The more requests for proposal (RFPs) I participate in, the more I wonder: has today’s procurement process turned to “speed dating”?
In an attempt to streamline evaluations of suppliers, more and more procurement organizations are relying on the standard mechanism by which organizations typically vet potential outsourcing partners – the request for proposal (RFP). For services that are key to your brand image and vital to your organization’s success, a flat document consisting of boilerplate questions and responses can’t comprehensively capture the nuances of your organization’s needs – or a supplier’s compatibility with your organization.
Procurement professionals have an opportunity to provide real-time, game-changing value to their stakeholders. The first step involves allowing a supplier to go behind the scenes to do due diligence on your organization.
Onsite assessment – what’s in it for you
Consider this statistic: According to Gartner, 80% of customer service outsourcing projects aimed at cutting costs are destined to fail. Gartner says, “Companies are encountering problems because they don't approach this strategically. They usually lack information to make meaningful cost/benefit analysis and often focus on inappropriate or unmeasurable service levels and cost metrics."
Responses to RFP questions typically address questions such as cost, technology stack, quality, operational KPIs, security, etc.. They don’t provide insight into the real-world, day-to-day challenges and opportunities that a client organization might have. They also provide neither party much visibility into the “secret sauce” that defines a successful relationship: compatibility.
When a supplier representative is invited in to see how your current operation runs and ask key stakeholders “how?” and “why?” questions, it’s an opportunity for the individual to identify pain points or process gaps that could be addressed.
For instance, in a recent onsite assessment that I conducted for a call center outsourcing RFP, I noticed that not all agents were consistently making upsell offers. When I asked one agent why, she confessed that she “forgot.” Having an online knowledge base that generates pop-up prompts (based on, say, a customer’s credit rating or purchase history) would ensure that every call is a selling opportunity. You can apply this to most procurement opportunities. We all know that “tribal knowledge” isn’t a myth and the only way you can get to the heart of what makes an organization tick is by face to face due diligence.
Getting out of the ‘speed dating’ rut
Unlike the traditional “speed dating” approach to evaluating a supplier, scheduling onsite assessments with key prospective suppliers is more like a first date. At a minimum, you get insights into compatibility. If you’re lucky, you may even find a long-term partner who not only meets your basic needs for cost savings, quality, and technology but also provides you with innovation to help build your brand and even transform your organization.