must meet. These requirements can fall into a few camps:
- Physical requirements: How well does a proposal meet your project’s physical requirements for hardware and/or software?
- Service requirements: How well does a proposal address the requirements stated in your RFP?
- Business requirements: How well does a proposal set out a solution to your core business problems that also meets your business requirements?
- Skills, abilities, and experience: Does a vendor have the ability to deliver on their proposal, and do they have any experience with a project like yours?
- Pricing (if included): Does a proposed solution stay within your budget, and how does it compare to the other proposals you received?
Depending on your project and its goal and business objectives, you may want to include other specific evaluation criteria.
Defining the evaluation criteria for your project is essential for success in your proposal review process. Establishing these criteria will help you rank the details of each proposal under measurable categories, so you can compare proposals in a straightforward way.
At this stage in the review process, it’s important to make sure that you’ve chosen the right criteria – and that you haven’t overlooked any key requirements. Referring to your initial Business Requirements Analysis and the RFP is the key step here, but acquiring some familiarity with the technology solutions available in the market is also helpful. Knowing the ins and outs of a range of available solutions will help you to establish better, more specific criteria for evaluation. At this point, an external consultant specializing in technology acquisitions can also provide invaluable support.
2. Come up with a scoring system
Once you’ve defined your project’s core evaluation criteria, you’ll need to come up with a workable method of evaluating the proposals. A scoring system can play a part here.
For example, treating each one of your evaluation criteria as a measurable category, you could assign “points” indicating how well each proposed solution meets your project’s requirements. You could use a scale of one to ten points, or you could rank the proposals in order under each one of your evaluation criteria.
Whatever scoring system you use, the key is to assign a rough value under each of your evaluation criteria for each proposal you’ve received.
Here’s an example:
- 5 points: Meets all of your requirements
- 4 points: Meets almost all of your requirements
- 3 points: Meets many of your requirements, but requires some compromises
- 2 points: Meets some of your requirements
- 1 point: Does not meet your requirements.
3. Lay out your priorities
It’s worth repeating: no proposal is going to perfectly meet every one of your project’s requirements. All of the proposals you receive are attempting to respond to the multiple business requirements set out in your RFP. Most will score high on some evaluation criteria and low on others.
After scoring all of the proposals, you should think about which of your project’s requirements carry more weight than others, where there may be room for compromise, and where you’re not willing to compromise.
For example, you might be willing to spend more money for a solution that meets all of your service requirements. In that case, you’ll be prioritizing service requirements over budget.
Or you might be more concerned about whether a vendor’s proposed solution meets the physical requirements set out in your RFP than you are about the vendor’s experience.
It can be useful to assign a weight or a priority ranking to each of the evaluation criteria you identified at the start of your review process. For example, you could assign one of three rankings to each one of your criteria:
- High priority ranking: criteria that don’t permit any compromise
- Moderate priority ranking: criteria that permit some compromise
- Low priority ranking: criteria that can be flexible
But assigning a priority ranking to all of your evaluation criteria can be difficult. At this point, an external consultant can help you distinguish between what’s important and what’s not, for a couple of reasons, as a guide for your decision-making.
First, they’ll have some much-needed distance from your project. With no skin in the game, they’ll be able to objectively determine which of the project requirements are essential (high-priority), and which can be put further down on the priority list.
Second, consultants have the advantage of insider knowledge. They work on these evaluations and technology procurement processes all the time, so they know what can make or break a project. They can help you dial down the noise, advise you about which of your project’s technical specs are important and which are not, and then help you weigh the costs and benefits of your options.
Evaluating the proposals
Now, in the final stage of your RFP review process, it’s time to have some fun as you put all the criteria and priorities you have established into action.
It’s a good idea to share the vendors’ proposals with the members of your project team, so that they can review each response and gather up their thoughts. Afterwards, at a team meeting, you’ll be able to discuss each proposal, review the evaluation criteria, and rank them.
It’s also important to document this process thoroughly. At most organizations, strong internal controls are in place for selecting vendors. And in heavily regulated industries like pharmaceuticals and manufacturing, there are external auditors to consider as well./span>
An evaluation case study: the Canadian Hearing Society (continued)
For an illustration of the proposal evaluation process, let’s go back to the RFP case study in the last chapter. To recap, Enginess was brought in to guide CHS through the process of acquiring and implementing a CRM. At Enginess, we worked with CHS to identify its business needs, map critical processes and workflows, and create a detailed RFP.
But our involvement with the project didn’t end there. After creating the RFP, we stayed on to assist with the RFP distribution and proposal review process in a number of ways:
- We identified a set of capable vendors and distributed the RFP to vendors that were a good fit. Our knowledge of the CRM technology landscape and the industry in general meant we were able to quickly identify any vendors that were a good fit and get the RFP into the right hands.
- We made technical recommendations for the CRM platform that helped CHS identify its key technical priorities. When we were brought in, CHS wasn’t familiar with the various CRM platforms. So identifying the key technical priorities for a CRM solution was a key step in preparing for the vendor evaluation process.
- We helped identify which evaluation criteria were a priority, based on their technical requirements, and which criteria they could put aside. We could do this because we understood CHS’s core requirements, and because we have enough familiarity with the features of each CRM platform to make a call as to which features would make or break the project.
In short, at Enginess, we were able to effectively assist CHS in its vendor evaluation process because we were familiar with the organization and its business and technical requirements, and because we had a deep familiarity with the solutions that were available in the marketplace and the vendors that would respond to the RFP.
Having a presence in each of these camps helped us hone in on the vendors who could meet CHS’s internal goals and then distribute the RFP accordingly.
It also enabled us to support CHS through the selection process. Because we were deeply familiar with their business requirements, budgets, and goals, we were able to help set evaluation criteria, identify priorities, and facilitate internal discussions.
- Managing the RFP process doesn’t end with an effective RFP document. You also need a game plan for the next stages of the RFP process:
- Distributing your RFP to a core group of vendors
- Processing RFP responses and ranking the proposals under measurable categories that let you compare all of the proposals in a meaningful way
- Establishing evaluation criteria and setting out your priorities
- Facilitating a productive discussion and evaluation process among your team members and key stakeholders.
- Managing each stage of the RFP process and evaluating vendors’ proposals can be a challenge if you’re not familiar with vendor or technology options.
- An external consultant can be helpful in this exercise, as the CHS case study shows. A third party can help you distribute your RFP effectively, prioritize your project’s requirements, and objectively evaluate the proposals you receive.