Stakeholder RFP Management – Relevance And Improvement Tips

Request for Proposal (RFP) is a critical step for supplier sourcing. For high-value purchases, choosing the right vendor that brings value to your business at an affordable cost is important. Buyers compare price, features, quality, and functionality to shortlist potential vendors. Unfortunately, even though RFP is important for procurement, your stakeholders won’t be excited about it. Do you have your employees constantly wondering whether an RFP is required for purchase? It simply means that your RFP is tedious, and the stakeholders might try to avoid it any chance they get.

RFP Challenges For Stakeholders

As per the Deloitte survey, only 61% of the participants believed that their procurement solution was somewhat effective in delivering value to stakeholders. Therefore, unless the wants and needs of stakeholders are managed, the procurement process will suffer. Stakeholders in the procurement process are broadly classified as

• Internal stakeholders – budget owners, finance team, legal team, and senior management
• External stakeholders - suppliers and other third-party vendors

For successful supplier sourcing, the RFP process must be initiated and followed through by all the stakeholders. Input from multiple stakeholders will help redefine the RFP process to make it more suitable for organizational goals. However, stakeholders often face challenges with the existing RFP process:

• Expensive and Difficult RFPs– Do your employees arbitrarily choose suppliers from an old list because they think RFP is arduous? If the answer is yes, your organization will fail to realize cost savings. If internal stakeholders use spreadsheets and emails to communicate with suppliers for RFP, they will feel overwhelmed by all the manual processing. In many organizations, starting RFP is an expensive process in itself. Your employees may find it difficult to justify RFP for certain supplies.

• Lack of RFP Experience – RFP is useful only when your internal stakeholders know the right questions to ask. Preparing a proposal needs domain expertise, and some procurement leaders may not train their team to find answers easily. RFPs that don’t add value to the supplier sourcing process end up wasting stakeholders’ time. Outdated and long RFPs make the process difficult for everyone.

* Lack of Communication and Collaboration Between Stakeholders – Stakeholders are often only interested in their needs, resulting in impulsive purchase decisions. Without proper communication and collaboration between the stakeholders, the procurement process can’t be optimized. Suppliers who don’t immediately respond to RFPs further increase the procurement time.

• Disengaged vendors: Manual RFP processing requires your employees to wait for vendors to respond. Vendors do not prefer lengthy RFPs and may want to go with buyers who already have established supplier relationships. Your organization should not choose a supplier only based on the vendor-supplier relationship. The E-procurement process can greatly simplify the RPF process by boosting vendor engagement.

5 Tips To Improve Stakeholder Management In RFP

The main purpose of RFPs is to collect information from suppliers and vendors about the quality of service they are willing to deliver. It is one of the initial steps of the procurement process workflow. Here are some simple tips to make it easier for stakeholders to use RFP.

1. Encourage Stakeholder Participation

The right questions can be asked to suppliers only if all the stakeholders offer their input on what information is needed from suppliers. All the users of the RFP should be comfortable with the process and be motivated to use RFP as and when required. This is possible by cutting down lengthy questionnaires for RFP. Only essential information from suppliers must be collected in the beginning to shortlist them.

2. Review Procurement Policy

While RFP is required, your procurement policy dictates when RFP must be issued. Is your procurement team spending more time on RFP than creating essential supplier relationships? Then it means you have to increase the procurement threshold for RFP. On the other hand, it will help you streamline procurement policies for high-value and low-value purchases.

3. Improve Collaboration

The procurement team must be willing to collaborate with all stakeholders to make the process hassle-free. With a lean procurement team, everyone will be busy. This is where ERFX will benefit your organization. All the stakeholders can communicate and collaborate effectively using the single-window interface, and the procurement team will have all the information they want from a unified data silo.

4. Focus on stakeholder satisfaction

While businesses always focus on improving supplier relationships, often, internal stakeholders are left vulnerable. To make the RFP process efficient, all the stakeholders must be satisfied that the organization hears their needs. Balance urgent procurement requirements with RFP requirements ensure that your internal stakeholders meet their needs without going through a strenuous process. An integrated procurement solution will offer this flexibility to change procurement policies dynamically.

5. Use e-procurement powered by technology

A technology-driven procurement solution is the best way to overcome stakeholder challenges. Implementing eRFX using procurement software will ensure that your RFP requirements are met while the stakeholders are freed of manual tasks. In addition, automation will help your procurement team to focus on essential tasks to ensure higher productivity. A unified platform for suppliers is also useful for improving supplier management because suppliers can easily adhere to procurement deadlines.

Conclusion

Procurement software will help you establish an enterprise-wide stakeholder management policy. It will improve the RFP process results and boost stakeholder engagement. When data is readily available and suppliers respond quickly, your procurement team need not deal with multiple emails and spreadsheets. It will encourage them to use RFP more because the automated process simplifies their task.

Procol is the industry’s best procurement management software that has helped its clients save billions of dollars within a few months of automating the procurement process. Call us now to schedule a demo of how our procurement software can help your organization effectively manage all the stakeholders.