The Request for Proposal (RFP) process is the key to identifying and launching successful partnerships for your business. So why do they generate internal frustration, mismatched expectations and high levels of dissatisfaction amongst issuers and respondents alike?
Bâton Global has extensive experience in managing the RFP process on behalf of clients to deliver strategic alignment, transparency of process and market beating financial terms. What are some of the common challenges with executing a successful RFP process and how can they be effectively mitigated?
Partner organizations have their own established sales processes, incentive programs and approval processes that will not align with your internal interests. Further, they will vary from partner to partner. The net result is that you will be interacting with several effective sales professionals who will be angling to have you run the process on their terms.
A successful RFP process will embody the needs of the organization in such a way as to mitigate the detrimental impacts of asymmetry. Issues can arise where the issuer is conducting an RFP for an area in which they lack expertise. Far from being uncommon, this is a principal motivation for the issuance of an RFP in the first place - firms wishing to partner in new areas or to improve upon processes performed sub-optimally in-house. Prospective partners will often try to close a deal in advance of the details of the partnership having been fully explored. This is to the detriment of the issuing firms ability to secure the best financial terms.
Successful RFP processes employ a combination of externally sourced market information and an iterative RFP process over multiple, brief stages to combat asymmetry and ensure positive financial terms.
The attractive concept of partnership is often invoked by respondents to an RFP. And firms must be mindful that short of a legally defined joint venture, the engagement will take the form of a vendor providing services in a subcontractor capacity. Often, the sales function responding to an RFP is separate and distinct from the actual service providers with whom you will be working. Gaining clarity during this process about the actual nature of the proposed partnership is an important feature of an iterative RFP process.
Although the stages of the iterative RFP can be customized for specific engagements, they would all compete with the nomination of the vendor in parallel with the legal agreement to ensure that the process integration of the new vendor can be done seamlessly.
A typical RFP challenge is that multiple respondents provide their information in a format that is standardized to them and their needs – not yours. This complicates clear comparisons across prospects and increases the analysis required upon your resources. Bâton Global’s iterative RFP process anticipates such data challenges and in fact encourages them.
By adopting a cycle where higher-level data is requested initially, the different business models and advantages of the potential partners can be deduced through their different responses. This will often lead to a reformulation of the next stage data request – often a superior vendor will inform a deeper understanding of the service desired when they are allowed to respond initially in their own voice. By employing a process that encourages continual learning, Bâton Global can ensure the optimal outcome in evaluative measures.
Partnership agreements can be the source of internal challenges that can compromise your firm’s integrity and deliver poorer than expected financial results. Leveraging Bâton Global’s expertise in this domain ensures best-in-class practice while protecting the ethical interests of your business.
Bâton Global’s clients have realized superior financial terms, improved transparency in evaluation, better organizational transformational outcomes and reduced risk through our iterative RFP approach.