February 18, 2021

A Look at the Future of RFPs

By Beau Wysong, Chief Marketing Officer, RFP360

The request for proposal (RFP) process is broken. Whether you’re on the issuing side or responding side of the process, I think we can all agree it’s time for change. To help us understand how the process will evolve, a number of experts shared their views on the question: What does the future of RFPs look like, and how can you prepare?

After gathering and analyzing their answers, three main themes surfaced.

Theme 1: Digital transformation through RFP management tools will continue to evolve how RFPs are issued and answered.
It’s no secret that the future of RFPs will rely on technology. Digital transformation is changing the world, and RFPs are no exception. In fact, a study by ISG found that, in the past 10 years, the time it takes to get from RFP to contract signing has been cut down from 12 months to six. There has already been a significant shift from hard-copy submission to digital only – and that will only continue to increase.

Just as businesses look to technology to streamline communication and sales technology, they will continue to adopt software solutions to improve RFP management. For example, centralized knowledge libraries and instant response selection powered by AI and machine learning will not only decrease the cost of responding to RFPs, but improve outcomes, too.

According to Eric McKinnon, senior vice president at CerpassRX, “The future is in technology. Specifically, RFP management solutions that are more of a business partner to organizations of all sizes. Being able to get everything stored in a single database or knowledge library while assigning RFP questions to subject matter experts and having them answer directly in the system is crucial.”

While any technology that empowers RFP automation is better than nothing, some stand-alone solutions don’t take the bigger picture into consideration. Strategic sourcing- and proposal-only tools lack a holistic perspective that empowers true change. Without a centralized place where buyers and sellers can connect, transparency and visibility will continue to be a challenge. A complete platform, built for both RFP issuers and respondents, improves the entire process. After all, better RFPs lead to better proposals, which lead to better partnerships ⁠– reducing costs and inefficiency for everyone.

Theme 2: RFPs will become more targeted, transparent, and strategic.
The RFP process is detailed and complex. This works well for strategic sourcing projects, but isn’t right for every situation. Relying too heavily on the RFP process can cause misunderstandings between buyers and vendors. Using the right procurement process improves transparency and sets expectations up front. With a multi-step procurement process leveraging vendor profiles, requests for information (RFIs), and requests for qualifications (RFQs), everyone can achieve better results. Using these tools to gather information enables issuers to create RFPs that are short, clear, and to the point. Shorter, fewer, and more-strategic RFPs is a future we’d like to be a part of.

David Kutcher, owner of Confluent Forms, comments on this trend: “I’ve been seeing organizations get really smart by using an advised, multi-tier RFP process. They use requests for qualifications and requests for information to create a shortlist of providers before it even goes to the RFP. That way you’re limiting the full RFP process to a final five or 10 vendors. This enables the organization that initiated the RFP to actually review in depth. At the same time, it enables bidders to spend more time creating a quality proposal, because they know that they’re already on a shortlist, as opposed to a cattle call.”

Theme 3: Collaboration will be the backbone of the RFP process.
More than ever, buyers are connected to information. Consequently, the future of RFPs will make buyers and sellers more connected as well.

Potential buyers come to the table with large amounts of information from their own research. Through a capture plan, vendors can tailor their offering to best meet the needs of potential buyers. However, all that work and research is wasted if both sides can’t communicate clearly and effectively.

Managing RFPs manually through email creates a high risk of miscommunication and inconsistency between vendors. It is also time consuming and makes providing detailed individual feedback extremely difficult.

RFP issuers want better answers. Vendors want more feedback about their responses. And, everyone wants to have enough information to be successful. To accomplish that and reap the benefits of longer partnerships and fewer RFPs, the process must become more collaborative and transparent.

When we discuss the need for better buyer and seller collaboration, it may start with a new kind of RFP. The request for partnership methodology, also known as “collaborative bidding,” encourages buyers and vendors to work together toward an ideal solution, rather than meeting a predefined set of qualifications.

A white paper by University of Tennessee, Knoxville, defines this new kind of RFP: “Request for partner is a term…to describe a highly collaborative competitive bidding process used for strategic and complex sourcing initiatives. A key goal is to identify a supplier that is innovative and able to provide transformation through outsourcing, and also is a good ‘fit’ for their organization. For this reason, the competitive bid process is very transparent and encourages collaboration.”

While not every business may be ready to workshop procurement with their potential vendors, the idea is promising. Certainly, this collaborative mindset will be a big part of the future of RFPs.

It’s difficult to know for certain exactly what the future holds. However, it seems clear that how buyers and sellers connect through the RFP process is changing. The shift is already happening – and now is the time to prepare. As RFP issuers pursue efficiency, respondents must be prepared to improve technology, transparency, and collaboration.

Kelly Ellis offered an issuer’s perspective on the potential consequences of avoiding change, saying, “My best advice is to read the instructions provided and embrace technology that serves the client. For us, if they’re not willing to respond in the tech we use, they’re disqualified. I know that sounds harsh, but it’s not about them – it’s about the client and being able to evaluate vendors fairly.”

So, the question is, will your business be a part of making RFPs better for everyone and subsequently thrive in the future of RFPs?

Beau Wysong leads the marketing team at RFP360 as the chief marketing officer. He leverages his background in technology marketing and sales to drive business growth.