Are Your RFPs Failing? The Problem Lies in the Technical Evaluation Phase

The landscape of Procurement Negotiations has changed drastically. Most of the conventional methods of Sourcing are increasingly becoming obsolete. Here are some actual facts about your broken procurement processes:

Case of Request for Proposal (RFPs) : 

During the initial phase (i.e, Technical evaluation), Procurement teams often take a backseat on purpose. They assume the commercial negotiation will only start once the technical phase is over. This approach is extremely short-sighted and Lazy. 

The real negotiations (if you are running an RFP) are happening while designing the scope of work (or business requirement or technical evaluation criteria) phase. 

 While the lazy Procurement teams run around with the notion of battling out "best price" during Commercial rounds, vendors often engage/influence their technical counterparts during the scoping phase itself. This is where modern-day Procurement teams are engaging and negotiating.

This is why RFPs are becoming more and more obsolete.

Supernegotiate believes RFPs are 90% admin and only 10% value in the current scenario. RFPs served their purpose. They were created during the 1960s phase, when industrialization was at its peak and it demanded standardization of requirements.

In the current age, where requirements are complex, standardization is no longer possible. Especially when you combine cloud-based, SaaS/PaaS-driven requirements, compiling a detailed line-by-line scope of work document makes no sense. The most innovative companies (and startups) do not respect your bureaucratic RFP processes and have no time and resources to commit to them if RFP processes take 4- 5+ months or more.

Long RFP cycle time only favours your current vendors and big companies. 

The best-in-class solutions/ innovation companies won't be participating in your dull RFP processes.

In summary, if you are planning to run an RFP, ask your Procurement teams to start negotiations during the scoping phase itself. Combine Technical and Commercial evaluations into one. And please, conclude your RFPs in less than 3 months. 

This brings my point of Category managers being the domain experts in their respective fields. You can not afford to hire category managers who don't know the intricate granular level technical details of their category. Like Supernegotiate mentioned, Negotiations are being done on the Technical Scoping stage and not the commercial stage. 

In 2025, it is much more sensible to automate the operation of just collecting 3 quotations and selecting the cheapest vendor. You do not need a category manager to do this for you manually.

Design your top-performing Procurement Centre of Excellence setups by laying correct processes according to 2025 conditions and not obsolete conditions.

Here are some of the cycle times you should be aiming to achieve in 2025

New Style RFPs: Cycle time: 30-40 days

RFQs: 3 Days (1st phase to be negotiated by Bots)

Everything else should be 100% automated.

Thoughts?