As a company, we have been responding to briefs in all forms, including RFPs (Request for Proposal) for over 15 years, so we’ve seen the good, the bad and the ugly side of the vendor selection process. Knowing what you need help with, and choosing the right vendor, is probably the most pivotal decision our clients will make in determining their product's success.

Bad RFPs are one of the most costly and damaging things in our industry, to both vendors and clients.

In recent years we’ve increasingly been involved in helping our clients select the right partners to collaborate with, and we’ve looked at the factors that are key in the selection process. 

In this series of articles, we share our learnings about effective RFPs with the aim to help readers  establish better partnerships.

Decoding the RF(x) alphabet soup

RF(x) - whether that be a Request for Information, Proposal, Tender, or Quotation, it signifies a structured procurement process from organisations looking for products  and/or services. The aim is to understand more about vendor offerings and allow for comparison. For vendors, each type of request requires a tailored approach, and differing preparatory effort.

We’ve put together a comparison table summarising the various types of RF(x) procurement processes and what they entail:

RFI - Request for Information

The RFI phase in procurement seeks market information when the business problem is unclear or in early stages. No approved project or budget is required at this point. It's akin to 'window-shopping’, allowing research on potential vendors. Vendors can respond comprehensively, showcasing their capabilities, which is the foundation for a productive procurement journey.

During the RFI, financial details may be unknown, but inquiries about financial models are common. Stakeholders gain insights into a vendor's financial orientation, aiding alignment with procurement strategy. RFIs can also assess a project's financial viability, supporting internal funding requests by outlining costs, benefits, and ROI.

The vendor response format often lacks strict guidelines, offering flexibility in document type. Success in an RFI process typically leads to subsequent stages like RFP, RFT, or RFQ, but not usually immediate vendor selection or work.

RFP - Request for Proposal

RFPs, more structured than RFIs, indicate a serious commitment to purchase. They address pressing business problems, and outline the organisation’s shared outlook on  strategic goals. The RFP articulates the problem well, but offers broad brush strokes around potential solutions, as this is where vendors should add their value.

Documenting business problems in an RFP is a great process because it formalises them, and sets the stage for vendors. It is important to stress the significance of consensus within organisations, regarding the problem they are trying to solve, in advance of an RFP. Most of the failures we’ve observed happen when stakeholder alignment is not there before the RFP is issued. The result is wasted time and money for all involved.

Most of the failures we’ve observed happen when stakeholder alignment is not there before the RFP is issued.

While RFPs seem structured, they should allow room for vendors to provide detailed responses and showcase problem-solving capabilities.

RFT - Request for Tender

RFTs are rare nowadays, and when we see them they come mainly from the public sector. They are very similar to RFPs, but unlike RFPs, they don't delve deeply into solving business problems. The problem is often solved already, while still allowing vendor flexibility in proposing solutions. The primary goal is to seek a vendor with the best-fit rather than collaboratively defining a solution, without being quite as rigid as an RFQ.

RFQ - Request for Quotation

Organisations issuing an RFQ have usually invested time defining a solution internally, potentially through previous RFIs or RFPs. RFQs are highly structured, with a specific solution that has been agreed and needs costing. Having helped to shape earlier processes, vendors usually collaborate on the RFQ. 

Unlike an RFP, an RFQ is not about defining the solution. The RFQ aims to validate a vendor’s suitability, align parties and solicit a commercial proposal. 

Why is the RFP such a popular choice for tendering?

An RFP is a key opportunity for organisations to address problems with industry expertise, qualify a shortlist of vendors, and gain technical and commercial guidance for decision-making. It forces decision making. RFP is a great way to get an audience with a vendor’s top resources at no cost; usually vendors will showcase their problem solving skills and approach, when presenting a response. 

Is an RFI the best way to do your homework before embarking on an RFP? 

The RFI process can be helpful, but we feel there is a better alternative approach to help direct the vendor selection process, which we have found very effective. 

Running smaller, rapid R&D projects, aimed at identifying and substantiating specific problems, can help to clarify business and product challenges.

It helps to align internal stakeholders and highlight what the priorities should be when looking for a solution. 

Running smaller, rapid R&D projects, aimed at identifying and substantiating specific problems, can help to clarify business and product challenges.

Often clients have a good steer on the challenges facing their business and the steps they need to take to resolve them. However, even in these instances, insights can play a role to validate ideas and de-risk investment. In other circumstances, insights can just as importantly disprove assumptions or shine a light on something that was not visible to begin with.

Before embarking on an RFP process clients need to be clear on what they are looking for, to qualify vendors well and justify the investment.

Although a small R&D project requires some investment, and usually entails users and a prototype, it can help to deliver faster results. This approach is a swift and attractive option for gaining clarity ahead of an upcoming RFP process.

Vendor selection

It’s important to look for certain indicators when reviewing vendor responses that will help qualify those most experienced in solving similar challenges. This is a helpful list of things to look out for…

• Relevant case studies and testimonials
• Customised solutions
• Industry expertise
• Efficiency and precision
• Proactive problem solving
• Subject matter expertise
• Innovative approaches
• Quantifiable results

Relevant case studies and testimonials

Vendors with relevant experience will likely include case studies or references in their responses. It’s crucial to get these. These real-world examples demonstrate their track record in tackling similar issues successfully.

Vendor submissions may also include client testimonials or references from organisations that have benefited from their solutions in similar scenarios. These endorsements prove invaluable to validate the vendor’s expertise.

Customised solutions

Look for experienced vendors who can provide tailored solutions (or highly configurable products) that align closely with your specific needs and challenges. It’s important that their proposals demonstrate a deep understanding of your industry, business model, and unique pain points.

Industry expertise

Vendors who have solved similar problems typically possess industry-specific knowledge. It’s extremely helpful that they can speak to industry best practices and regulations that are relevant to your situation.

Efficiency and precision

It’s important that their responses exhibit a high degree of efficiency and precision in addressing your requirements. This reflects their familiarity with the problem-solving process and their ability to articulate a clear, practical approach.

Proactive problem-solving

Look for the experienced vendors who  proactively identify potential challenges or issues related to your project and offer solutions or mitigation strategies. This proactive approach demonstrates their problem-solving capability.

Subject matter expertise

Identify the teams that feature subject matter experts who have a deep understanding of the specific challenges you're dealing with. These experts can provide valuable insights and guidance.

Innovative approaches

Seek out the seasoned vendors who propose innovative approaches or technologies that have worked well in addressing similar problems for other clients. This suggests a commitment to staying at the forefront of their field.

Quantifiable results

Explore whether their responses include quantifiable results or metrics achieved in previous projects, showcasing the tangible benefits they've delivered to clients with analogous challenges.

Summary

Investing effort in crafting a well-structured RF(x) process brings substantial benefits; ensuring precision, thoroughness, and control, limiting the time it takes to choose a vendor and improving their qualification.

Vendor selection isn't limited to new projects; it also applies to improving existing services. Whether you're new to RFPs or refining your approach, Ostmodern can help equip you with the knowledge to navigate these processes efficiently, and contribute to your success. Get in touch.

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