Is the RFP process obsolete?

March 8, 2009

Traditional sourcing methods generally follow the process of identifying needs, searching for build versus buy solutions, deciding on the best “approach”, short listing providers through the RFI (Request For Information) process, and summarizing the needs into a RFP (Request For Proposal).  Once the RFP is created, then there is the time consuming workflow of sending the RFPs to the short-listed providers, gathering their proposals, evaluating them, interviewing a sub-set of the selected providers, and eventually contracting with the selected provider.  Besides consuming significant resources, this process can take months.  Portals, templates, and pre-built workflows help accelerate the process, but the savings are not significant.  Is there an alternative?

Before we look at alternatives, there are two key aspects of the traditional procurement process:  One, most of the RFIs, RFPs and proposals back from providers are boiler plates (studies have shown that over 70% of it is “cut and paste” content), and Two,  this process is onerous for commodity services where just a few key questions can establish the costs and selection of providers.  Small to Mid-Sized Businesses (SMBs), in particular, seek these streamlined alternatives. 

One attractive approach is to assemble the key questions which help establish the scope of the engagement and selection criteria.  Expert systems and models can help identify the top providers who best fit the engagement.  Adopting these techniques on-line can accelerate the procurement process at reduced costs.  The web-based work flow would include the following key steps:

  • Identify project type
  • Develop questionnaire to capture requirements
  • Send filled out questionnaire to pre-screened Service Providers
  • Analyze responses and best-fit select Service Provider
  • Facilitate contracting between SMB and selected Service Provider

The web-based work-flow in itself accelerates the procurement and reduces procurement costs.  However, to get signficant benefits, it is necessary to have a pre-credentialed group of Service Providers.  This will accelerate the short-listing process.  The web-based workflow, on-demand sourcing,  and a organized classification of pre-credentialed Service Providers will save SMBs over 80% in selecting and contracting with the best-fit vendors.

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