Future of Sourcing - RFx (Request for Proposal) https://futureofsourcing.com/tags/rfx-request-for-proposal en Tips for Managing a Successful Competitive Bid https://futureofsourcing.com/tips-for-managing-a-successful-competitive-bid <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://futureofsourcing.com/sites/default/files/articles/Competitive%20Bid.png"><a href="https://futureofsourcing.com/sites/default/files/articles/Competitive%20Bid.png" title="Agile 4 Step Procurement Methodology" class="colorbox" rel="gallery-node-1902-pgf5fOyGB70"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Competitive%20Bid.png?itok=SCuznxOI" width="624" height="325" alt="Agile 4 Step Procurement Methodology" title="" /></a></div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/covid-19-highlights-procurements-continued-need-to-evolve-and-become-more-agile-and-resilient">COVID-19 Highlights Procurement’s Continued Need to Evolve and Become More Agile and Resilient</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>Agile 4 Step Procurement Methodology, developed through decades of experience, delivers practical and sustainable results. It is a method our clients find valuable and one we use internally for our projects, too. Practice what you preach!</p> <p>Imagine you have a competitive bid to run. You have completed your planning and research, gathered your requirements, performed a marketplace assessment and determined your sourcing strategy. You are ready to move forward with the competitive bid. With so much to do, how do you stay organized and what are the next steps?</p> <p><strong style="font-size: 13.008px;">Project Plan</strong></p> <p><span style="font-size: 13.008px;">At this point, it is critical to create a detailed project plan. You may have already begun one earlier in the project, and if you have, great! If not, now is the time.&nbsp;</span><span style="font-size: 13.008px;">The project plan will outline your project&rsquo;s essential elements and activities. Assign realistic dates and timelines to each activity and determine who is responsible for each. Internally, review any conflicts within the organization such as staffing issues, blackout dates, holidays, other conflicting projects, etc.&nbsp;</span><span style="font-size: 13.008px;">Confirm key project members have reviewed the timelines and approved them before moving forward. Your project plan will keep you on track and focused.</span></p> <p><strong>&nbsp;Determine Evaluation Criteria&nbsp;</strong></p> <p><span style="font-size: 13.008px;">How will you evaluate the suppliers&rsquo; responses to your competitive bid? This should be completed BEFORE you launch the competitive bid or, at the very least, before responses are due back.</span></p> <p><span style="font-size: 13.008px;">There are multiple reasons for this approach. First, you want to ensure you have outlined what is most important to your organization. What are you looking for in a response that will determine the success of a supplier&rsquo;s response?</span></p> <p><span style="font-size: 13.008px;">Set up evaluations so they can be scored easily. For instance, use a rating scale of 1 &ndash; 5 and determine for each question what kind of response would warrant a 1 vs. a 3 vs. a 5, etc. Ideally, set up questions that can be answered with a yes/no or a drop-down selection and assign weights to each of those. If done correctly, most responses will be scored mathematically and quickly.</span></p> <p><span style="font-size: 13.008px;">Second, by determining the evaluation criteria and scoring ahead of time you ensure a fair and unbiased process that can be audited. Should an unsuccessful supplier question the outcome of your competitive bid, you will have the information to back up your results and prove there was no bias.</span></p> <p><span style="font-size: 13.008px;">Do not wait for responses to come back before determining your evaluation criteria! This is poor procurement practice and may lead to a lawsuit if you are questioned by a participant.</span></p> <p><span style="font-size: 13.008px;">Finally, determine who is evaluating which parts of the competitive bid and confirm they are committed to doing so when the time comes. Technical aspects should be evaluated by your technical lead, financial by the finance lead, etc. Subject matter experts (SMEs), such as cyber security, may be called in for their specific expertise.</span></p> <p><span style="font-size: 13.008px;">Procurement is the quarterback responsible for overseeing that all players are performing their critical role. In some cases, the pricing provided for each supplier may be held back and only reviewed once the other parts of the responses have been reviewed and scored. This safeguards against being swayed by the pricing of any given supplier. It&rsquo;s up to the procurement lead to determine the best approach for the event.</span></p> <p><strong>Manage the RFx (Competitive Bid)&nbsp;</strong></p> <p><span style="font-size: 13.008px;">Now you are ready to assemble your competitive bid and send it out! The procurement lead should manage this step to guarantee a fair process. During this time, stakeholders should not communicate with any of the participating suppliers. All communication should go through the procurement lead.</span></p> <p><span style="font-size: 13.008px;">Typically, at ProcurePro we include major sections in our bid documents such as corporate overview, requirements, legal terms and conditions, pricing, etc. We also include questions and sub-sections within each of those sections.</span></p> <p><span style="font-size: 13.008px;">Depending on the type of event, you may consider adding a copy of your agreement for the suppliers to review and provide redlines as part of their response. You may ask for a completed statement of work or implementation plan as well as resumes or profiles of any contingent labor they may be providing.</span></p> <p><span style="font-size: 13.008px;">Within your bid documents, outline a schedule of events for all major deadlines. This is usually its own section and is typically one of the first sections the suppliers should review. Your key stakeholders should review the bid documents and sign-off on them before you distribute them to suppliers. Confirm everyone is aligned and understands what is being included in the package being sent to suppliers.</span></p> <p><span style="font-size: 13.008px;">Whether using a sourcing tool or launching manually, the competitive bid should become available to all participating suppliers on the same day and time. You should also give advance notice of when they can expect it.</span></p> <p><span style="font-size: 13.008px;">Following the launch, confirm that it has been received and suppliers can access all information accordingly. You may want to request that suppliers provide their intent to participate after they have reviewed the documents so you know from whom you should expect responses.</span></p> <p><span style="font-size: 13.008px;">You will also want to provide suppliers an opportunity to ask questions. Suppliers should be asked to submit all questions in writing on the same date and time. The procurement lead will consolidate all questions and facilitate having key stakeholders provide answers. Consolidated questions and answers should be anonymized (scrubbed clean of any supplier names) and sent back to all suppliers at the same time, again to guarantee a fair process.</span></p> <p><span style="font-size: 13.008px;">When you set up deadlines for the competitive bid, do not assume suppliers will work weekends and holidays. Leave enough time (based on the length and detail you are requesting) for suppliers to respond. If you rush the process, suppliers may drop out or provide sub par responses. Remember, your objective is to find the best overall solution, not a fast response.</span></p> <p><span style="font-size: 13.008px;">Finally, some suppliers may request extensions to your submission deadline for any number of reasons. Generally, an extension is only granted if more than one supplier has requested it (that may indicate you have not granted them enough time), for a valid reason and if asked early in the process. An extension should not be considered if a supplier is asking a few days before responses are due. To remain fair, extensions must be granted to all suppliers.</span></p> <p><span style="font-size: 13.008px;">Again, remember the intent is the best solution. Consider carefully if the extension is warranted. Take into account that other suppliers have put in their best efforts to hit the deadline.</span></p> <p><strong>Supplier Workshops or Presentations&nbsp;</strong></p> <p><span style="font-size: 13.008px;">You would have determined in the project planning phase whether your team felt supplier workshops or presentations were necessary. Key dates for these would have been listed in the competitive bid to suppliers and dates should have been held internally (and rooms booked) for key stakeholders who would need to attend.</span></p> <p><span style="font-size: 13.008px;">Supplier workshops and presentations are useful for many reasons. Both give your organization a chance to meet with the supplier you may potentially select. Ask, where possible, that suppliers bring key personnel with them for their presentations so the project team can get a sense of personalities and determine whether they have the right &ldquo;fit&rdquo; for their organization. It also gives you an opportunity to ask the suppliers additional questions, go through parts of their response in detail, or see a demo of their product or service. It also provides suppliers with an opportunity to ask you questions.</span></p> <p><span style="font-size: 13.008px;">The difference between a workshop and a presentation is that the workshop is intended to be more collaborative and iterative. It may lead to a revised proposal or improved solution now that the supplier has had a chance to &ldquo;workshop&rdquo; with the client. Normally, it is only used when a complex solution is needed and can ultimately save you time.</span></p> <p><span style="font-size: 13.008px;">You never want to get to an award only to discover the supplier missed the mark completely and you need to fall back on another supplier or be forced to start from square one. It happens more often than you think.</span></p> <p><span style="font-size: 13.008px;">Always set an agenda in advance and give suppliers ample time to prep. Be clear on what you would like to see from suppliers. All suppliers invited to participate should be given the same amount of time and all key stakeholders from your organization should be available for all sessions with all vendors. They cannot pick and choose which to attend.</span></p> <p><span style="font-size: 13.008px;">Workshops and presentations should be evaluated, and all suppliers should be assessed on the same criteria (again, determined in advance). Complete scoring during or immediately following the sessions. As a best practice, each person scoring must submit their scores before the next session occurs.</span></p> <p><strong>Supplier Recommendation&nbsp;</strong></p> <p><span style="font-size: 13.008px;">Once all sessions are complete and final submissions (in the case of a workshop) are received, it is time to pull all the information together in a final recommendation.</span></p> <p><span style="font-size: 13.008px;">In a formalized recommendation, outline your journey to this point, e.g., dates, suppliers, key decisions that were made along the way, selection criteria, final evaluations for each supplier and their presentations, as well as what your final recommendation is and why. Show the math that supports your recommendation, highlight key differentiators between the successful supplier and those that did not make the cut. This deck tells a story &mdash; where you started and how you got to the final decision.</span></p> <p><span style="font-size: 13.008px;">If your organization is ever audited or your process called into question, you will have this consolidated deck which outlines the entire project and how you arrived at the final recommendation.</span></p> <p><strong>Go/No Go Decision</strong></p> <p>This is a critical final step and an opportunity to bring the project team, stakeholders and executives back together to summarize the results from the competitive bid (see above).</p> <p>Do you have enough information to make a decision? Is everyone aligned? At this point you will want to gain some formal acknowledgment on the decision to either move forward (GO!), end the project (NO GO!) or go back for further information.</p> <p>I hope you have found this article helpful and that these tips can serve as a road map for your next competitive bid.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/procurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procurement</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/bid-stratgy" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Bid Stratgy</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/rfx-request-for-proposal" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">RFx (Request for Proposal)</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/supplier-negotiations" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">supplier negotiations</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/sourcing" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Sourcing</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Tips for Managing a Successful Competitive Bid - Future of Sourcing" addthis:url="https://futureofsourcing.com/tips-for-managing-a-successful-competitive-bid"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Wed, 30 Dec 2020 20:09:25 +0000 Susan Mercer-Tumilty 1902 at https://futureofsourcing.com https://futureofsourcing.com/tips-for-managing-a-successful-competitive-bid#comments Sourcing a New Contract-Centric Approach https://futureofsourcing.com/sourcing-a-new-contract-centric-approach <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://futureofsourcing.com/sites/default/files/articles/Contract_Centric_Approach_0.jpg"><a href="https://futureofsourcing.com/sites/default/files/articles/Contract_Centric_Approach_0.jpg" title="Sourcing a New Contract-Centric Approach" class="colorbox" rel="gallery-node-1401-pgf5fOyGB70"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Contract_Centric_Approach_0.jpg?itok=B33HFlTD" width="624" height="325" alt="" title="" /></a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <div>In today&rsquo;s fast-paced business environment, sourcing and procurement departments are often left in a difficult position; they are required to become quicker and more proficient when it comes to sourcing the essential direct and indirect materials their companies need to do business, but saddled with a source-to-settle process filled with risks and inefficiencies. &nbsp;&nbsp;</div> <div>&nbsp;</div> <div>Currently, securing a vendor is a multi-step process that is not only time-consuming, but also opens the business up to risk and leakage. In a typical situation, the buyer begins the process by issuing an RFx (Request for: information, proposal, quote or bid), and then evaluates vendors who in turn respond on two main criteria: technical and commercial capabilities. Finally, they negotiate a contract and, hopefully, agree on terms.&nbsp;</div> <div>&nbsp;</div> <div>The current sourcing paradigm is falling short of modern business needs, costing enterprises precious time and money. The first problem lies in non-compliance with internal company standards, which can be attributed to disconnected contract management processes. Such a divide can also be a major source of leakage for companies &ndash; McKinsey and Company estimates that about 3.5 percent of spend is lost in the source-to-settle business process.&nbsp;</div> <div>&nbsp;</div> <div>Second, without a clear means or solution to manage contracts, many are often introduced too late. Typically, only after a letter of intent (LOI) is issued does contract language begin to be negotiated. This means that the negotiation process of additional clauses between buyer and seller can slow or even derail the sourcing process. By introducing contracts at the very beginning, when clauses are agreed upon from the start of any discussion or negotiation, long delays can be prevented,&nbsp;</div> <div>&nbsp;</div> <div>Another roadblock can be a lack of visibility into and understanding of contract performance. As part of any procurement decision, it is normal for an organisation to review a contract&rsquo;s past performance. However, the data to uncover these critical insights can often be scattered across an organisation and not easily accessible, causing delays in the process.&nbsp;</div> <div>&nbsp;</div> <div>The old processes that have long been accepted as the standard, can quickly become a liability as the pace of commerce accelerates. Making sourcing a contract-centric process though, presents a real opportunity for organisations to take control of their sourcing. Contract-centric sourcing is the new paradigm that enables sourcing organisations to both accelerate their buying processes, improve compliance and reducing leakage. By combining digital contracts and processes with artificial intelligence, companies can transform the foundation of their sourcing process. &nbsp;&nbsp;</div> <div>&nbsp;</div> <div>This has many advantages, which address some of the key pain points and inefficiencies that plague companies running legacy or non-digital sourcing processes. By making contract compliance the third pillar by which vendors are evaluated alongside technical and commercial capabilities and introducing <a href="https://futureofsourcing.com/a-clear-understanding-of-outcome-based-contracts" target="_blank">contracts</a> at the very beginning of the sourcing process, businesses can better ensure compliance with buying standards, accelerate sourcing evaluations and gain visibility into past contract performance data. This in turn enables enterprises to create a category strategy that will deliver the most long-term benefits to the company. &nbsp;</div> <div>&nbsp;</div> <div>The process works as a follows: the buyer crafts the right RFx for their business needs to present to prospective vendors via a digital contract management platform, complete with the contract language they would like to agree on. The vendor then redlines the contract based on their own needs and requirements and the two parties are then able to negotiate.&nbsp;</div> <div>&nbsp;</div> <div>The benefit is that buyers are able to evaluate how much contract negotiation will be required before choosing a preferred vendor and issuing an LOI. And with the help of artificial intelligence, the buyers can compare vendor redlines and determine which represent acceptable changes and which are red flags. Connecting this process to past contracting and negotiation data allows buyers to get the best results from their sourcing efforts. The core benefit of the whole process is visibility.&nbsp;</div> <div>&nbsp;</div> <div>By making contracts central to <a href="https://futureofsourcing.com/exploring-on-demand-purchased-service-solutions" target="_blank">RFx and selection processe</a>s, businesses can bring the contract negotiation data and other vendor information to one easily accessible, central platform, as opposed to it being spread out across multiple email inboxes and in different departments and organisations. Sourcing departments that integrate contract management benefit by gaining a huge wealth of data about a vendor&rsquo;s past negotiation strategy and behaviour, in addition to how well they perform against contract language. This is powerful data that hasn&rsquo;t been fully leveraged in the current paradigm, now available in one place. &nbsp;</div> <div>&nbsp;</div> <div>The business world is changing. It&rsquo;s no longer enough for procurement organisations to balance risk with accelerating business; they need to find ways to actually reduce risk and accelerate the pace of business themselves. Contract-centric sourcing provides a new approach that drives value and improves efficiency of the sourcing process. &nbsp;</div> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/contract-construction" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Contract Construction</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/rfx-request-for-proposal" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">RFx (Request for Proposal)</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/procurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procurement</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/sourcing" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Sourcing</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/risk" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Risk</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Sourcing a New Contract-Centric Approach - Future of Sourcing" addthis:url="https://futureofsourcing.com/sourcing-a-new-contract-centric-approach"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Fri, 08 Mar 2019 21:16:03 +0000 Vivek Bharti 1401 at https://futureofsourcing.com https://futureofsourcing.com/sourcing-a-new-contract-centric-approach#comments