Don't send your RFP to too many suppliers
You might think you're maximizing your chances of getting quality responses, but sending out too many RFPs is actually counterproductive
Computerworld - In the course of our careers managing requests for proposal, both of us have encountered what are simply wrongheaded and counterproductive attitudes toward the process. One of the more common ones is the notion that the best way to get the quality responses you want is to send your RFP to as many suppliers as possible. It's just not true.
One time, George had been called in to review the supplier responses to an RFP for software services. Naturally, he wanted to know how many responses there would be, so he asked, "How many suppliers received the RFP?"
"Just 10," was the answer. George was startled to hear that, but his colleague must have thought that he was disappointed that there hadn't been more, because he proceeded to explain that the team had hoped to send the RFP to a dozen suppliers, but could only find 10 that seemed suitable. The thinking behind this was that they believed that the more suppliers they sent the RFP to, the more likely it was that they would end up with many strong responses from qualified, capable suppliers.
That had not been George's experience, however, and he was curious to know what the results had been for them. The evaluation team had seven members. The evaluation process was taking longer than expected, and suppliers were calling, wanting to know when a decision would be made. The evaluators were complaining about the complexity of the process. The internal client was growing restless. At this point, the team had weeded out all but two of the responses, based on cost more than anything else. We have seen cases where suppliers have been narrowed down to two essential equivalent candidates, but this still leaves price and cost as remaining differentiators.
It all sounded like a waste of time to George, but it was nothing he hadn't seen before. The team had spent weeks struggling with a complex evaluation process, and in the end they had thrown that all overboard and focused on cost. Budget is certainly an important criterion when evaluating responses to RFPs, but it shouldn't be the only one. Once it rose in importance for the team, you had to wonder about all that time spent early in the process looking at other things. After all, with budget now the predominant criterion, the team hadn't really narrowed the field from 10 responses to two. It had narrowed it from three; seven suppliers were disqualified due to high cost.
We have learned that sending out a lot of RFPs for the sake of sending out a lot of RFPs is counterproductive. It is far better to do some research ahead of time and target your RFP at the suppliers that are most likely to return the best responses. Before discussing how to assess the best candidates for receiving your RFP, though, let's consider how casting a wide net has a negative effect on both the suppliers and our own organizations.
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