I think the greatest obstacle in the RFP process is the lack of honesty on both the supplier and buyer side.
We are currently running an RFP for a global TMC, and at the start of the process I offered every interested supplier a one-hour briefing session, when I told them about the business, existing contracts, things that were and weren’t working and what we were looking to achieve.
People said they appreciated this, because a lot of companies will not share that information.
I was very surprised to hear that. I don’t understand why buyers wouldn’t start the process by saying: ‘This is what we have and this is what we are trying to achieve.’
We need to be open with suppliers and to give them the opportunity to do their best. This isn’t a game to catch people out. We are trying to find the supplier that is the best fit for our business, and we can’t do that if we don’t tell them what we have and what we want.
Some buyers allow minimum communication and I think that’s a real problem. You are dealing with people when you are buying services, so you have to allow discussions so you can get a feel for how these companies operate, and from the supplier side as well.
Deal breakers
I also asked the project team for deal breakers and put those in the RFP. If we are going to reject companies that do not have a physical presence in certain locations or if they don’t operate with specific technology, they need to know that. It’s an expensive process for suppliers, particularly in a global bid, it is a big investment in time and people.
We also showed how we had weighted each section – we made clear that we want accurate, detailed responses to every question, but doing this meant the suppliers knowing where we are placing greatest emphasis.
In addition, the transaction data that we have is limited, and we’ve been honest about that and have shared what we can. But we have factored into the implementation process a discovery phase of up to three months where the supplier can send their analysts in and do a detailed investigation on the data we do have, so we can build a final contract around that information. You can mitigate problems by acknowledging them on both sides.
Admitting weakness
Lack of honesty on the suppliers’ side is more basic. Suppliers have come into a presentation and claimed to have fully owned offices in specified locations, but we’ve done our homework and pointed out that we know one of them is franchised. That makes them look bad. Sometimes they tell us what they think we want to hear, and they get distracted from the truth. It would be far better if they said: “We know you want us to be wholly owned in all these locations – we’re not, but this is how we can guarantee that you’ll get the same level of service….”
There seems to be nervousness around TMCs admitting their weaknesses. Let’s talk about these weaknesses and how we can overcome them, rather than covering them up.
And when we ask suppliers to bring account managers and people who will be dealing with our staff to presentations, quite a few suppliers bring their vice-presidents and directors, who are very passionate about their business but can’t necessarily answer questions about the day-to-day running of the account.
We need a standard format for running tender processes. Procurement professionals can become CIPS accredited, we could move towards the CIMA [accounting qualification] or legal approach to training, to create a standard. Because we don’t have that, buyers can make it up as they go along. But it’s within our power to drive changes within procurement that create consistency and improve the process.