Save Time by Leveraging a Lean RFP

Thoroughly creating a team, gathering requirements, and drafting a complete RFP can be a time and resource-consuming process. Often people view RFP processes as cumbersome, bureaucratic, and quite frankly not worth the time and resources they invested. Sometimes the RFP process and governance dictates the use of a complete RFP with a full complement of requirements for acquisitions that are medium to small in cost, and the vendors’ capabilities and solutions are not fully understood.

In situations such as the above, a Lean RFP is the right tool for the job. A Lean RFP is just that – a very lean or light RFP that includes the constructs of an RFI while keeping the competitive advantages of negotiating an RFP. This is accomplished by first taking the elements of the RFI that ask suppliers to respond with their capabilities and solutions along with notional or budgetary pricing, then asking two to three vendors to provide a demo of their solution. After that is completed, you can begin negotiating the best solution, pricing, terms, and conditions to achieve the optimum value for the best solution.

Before we go any further, let’s explore how to handle the contract with a Lean RFP. First, let’s assume your organization does not have its own contract. There is no right or wrong way to get the contract. If you are confident that the demo will not alter the requirements in the Master Agreement, you can ask for their contract as part of the submission. If you think the alignment on requirements, risk, and obligations as a result of the demo will impact the Master Agreement, you can request the contract after the demo as part of the next phase of your evaluation while reenforcing that your review of the terms does not constitute a selection. Alternatively, if you have your own Master Agreement and will require the supplier to execute it if selected, then consider providing your Master Agreement in the Lean RFP with the request that the supplier return it with a signature or comments.

Using a simple and high-level evaluation process, the team will then evaluate the proposals with the goal of deciding which two or three of the suppliers they want to bring in for demonstrations and Q&A. During these discussions, the team should ask the suppliers to share:

• Their view of the marketplace.
• A demonstration of their understanding of the problem.
• An explanation of their capabilities and competencies.
• How their solution solves the problem.

Once that is complete, evaluate the quality of the supplier’s resources and consider how well the teams will work together. After selecting the two best solutions, move on to negotiating pricing and the contract. This maintains the competitive nature of negotiation during the entire process.

The following seven steps depict a high-level process for a Lean RFP:

1.   Create an RFI with all the normal and customary components.

2.   Add a few additional RFP-like requirements (e.g. operational, technical, and legal requirements).

a)   Make sure you include a request for budgetary pricing and provide any significant features and functionality requirements so they have enough information to propose solutions.

3.   Allow vendors to ask questions through a single point of contact and share answers with all the vendors.

a)   Notify vendors that you will not be doing an RFP.

4.   Review proposals and evaluate them against your requirements along with the vendors’ notional or budgetary pricing.

5.   Have the evaluators use an evaluation scoring template to record their scores accordingly.

6.   After collecting the scores from the evaluators, consolidate the scores together to discuss which vendors – we recommend two or three – you will ask to present demos.

7.   Based on the vendors’ demos, select at least two vendors and begin negotiating the contract and pricing terms with the intent of selecting the best-value vendor.

Concluding Power Thoughts:

• Use the suppliers’ willingness to negotiate terms and conditions as part of your evaluation process.
• Leverage the Lean RFP to obtain a fair market competitive price while meeting your internal clients’ aggressive timelines.
• Leverage the Lean RFP Template in our blueprint Drive Successful Sourcing Outcomes With a Robust RFP Process.
• The Lean RFP shortens the typical RFP process.
• The Lean RFP maintains leverage for your organization.
• Use the Lean RFP for low- to medium-speed items (however your organization defines them).
• The Lean RFP will give you clarification on vendors’ competencies and capabilities.

This article is adapted from Info-Tech’s research Drive Successful Sourcing Outcomes With a Robust RFP Process and Info-Tech’s book on RFPs, The Art of Creating a Quality RFP.

To learn more about the RFP process, check out:

Drive Successful Sourcing Outcomes With a Robust RFP Process

In a Hurry? Consider a Lean RFP