ABSTRACT SUMMARY:
RFP Process, Vendor Selection and Management - Abstract
By: Mark Verone
Introduction/Overview: For many, the RFP process of vendor evaluation and selection can be daunting and mundane. This article is designed to provide some perspective of a system designed out of necessity and refined to provide an objective methodology for dealing with vendors. The ultimate goal is to ensure that your requirements are being met while being fair and objective to the vendor.
Purpose: To provide a best practice methodology for vendor evaluation, selection and management in a 10-step process.
What you can get out of this: This article is designed to provide you firsthand insights from an experienced marketing technologist and operations expert-written to help you create a new vendor management process or enhance an existing one.
ARTICLE INTRODUCTION:
When it comes to marketing technologists or marketing automation and operations teams, we tend to act as a sort of "jack of all trades" role. We wear many different hats and work with several different types of systems which means we work with different types of vendors. One of the roles is to select the right vendor as part of the vendor management lifecycle. Some companies are more sophisticated when it comes to vendor selection and management and others figure it out as their needs and requirements evolve. For the latter, I am sharing this so other can learn from my experience. For most of my career, I have been deeply involved in the vendor selection and management process. It forced me to develop a system to manage and track vendors to ensure we are consistently achieving the requirements of the business.
I am fortunate to have worked for several companies that had stand-alone purchasing or procurement teams. Sometimes this function is referred to as "sourcing" or "acquisition" which is often all part of the overall supply chain management function. The Council of Supply Chain Management Professionals (CSCMP) defines procurement as "the buy process focuses on the purchase of required raw materials, components, and goods." This includes services, software, and platform(s) when dealing with technology vendors. While many might see that procurement is a hassle, I enjoy working with procurement because it affords me the opportunity to maintain a healthy, highly professional relationship with our suppliers and vendors. I tend to play the role of "good cop" while the procurement team plays the role of "bad cop." The truth of the matter is your procurement team doesn't need to be the SME of every aspect of your business. They serve a purpose to ensure the company is getting the best pricing and working with the best vendors to serve your needs.
I have been in several situations where vendors have discontinued a service or sunset technology requiring us to find an alternate vendor. Working with a procurement team allows me and my team to still be the SME on our products and requirements while the procurement team focuses on ensuring the process is fair to all participants. Being fair in an RFP process ensures that there is consistency in how you develop the RFP. You should be asking the same questions to all vendors and the evaluation criteria and scoring of the response should be done in a manner that is objective and without bias. Often, Sales and Business Development folks will do their best to shower you with affection in the form of "perks'' and "incentives'' to create champions among decision-makers, whether it's lunch or dinner or tickets to sporting events. Of course, these days during a global pandemic, they would need to be more creative with those incentives and I have seen everything from Uber Eats and DoorDash certificates. I am not a fan of the loose form of bribery that exists here. This is not what you are buying. This is about a professional relationship. You are in the market to make a purchase for a specific reason and need. Many companies have strict policies on accepting "gifts" from vendors and I certainly hope that people are not making buy decisions off lunch or tickets. The buying process must be objective, and the criteria must be the same for all that participate.
The vast majority of us don't have the luxury of a procurement and/or supply chain management team dedicated to vendor management. Therefore, this function generally falls back on the business units leading the vendor selection and vendor management procedure. The advantage of not having a formal procurement department is you ensure the vendor’s solution is directly tied back to the requirements of the business unit and designed to provide objective evaluation and scoring of the vendors. There is also plenty of room for discussion and debate and subjective discussion. One vendor might check all the boxes and lead the scoring criteria but then get pulled from the consideration set due to a negative experience during the RFP process. I had one situation where a sales engineer from a vendor got into a heated debate with our technical team over philosophical differences in methods. Both sides were right but had different approaches. This kind of tension immediately turned off my technical team. I have had other situations where the vendor was scoring lower than the others but won the award because they challenged our requirements by demonstrating a more efficient way to solve our problem. They won because they were not comfortable saying yes to something, they felt was inefficient. They won because we collectively liked a vendor willing to take a risk and show us a better way. I have had other situations where vendors agreed to participate and then pull out of the RFP process after they received the RFP. The point is this is not all scientific and while we attempt to be as objective as possible there is always room for a degree of subjectivity.
To attain transparency and the greatest possible objectivity with all vendors, I developed a set of criteria along with an RFP template that levels the playing field for all vendors to fairly bid on the business. This process is designed to produce an outcome that benefits you and the company you represent as the end customer. At the same time, it provides all of the criteria upfront so the vendors who choose to bid on your project have a very clear roadmap of your requirements and process for vendor selection. This part is the most critical and feedback from vendor sales teams and vendors has been overwhelmingly positive because it makes bidding and responding to the RFP much easier than if they had to guess or provide information that was not important to your requirements.
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