Friday, September 5, 2008

Do RFPs lead to bad proposals?

Some organisations are incredibly concerned with the appearance of impartiality and fairness in the RFP process. Yet, I believe that this is potentially damaging for them.

Don't misunderstand me...I'm not against fairness. I don't want my competitor holding an advantage over me that I don't know about. Although I do want to try and mine my relationship with the client as far as I can for valuable information and to ensure I'm not at a disadvantage.

It's the approach that some organisations go through. We all know the potential gains of working with people you know and trust. So why create a procurement system that denies any contact with the client other than online forums? Why have a response template sent out that counts exactly the number of characters in each response section? Why use an expensive e-procurement system that is frustrating and seems irrelevant for for many suppliers?

Why? Several reasons. Firstly - transparency and audit trail. If there's a complaint about the process or preferential treatment, it's easy for the buyer to say that it isn't so...look at the Chinese wall we surrounded ourselves with.

Secondly - evaluation. If every response is the same style and format, it should be easier to objectively evaluate and score that response.

Thirdly - management of suppliers and procurement opportunities. It's easy to control and manage external relationships and supplies, especially when the e-procurement function is within a larger corporate ERP system.

Fourthly - Cost. If all proposals are equal, then surely it makes it easier to procure the supplier with the lowest price...especially when using a reverse auctioning system.

But at what cost to the client. Surely some flexibility to allow one of your suppliers to demonstrate some out-of-the-box thinking, to come up with a creative solution for your need. To show that just because it's big business purchasing it doesn't mean that small supplier entrepreneurship needs to be quashed. 

Creative proposals are better for creative and bespoke solutions. OK - if you need 1,000,000 widgets then a system like this might work for you (though I know that the widget suppliers find them overkill). But when you have an opportunity to get new, fresh ideas from new, fresh business and individuals, don't stop the lateral thinking before it's even begun by only allowing proposals that don't have graphics. Treat yourself to new thinking by opening to the possibilities that a completely open response format would allow.