Drive Successful Sourcing Outcomes With a Robust RFP Process

Leverage your vendor sourcing process to get better results.

EXECUTIVE BRIEF

Drive Successful Sourcing Outcomes with a Robust RFP Process

Lack of RFP Process Causes... Stress Confusion Frustration Directionless Exhaustion Uncertainty Disappointment	Solution: RFP Process			Best value solutions Right-sized solutions Competitive Negotiations Better requirements that feed negotiations Internal alignment on requirements and solutions Vendor Management Governance Plan
	Requirements Risk Legal Support Security Technical Commercial Operational Vendor Management Governance	Templates, Tools, Governance RFP Template Your Contracts RFP Procedures Pricing Template Evaluation Guide Evaluation Matrix	Vendor Management Scorecards Classification Business Review Meetings Key Performance Indicators Contract Management Satisfaction Survey

Analyst Perspective

Consequences of a bad RFP

“A bad request for proposal (RFP) is the gift that keeps on taking – your time, your resources, your energy, and your ability to accomplish your goal. A bad RFP is ineffective and incomplete, it creates more questions than it answers, and, perhaps most importantly, it does not meet your organization’s expectations.”

Steven Jeffery
Principal Research Director, Vendor Management
Co-Author: The Art of Creating a Quality RFP
Info-Tech Research Group

Executive Summary

Your Challenge

• Most IT organizations are absent of standard RFP templates, tools, and processes.
• Many RFPs lack sufficient requirements from across the business (Legal, Finance, Security, Risk, Procurement, VMO).
• Most RFP team members are not adequately trained on RFP best practices.
• Most IT departments underestimate the amount of time required to perform an effective RFP.
• An ad hoc sourcing process is a common recipe for vendor performance failure.

Common Obstacles

• Lack of time
• Lack of resources
• Right team members not engaged
• Poorly defined requirements
• Too difficult to change supplier
• Lack of a process
• Lack of adequate tools/processes
• Lack of a vendor communications plan that includes all business stakeholders.
• Lack of consensus as to what the ideal result should look like.

Info-Tech’s Approach

• Establish a repeatable, consistent RFP process that maintains negotiation leverage and includes all key components.
• Create reusable templates to expedite the RFP evaluation and selection process.
• Maximize the competition by creating an equal and level playing field that encourages all the vendors to respond to your RFP.
• Create a process that is clear and understandable for both the business unit and the vendor to follow.
• Include Vendor Management concepts in the process.

Info-Tech Insight

A well planned and executed sourcing strategy that focuses on solid requirements, evaluation criteria, and vendor management will improve vendor performance.

Executive Summary

Your Challenge

Your challenge is to determine the best sourcing tool to obtain vendor information on capabilities, solution(s), pricing and contracting: RFI, RFP, eRFX.

Depending on your organization’s knowledge of the market, your available funding, and where you are in the sourcing process, there are several approaches to getting the information you need.

An additional challenge is to answer the question “What is the purpose of our RFX?”

If you do not have in-depth knowledge of the market, available solutions, and viable vendors, you may want to perform an RFI to provide available market information to guide your RFP strategy.

If you have defined requirements, approved funding, and enough time, you can issue a detailed, concise RFP.

If you have “the basics” about the solution to be acquired and are on a tight timeframe, an “enhanced RFI” may fit your needs.

This blueprint will provide you with the tools and processes and insights to affect the best possible outcome.

Executive Summary

Common Obstacles

• Lack of process/tools
• Lack of input from stakeholders
• Stakeholders circumventing the process to vendors
• Vendors circumventing the process to key stakeholders
• Lack of clear, concise, and thoroughly articulated requirements
• Waiting until the vendor is selected to start contract negotiations
• Waiting until the RFP responses are back to consider vendor management requirements
• Lack of clear communication strategy to the vendor community that the team adheres to

Many organizations underestimate the time commitment for an RFP

Why Vendors Don’t Like RFPs

Negative effects on your organization from a lack of RFP process

Stress, because roles and responsibilities aren’t clearly defined and communication is haphazard, resulting in strained relationships. Confusion, because you don’t know what the expected or desired results are. Directionless, because you don’t know where the team is going. Uncertainty, with many questions of your own and many more from other team members. Frustration, because of all the questions the vendors ask as a result of unclear or incomplete requirements. Exhaustion, because reviewing RFP responses of insufficient quality is tedious. Disappointment in the results your company realizes. (Source: The Art of Creating a Quality RFP)

Info-Tech’s approach

Develop an inclusive and thorough approach to the RFP Process

The Info-Tech difference:

1. The secret to managing an RFP is to make it as manageable and as thorough as possible. The RFP process should be like any other aspect of business – by developing a standard process. With a process in place, you are better able to handle whatever comes your way, because you know the steps you need to follow to produce a top-notch RFP.
2. The business then identifies the need for more information about a product/service or determines that a purchase is required.
3. A team of stakeholders from each area impacted gather all business, technical, legal, and risk requirements. What are the expectations of the vendor relationship post-RFP? How will the vendors be evaluated?
4. Based on the predetermined requirements, either an RFI or an RFP is issued to vendors with a predetermined due date.

Insight Summary

Overarching insight

Without a well defined, consistent RFP process, with input from all key stakeholders, the organization will not achieve the best possible results from its sourcing efforts.

Phase 1 insight

Vendors are choosing to not respond to RFPs due to their length and lack of complete requirements.

Phase 2 insight

Be clear and concise in stating your requirements and include, in addition to IT requirements, procurement, security, legal, and risk requirements.

Phase 3 insight

Consider adding vendor management requirements to manage the ongoing relationship post contract.

Tactical insight

Consider the RFP Evaluation Process as you draft the RFP, including weighting the RFP components. Don’t underestimate the level of effort required to effectively evaluate responses – write the RFP with this in mind.

Tactical insight

Provide strict, prescriptive instructions detailing how the vendor should submit their responses. Controlling vendor responses will increase your team’s efficiency in evaluations while providing ease of reference responses across multiple vendors.

Key deliverables

Each step of this blueprint is accompanied by supporting deliverables to help you accomplish your goals:

Key deliverables: Info-Tech provides you with the tools you need to go to market in the most efficient manner possible, with guidance on how to achieve your goals.	Long-Form RFP Template For when you have complete requirements and time to develop a thorough RFP.		Short-Form RFP Template When the requirements are not as extensive, time is short, and you are familiar with the market.
	Lean RFP Template When you have limited time and some knowledge of the market and wish to include only a few vendors.		Excel-Form RFP Template When there are many requirements, many options, multiple vendors, and a broad evaluation team.

Blueprint benefits

Info-Tech offers various levels of support to best suit your needs

Diagnostics and consistent frameworks used throughout all four options

Guided Implementation

A Guided Implementation (GI) is a series of calls with an Info-Tech analyst to help implement our best practices in your organization.

A typical GI is seven to twelve calls over the course of four to six months.

What does a typical GI on this topic look like?

Workshop Overview

Contact your account representative for more information.
workshops@infotech.com1-888-670-8889

Phase 1

Identify Need

Steps 1.1 Establish the need to either purchase goods/services (RFP) or acquire additional information from the market (RFI).

This phase involves the following participants:

• Business stakeholders
• IT
• Sourcing/Procurement
• Finance

Identify the need based on business requirements, changing technology, increasing vendor costs, expiring contracts, and changing regulatory requirements.

Outcomes of this phase

Agreement on the need to go to market to make a purchase (RFP) or to acquire additional information (RFI) along with a high-level agreement on requirements, rough schedule (is there time to do a full blown RFP or are you time constrained, which may result in an eRFP) and the RFP team is identified.

Identify the Need for Your RFP

An RFP is issued to the market when you are certain that you intend to purchase a product/service and have identified an adequate vendor base from which to choose as a result of: IT Strategy Changes in technology Marketplace assessment Contract expiration/renewal Changes in regulatory requirements Changes in the business’ requirements An RFI is issued to the market when you are uncertain as to available technologies or supplier capabilities and need budgetary costs for planning purposes. Be sure to choose the right RFx tool for your situation!

Phase 2

Define Your RFP Requirements

Steps 2.1 Define and classify the technical, business, financial, legal, and support and security requirements for your business.

This phase involves the following participants:

• IT
• Legal
• Finance
• Risk management
• Sourcing/Procurement
• Business stakeholders

Outcomes of this phase

A detailed list of required business, technical, legal and procurement requirements classified as to absolute need(s), bargaining and concession need(s), and “nice to haves.”

Define Business Requirements

Define RFP Requirements

Key things to consider when defining requirements

• Must be inclusive of the needs of all stakeholders: business, technical, financial, and legal
• Strive for clarity and completeness in each area of consideration.
• Begin defining your “absolute,” “bargaining,” “concession,” and ‘”dropped/out of scope” requirements to streamline the evaluation process.
• Keep the requirements identified as “absolute” to a minimum, because vendors that do not meet absolute requirements will be removed from consideration.
• Do you have a standard contract that can be included or do you want to review the vendor’s contract?
• Don’t forget Data Security!
• Begin defining your vendor selection criteria.
• What do you want the end result to look like?
• How will you manage the selected vendor after the contract? Include key VM requirements.
• Defining requirements can’t be rushed or you’ll find yourself answering many questions, which may create confusion.
• Collect all your current spend and budget considerations regarding the needed product(s) and service(s).

“Concentrate on the needs of the organization and not the wants of the individuals when creating requirements to avoid scope creep.” (Donna Glidden, ITRG Research Director)

Leverage the “ABCD” approach found in our Prepare for Negotiations More Effectively blueprint:
https://www.infotech.com/research/ss/prepare-for-negotiations-more-effectively

2.1 Prioritize your requirements

Input: List of all requirements from IT and IT Security, Business, Sourcing/Procurement, Risk Management, and Legal

Output: Prioritized list of RFP requirements approved by the stakeholder team

Materials: The RFP Requirements Worksheet

Participants: All stakeholders impacted by the RFP: IT, IT Security, the Business, Sourcing/ Procurement, Risk Management, Legal

1. Use this tool to assist you and your team in documenting the requirements for your RFP. Leverage it to collect and categorize your requirements in preparation for negotiations. Use the results of this tool to populate the requirements section of your RFP.
2. As a group, review each of the requirements and determine their priority as they will ultimately relate to the negotiations.
   • Prioritizing your requirements will set up your negotiation strategy and streamline the process.
   • By establishing the priority of each requirement upfront, you will save time and effort in the selection process.
3. Review RFP requirements with stakeholders for approval.

Download the RFP Requirements Worksheet

Phase 3

Gain Business Authorization

Steps 3.1 Obtain business authorization from the business, technology, finance and Sourcing/Procurement

This phase involves the following participants:

• Business stakeholders
• Technology and finance (depending upon the business)
• Sourcing/Procurement

Outcomes of this phase

Approval by all key stakeholders to proceed with the issuing of the RFP and to make a purchase as a result.

Gain Business Authorization

Gain Business Authorization

Gain authorization for your RFP from all relevant stakeholders Alignment of stakeholders Agreement on final requirements Financial authorization Commitment of resources Agreement on what constitutes vendor qualification Finalization of selection criteria and their prioritization Obtaining cross-function alignment will clear the way for contract, SOW, and budget approvals and not waste any of your and your vendor’s resources in performing an RFP that your organization is not ready to implement or invest financial and human resources in.

Phase 4

Create and Issue

Steps 4.1 Build your RFP 4.2 Decide RFI or not 4.3 Create your RFP 4.4 Receive & answer questions 4.5 Perform Pre-Proposal Conference 4.6 Evaluate responses

This phase involves the following participants:

• The RFP owner
• IT
• Business SMEs/stakeholders

Outcomes of this phase

RFP package is issued to vendors and includes the date of the Pre-Proposal Conference, which should be held shortly after RFP release and includes all parties.

SME’s/stakeholders participate in providing answers to RFP contact for response to vendors.

Create and Issue Your RFP/RFI

Six Steps to Perform RFI/RFP

Build your RFP with evaluation in mind

Easing evaluation frustrations

At the beginning of your RFP creation process consider how your requirements will impact the vendor’s response. Concentrate on the instructions you provide the vendors and how you wish to receive their responses. View the RFP through the lens of the vendors and envision how they are going to respond to the proposal.

Limiting the number of requirements included in the RFP will increase the evaluation team’s speed when reviewing vendors’ responses. This is accomplished by not asking questions for common features and functionality that all vendors provide. Don’t ask multiple questions within a question. Avoid “lifting” vendor-specific language to copy into the RFP as this will signal to vendors who their competition might be and may deter their participation. Concentrate your requirement questions to those areas that are unique to your solution to reduce the amount of time required to evaluate the vendors’ response.

Things to Consider When Creating Your RFP:

• Consistency is the foundation for ease of evaluation.
• Provide templates, such as an Excel worksheet, for the vendor’s pricing submissions and for its responses to close-ended questions.
• Give detailed instructions on how the vendor should organize their response.
• Limit the number of open-ended questions requiring a long narrative response to must-have requirements.
• Organize your requirements and objectives in a numerical outline and have the vendor respond in the same manner, such as the following:
  • 1
  • 1.1
  • 1.1.1

Increase your response quality

Inconsistent formatting of vendor responses prevents an apples-to-apples evaluation between vendor responses. Evaluation teams are frequently challenged and are unable to evaluate vendors’ responses equally against each other for the following reasons:

Six Steps to Perform RFI/RFP

Perform Request for Information

Don’t underestimate the importance of the RFI

As the name implies, a request for information (RFI) is a tool for collecting information from vendors about the companies, their products, and their services. We find RFIs useful when faced with a lot of vendors that we don’t know much about, when we want to benchmark the marketplace for products and services, including budgetary information, and when we have identified more potential vendors than we care to commit a full RFP to.

RFIs are simpler and less time-consuming than RFPs to prepare and evaluate, so it can make a lot of sense to start with an RFI. Eliminating unqualified vendors from further consideration will save your team from weeding through RFP responses that do not meet your objectives. For their part, your vendors will appreciate your efforts to determine up-front which of them are the best bets before asking them to spend resources and money producing a costly proposal.

While many organizations rarely use RFIs, they can be an effective tool in the vendor manager’s toolbox when used at the right time in the right way. RFIs can be deployed in competitive targeted negotiations.

A Lean RFP is a two-stage strategy that speeds up the typical RFP process. The first stage is like an RFI on steroids, and the second stage is targeted competitive negotiation.

Don’t rely solely on the internet to qualify vendors; use an RFI to acquire additional information before finalizing an RFP.

4.2.1 In a hurry? Consider a Lean RFP instead of an RFP

1. Create an RFI with all of the normal and customary components. Next, add a few additional RFP-like requirements (e.g. operational, technical, and legal requirements). Make sure you include a request for budgetary pricing and provide any significant features and functionality requirements so that the vendors have enough information to propose solutions. In addition, allow the vendors to ask questions through your single point of coordination and share answers with all of the vendors. Finally, notify the vendors that you will not be doing an RFP.
2. Review the vendors’ proposals and evaluate their proposals against your requirements along with their notional or budgetary pricing.
3. Have the evaluators utilize the Lean RFP Template to record their scores accordingly.
4. After collecting the scores from the evaluators, consolidate the scores together to discuss which vendors – we recommend two or three – you want to present demos.
5. Based on the vendors’ demos, the team selects at least two vendors to negotiate contract and pricing terms with intent of selecting the best-value vendor.
6. The Lean RFP shortens the typical RFP process, maintains leverage for your organization, and works great with low- to medium-spend items (however your organization defines them). You’ll get clarification on vendors’ competencies and capabilities, obtain a fair market price, and meet your internal clients’ aggressive timelines while still taking steps to protect your organization.

Download the Lean RFP Template

Download the RFP Evaluation Tool

4.2.1 In a hurry? Consider a Lean RFP instead of an RFP continued

Six Steps to Perform RFI/RFP

4.3.1 RFP Calendar

Input: List duration in days of key activities, RFP Calendar and Key Date Tool, For all vendor-inclusive meetings, include the dates on your RFP calendar and reference them in the RFP

Output: A timeline to complete the RFP that has the support of each stakeholder involved in the process and that allows for a complete and thorough vendor response.

Materials: RFP Calendar and Key Date Tool

Participants: IT management, Business stakeholder(s), Legal (as required), Risk management (as required), Sourcing/Procurement, Vendor management

1. As a group, identify the key activities to be accomplished and the amount of time estimated to complete each task:
   1. Identify who is ultimately accountable for the completion of each task
   2. Determine the length of time required to complete each task
2. Use the RFP Calendar and Key Date Tool to build the calendar specific to your needs.
3. Include vendor-related dates in the RFP, i.e., Pre-Proposal Conference, deadline for RFP questions as well as response.

Download the RFP Calendar and Key Date Tool

Draft your RFP

Create a template for the vendors’ response

Dictating to the vendors the format of their response will increase your evaluation efficiency Narrative Response: Create either a Word or Excel document that provides the vendor with an easy vehicle for their response. This template should include the question identifier that ties the response back to the requirement in the RFP. Instruct vendors to include the question number on any ancillary materials they wish to include. Pricing Response: Create a separate Excel template that the vendors must use to provide their financial offer. This template should include pricing for hardware, software, training, implementation, and professional services, as well as placeholders for any additional fees. Always be flexible in accepting alternative proposals after the vendor has responded with the information you requested in the format you require.

4.3.2 Vendor Pricing Tool

Input: Identify pricing components for hardware, software, training, consulting/services, support, and additional licenses (if needed)

Output: Vendor Pricing Tool

Materials: RFP Requirements Worksheet, Pricing template

Participants: IT, Finance, Business stakeholders, Sourcing/Procurement, Vendor management

1. Using a good pricing template will prevent vendors from providing pricing offers that create a strategic advantage designed to prevent you from performing an apples-to-apples comparison.
2. Provide specific instructions as to how the vendor is to organize their pricing response, which should be submitted separate from the RFP response.
3. Configure and tailor pricing templates that are specific to the product and/or services.
4. Upon receipt of all the vendor’s responses, simply cut and paste their total response to your base template for an easy side-by-side pricing comparison.
5. Do not allow vendors to submit financial proposals outside of your template.

Download the Vendor Pricing Tool

Three RFP Templates

Choose the right template for the right sourcing initiative

• Short-Form

Use the Short-Form RFP Template for simple, non-complex solutions that are medium to low dollar amounts that do not require numerous requirements.

• Long-Form

We recommend the Long-Form RFP Template for highly technical and complex solutions that are high dollar and have long implementation duration.

• Excel-Form

Leverage the Excel-Form RFP Tool for requirements that are more specific in nature to evaluate a vendor’s capability for their solution. This template is designed to be complete and inclusive of the RFP process, e.g., requirements, vendor response, and vendor response evaluation scoring.

Like tools in a carpenters’ tool box or truck, there is no right or wrong template for any job. Take into account your organization culture, resources available, time frame, policies, and procedures to pick the right tool for the job. (Steve Jeffery, Principal Research Director, Vendor Management, Co-Author: The Art of Creating a Quality RFP, Info-Tech Research Group)

4.3.3 Short-Form RFP Template

1-2 hours

Input: List of technical, legal, business, and data security requirements

Output: Full set of requirements, prioritized, that all participants agree to

Materials: Short-Form RFP Template, Vendor Pricing Tool, Supporting exhibits

Participants: IT management, Business stakeholder(s), Legal (as required), Risk management (as required), Sourcing/Procurement, Vendor management

• This is a less complex RFP that has relatively basic requirements and perhaps a small window in which the vendors can respond. As with the long-form RFP, exhibits are placed at the end of the RFP, an arrangement that saves both your team and the vendors time. Of course, the short-form RFP contains less-specific instructions, guidelines, and rules for vendors’ proposal submissions.
• We find that short-form RFPs are a good choice when you need to use something more than a request for quote (RFQ) but less than an RFP running 20 or more pages. It’s ideal, for example, when you want to send an RFP to only one vendor or to acquire items such as office supplies, contingent labor, or commodity items that don’t require significant vendor risk assessment.

Download the Short-Form RFP Template

4.3.4 Long-Form RFP Template

1-3 hours

Input: List of technical, legal, business, and data security requirements

Output: Full set of requirements, prioritized, that all stakeholders agree to

Materials: Long-Form RFP Template, Vendor Pricing Tool, Supporting exhibits

Participants: IT management, Business stakeholder(s), Legal (as required), Risk management (as required), Sourcing/Procurement, Vendor management

• A long-form or major RFP is an excellent tool for more complex and complicated requirements. This template is for a baseline RFP.
• It starts with best-in-class RFP terms and conditions that are essential to maintaining your control throughout the RFP process. The specific requirements for the business, functional, technical, legal, and pricing areas should be included in the exhibits at the end of the template. That makes it easier to tailor the RFP for each deal, since you and your team can quickly identify specific areas that need modification. Grouping the exhibits together also makes it convenient for both your team to review and the vendors to respond.
• You can use this sample RFP as the basis for your template RFP, taking it all as is or picking and choosing the sections that best meet the mission and objectives of the RFP and your organization.

Download the Long-Form RFP Template

4.3.5 Excel-Form RFP Tool

Several weeks

Input: List of technical, legal, business, and data security requirements

Output: Full set of requirements, prioritized, that all stakeholders agree to

Materials: Excel-Form RFP Template, Vendor Pricing Tool, Supporting exhibits

Participants: IT management, Business stakeholder(s), Legal (as required), Risk management (as required), Sourcing/Procurement, Vendor management

• The Excel-Form RFP Tool is used as an alternative to the other RFP toolsets if you have multiple requirements and have multiple vendors to choose from.
• Requirements are written as a “statement” and the vendor can select from five answers as to their ability to meet the requirements, with the ability to provide additional context and materials to augment their answers, as needed.
• Requirements are listed separately in each tab, for example, Business, Legal, Technical, Security, Support, Professional Services, etc.

Download the Excel-Form RFP Template

Six Steps to Perform RFI/RFP

Answer Vendor Questions

Maintaining your equal and level playing field among vendors

Provide an adequate amount of time from the RFP issue date to the deadline for vendor questions. There may be multiple vendor staff/departments that need to read the RFP and then discuss their response approach and gather any clarifying questions, so we generally recommend three to five business days. There should be one point of contact for all Q&A, which should be submitted in writing via email only. Be sure to plan for enough time to get the answers back from the RFP stakeholders. After the deadline, collect all Q&A and begin the process of consolidating into one document.

Be sure to anonymize both vendor questions and your responses, so as not to reveal who asked or answered the question. Send the document to all RFP respondents via your sourcing tool or BCC in an email to the point of contact, with read receipt requested. That way, you can track who has received and opened the correspondence. Provide the answers a few days prior to the Pre-Proposal Conference to allow all respondents time to review the document and prepare any additional questions. Begin the preparation for the Pre-Proposal Conference.

Six Steps to Perform RFI/RFP

Conduct Pre-Proposal Conference

Maintain an equal and level playing field

• Consolidate all Q&A to be presented to all vendors during the Pre-Proposal Conference.
• If the Pre-Proposal Conference is conducted via conference call, be sure to record the session and advise all participants at the beginning of the call.
• Be sure to have key stakeholders present on the call to answer questions.
• Read each question and answer, after which ask if there are any follow up questions. Be sure to capture them and then add them to the Q&A document.
• Remind respondents that no further questions will be entertained during the remainder of the RFP response period.
• Send the updated and completed document to all vendors (even if circumstances prevented their attending the Pre-Proposal Conference). Use the same process as when you sent out the initial answers: via email, blind copy the respondents and request read/receipt.

“Using a Pre-Proposal Conference allows you to reinforce that there is a level playing field for all of the vendors…that each vendor has an equal chance to earn your business. This encourages and maximizes competition, and when that happens, the customer wins.” (Phil Bode, Principal Research Director, Co-Author: The Art of Creating a Quality RFP, Info-Tech Research Group)

Pre-Proposal Conference Agenda

Allow your executive or leadership sponsor to leave the Pre-Proposal Conference after they provide their comments to allow them to continue their day while demonstrating to the vendors the importance of the project.

Six Steps to Perform RFI/RFP

Evaluate Responses

Other important information

Consider separating the pricing component from the RFP responses before sending them to reviewers to maintain objectivity until after you have received all ratings on the proposals themselves. Each reviewer should set aside focused time to carefully read each vendor’s response Read the entire vendor proposal – they spent a lot time and money responding to your request, so please read everything. Remind reviewers that they should route any questions to the vendor through the RFP manager. Using the predetermined ranking system for each section, rate each section of the response, capturing any notes, questions, or concerns as you proceed through the document(s).

Use a proven evaluation method

Two proven methods to reviewing vendors’ proposals are by response and by objective

The first, by response, is when the evaluator reviews each vendor’s response in its entirety.

The second, reviewing by objective, is when the evaluator reviews each vendor’s response to a single objective before moving on to the next.

Maintain evaluation objectivity by reducing response evaluation biases

Evaluation teams can be naturally biased during their review of the vendors’ responses.

You cannot eliminate bias completely – the best you can do is manage it by identifying these biases with the team and mitigating their influence in the evaluation process.

Vendor The evaluator only trusts a certain vendor and is uncomfortable with any other vendor. Evaluate the responses blind of vendor names, if possible.		Account Representatives Relationships extend beyond business, and an evaluator doesn't want to jeopardize them. Craft RFP objectives that are vendor neutral.
Technical A vendor is the only technical solution the evaluator is looking for, and they will not consider anything else. Conduct fair and open solution demonstrations.		Price As humans, we can justify anything at a good price. Evaluate proposals without awareness of price.

Additional insights when evaluating RFPs

When your evaluation team includes a member of the C-suite or senior leadership, ensure you give them extra time to sufficiently review the vendor's responses.		When your questions require a definitive “Yes”/“True” or “No”/“False” responses, we recommend giving the maximum score for “Yes”/“True” and the minimum score for “No”/“False”.
Increase your efficiency and speed of evaluation by evaluating the mandatory requirements first. If a vendor's response doesn't meet the minimum requirements, save time by not reviewing the remainder of the response.		Group your RFP questions with a high-level qualifying question, then the supporting detailed requirements. The evaluation team can save time by not evaluating a response that does not meet a high-level qualifying requirement.

Establish your evaluation scoring scale

Define your ranking scale to ensure consistency in ratings Within each section of your RFP are objectives, each of which should be given its own score. Our recommended approach is to award on a scale of 0 to 5. With such a scale, you need to define every level. Below are the recommended definitions for a 0 to 5 scoring scale. Score Criteria for Rating 5 Outstanding – Complete understanding of current and future needs; solution addresses current and future needs 4 Competent – Complete understanding and adequate solution 3 Average – Average understanding and adequate solution 2 Questionable – Average understanding; proposal questionable 1 Poor – Minimal understanding 0 Not acceptable – Lacks understanding

Weigh the sections of your RFP on how important or critical they are to the RFP

Obtain Alignment on Weighting the Scores of Each Section There are many ways to score responses, ranging from extremely simple to highly complicated. The most important thing is that everyone responsible for completing scorecards is in total agreement about how the scoring system should work. Otherwise, the scorecards will lose their value, since different weighting and scoring templates were used to arrive at their scores. You can start by weighting the scores by section, with all sections adding up to 100%.

Example RFP Section Weights (Source: The Art of Creating a Quality RFP, Jeffery et al., 2019)

Protect your negotiation leverage with these best practices

Protect your organization's reputation within the vendor community with a fair and balanced process. Unless you regularly have the evaluators on your evaluation team, always assume that the team members are not familiar nor experienced with your process and procedures. Do not underestimate the amount of preparations required to ensure that your evaluation team has everything they need to evaluate vendors’ responses without bias. Be very specific about the expectations and time commitment required for the evaluation team to evaluate the responses. Explain to the team members the importance of evaluating responses without conflicts of interest, including the fact that information contained within the responses and all discussions within the team are considered company owned and confidential. Include examples of the evaluation and scoring processes to help the evaluators understand what they should be doing. Finally – don’t forget to the thank the evaluation team and their managers for their time and commitment in contributing to this essential decision.

Evaluation teams must balance commercial vs. technical requirements

Do not alter the evaluation weights after responses are submitted. Evaluation teams are always challenged by weighing the importance of price, budget, and value against the technical requirements of “must-haves” and super cool “nice-to-haves.” Encouraging the evaluation team not to inadvertently convert the nice-to-haves to must-haves will prevent scope creep and budget pressure. The evaluation team must concentrate on the vendors’ responses that drive the best value when balancing both commercial and technical requirements.

4.6.1 Evaluation Guidebook

1 hour

Input: RFP responses, Weighted Scoring Matrix, Vendor Response Scorecard

Output: One or two finalists for which negotiations will proceed

Materials: RFP Evaluation Guidebook

Participants: IT, Finance, Business stakeholders, Sourcing/Procurement, Vendor management

1. Info-Tech provides an excellent resource for your evaluation team to better understand the process of evaluating vendor response. The guidebook is designed to be configured to the specifics of your RFP, with guidance and instructions to the team.
2. Use this guidebook to provide instruction to the evaluation team as to how best to score and rate the RFP responses.
3. Specific definitions are provided for applying the numerical scores to the RFP objectives will ensure consistency among the appropriate numerical score.

Download the RFP Evaluation Guidebook

4.6.2 RFP Vendor Proposal Scoring Tool

1-4 hours

Input: Each vendor’s RFP response, A copy of the RFP (less pricing), A list of the weighted criteria incorporated into a vendor response scorecard

Output: A consolidated ranked and weighted comparison of the vendor responses with pricing

Materials: Vendor responses, RFP Evaluation Tool

Participants: Sourcing/Procurement, Vendor management

1. Using the RFP outline as a base, develop a scorecard to evaluate and rate each section of the vendor response, based on the criteria predetermined by the team.
2. Provide each stakeholder with the scorecard when you provide the vendor responses for them to review and provide the team with adequate time to review each response thoroughly and completely.
3. Do not, at this stage, provide the pricing. Allow stakeholders to review the responses based on the technical, business, operational criteria without prejudice as to pricing.
4. Evaluators should always be reminded that they are evaluating each vendor’s response against the objectives and requirements of the RFP. The evaluators should not be evaluating each vendor’s response against one another.
5. While the team is reviewing and scoring responses, review and consolidate the vendor pricing submissions into one document for a side-by-side comparison.

Download the RFP Evaluation Tool

4.6.3 Total Cost of Owners (TCO)

Input: Consolidated vendor pricing responses, Consolidated vendor RFP responses, Current spend within your organization for the product/service, if available, Budget

Output: A completed TCO model summarizing the financial results of the RFP showing the anticipated costs over the term of the agreement, taking into consideration the impact of renewals.

Materials: Vendor TCO Tool, Vendor pricing responses

Participants: IT, Finance, Business stakeholders, Sourcing/Procurement

• Use Info-Tech’s Vendor TCO Tool to normalize each vendor’s pricing proposal and account for the lifetime cost of the product.
• Fill in pricing information (the total of all annual costs) from each vendor's returned Pricing Proposal.
• The tool will summarize the net present value of the TCO for each vendor proposal.
• The tool will also provide the rank of each pricing proposal.

Download the Vendor TCO Tool

Conduct an evaluation team results meeting

Follow the checklist below to ensure an effective evaluation results meeting

• Schedule the evaluation team’s review meeting well in advance to ensure there are no scheduling conflicts.
• Collect the evaluation team’s scores in advance.
• Collate scores and provide an initial ranking.
• Do not reveal the pricing evaluation results until after initial discussions and review of the scoring results.
• Examine both high and low scores to understand why the team members scored the response as they did.
• Allow the team to discuss, debate, and arrive at consensus on the ranking.
• After consensus, reveal the pricing to examine if or how it changes the ranking.
• Align the team on the next steps with the applicable vendors.

4.6.4 Consolidated RFP Response Scoring

1-2 hours

Input: Vendor Response Scorecard from each stakeholder, Consolidated RFP responses and pricing, Any follow up questions or items requiring further vendor clarification.

Output: An RFP Response Evaluation Summary that identifies the finalists based on pre-determined criteria.

Materials: RFP Evaluation Tool from each stakeholder, Consolidated RFP responses and pricing.

Participants: IT, Finance, Business stakeholders, Sourcing/Procurement, Vendor management

1. Collect from the evaluation team all scorecards and any associated questions requiring further clarification from the vendor(s). Consolidate the scorecards into one for presentation to the team and key decision makers.
2. Present the final scores to the team, with the pricing evaluation, to determine, based on your needs, two or three finalists that will move forward to the next steps of negotiations.
3. Discuss any scores that are have large gaps, e.g., a requirement with a score of one from one evaluator and the same requirement with a score five from different evaluator.
4. Arrive at a consensus of your top one or two potential vendors.
5. Determine any required follow-up actions with the vendors and include them in the Evaluation Summary.

Download the Consolidated Vender RFP Response Evaluation Summary

4.6.5 Vendor Recommendation Presentation

1. Use the Vendor Recommendation Presentation to present your finalist and obtain final approval to negotiate and execute any agreements.
2. The Vendor Recommendation Presentation provides leadership with:
   1. An overview of the RFP, its primary goals, and key requirements
   2. A summary of the vendors invited to participate and why
   3. A summary of each component of the RFP
   4. A side-by-side comparison of key vendor responses to each of the key/primary requirements, with ranking/weighting results
   5. A summary of the vendor’s responses to key legal terms
   6. A consolidated summary of the vendors’ pricing, augmented by the TCO calculations for the finalist(s).
   7. The RFP team’s vendor recommendations based on its findings
   8. A summary of next steps with dates
   9. Request approval to proceed to next steps of negotiations with the primary and secondary vendor

Download the Vendor Recommendation Presentation

4.6.5 Vendor Recommendation Presentation

Caution: Configure templates and tools to align with RFP objectives

Templates and tools are invaluable assets to any RFP process

Phase 5

Negotiate Agreement(s)

Steps 5.1 Perform negotiation process

This phase involves the following participants:

• Procurement
• Vendor management
• Legal
• IT stakeholders
• Finance

Outcomes of this phase

A negotiated agreement or agreements that are a result of competitive negotiations.

Negotiate Agreement(s)

Negotiate Agreement

You should evaluate your RFP responses first to see if they are complete and the vendor followed your instructions. Then you should: Plan negotiation(s) with one or more vendors based on your questions and opportunities identified during evaluation. Select finalist(s). Apply selection criteria. Resolve vendors’ exceptions. Info-Tech Insight Be certain to include any commitments made in the RFP, presentations, and proposals in the agreement – dovetails to underperforming vendor.

Leverage Info-Tech's negotiation process research for additional information

Negotiate before you select your vendor: Negotiating with two or more vendors will maintain your competitive leverage while decreasing the time it takes to negotiate the deal. Perform legal reviews as necessary. Use sound competitive negotiations principles. Info-Tech Insight Providing contract terms in an RFP can dramatically reduce time for this step by understanding the vendor’s initial contractual position for negotiation.

Phase 6

Purchase Goods and Services

Steps 6.1 Purchase Goods & Services

This phase involves the following participants:

• Procurement
• Vendor management
• IT stakeholders

Outcomes of this phase

A purchase order that completes the RFP process.

The beginning of the vendor management process.

Purchase Goods and Services

Purchase Goods and Services

Prepare to purchase goods and services

Prepare to purchase goods and services by completing all items on your organization’s onboarding checklist. Have the vendor complete applicable tax forms. Set up the vendor in accounts payable for electronic payment (ACH) set-up. Then transact day-to-day business: Provide purchasing forecasts. Complete applicable purchase requisition and purchase orders. Be sure to reference the agreement in the PO.

Info-Tech Insight

As a customer, honoring your contractual obligations and commitments will ensure that your organization is not only well respected but considered a customer of choice.

Phase 7

Assess and Measure Performance

Steps 7.1 Assess and measure performance against the agreement

This phase involves the following participants:

• Vendor management
• Business stakeholders
• Senior leadership (as needed)
• IT stakeholders
• Vendor representatives & senior management

Outcomes of this phase

A list of what went well during the period – it’s important to recognize successes

A list of areas needing improvement that includes:

• A timeline for each item to be completed
• The team member(s) responsible

Purchase Goods and Services

Assess and Measure Performance

Measure to manage: the job doesn’t end when the contract is signed.

• Classify vendor
• Assess vendor performance
• Manage improvement
• Conduct periodic vendor performance reviews or quarterly business reviews
• Ensure contract compliance for both the vendor and your organization
• Build knowledgebase for future
• Re-evaluate and improve appropriately your RFP processes

Info-Tech Insight

To be an objective vendor manager, you should also assess and measure your company’s performance along with the vendor’s performance.

Summary of Accomplishment

Problem Solved

Upon completion of this blueprint, guided implementation, or workshop, your team should have a comprehensive, well-defined end-to-end approach to performing a quality sourcing event. Leverage Info-Tech’s industry-proven tools and templates to provide your organization with an effective approach to maintain your negotiation leverage, improve the ease with which you evaluate vendor proposals, and reduce your risk while obtaining the best market value for your goods and services.

Additionally, your team will have a foundation to execute your vendor management principles. These principles will assist your organization in ensuring you receive the perceived value from the vendor as a result of your competitive negotiations.

If you would like additional support, have our analysts guide you through other phases as part of an Info-Tech workshop.

Contact your account representative for more information.

workshops@infotech.com 1-888-670-8889

Final Thoughts: RFP Do’s and Don’ts

Bibliography

“2022 RFP Response Trends & Benchmarks.” Loopio, 2022. Web.

Corrigan, Tony. “How Much Does it Cost to Respond to an RFP?” LinkedIn, March 2017. Accessed 10 Dec. 2019

“Death by RFP:7 Reasons Not to Respond.” Inc. Magazine, 2013. Web.

Jeffery, Steven, George Bordon, and Phil Bode. The Art of Creating a Quality RFP, 3rd ed. Info-Tech Research Group, 2019.

“RFP Benchmarks: How Much Time and Staff Firms Devote to Proposals.” MarketingProfs, 2020. Web.

“State of the RFP 2019.” Bonfire, 2019. Web.

“What Vendors Want (in RFPs).” Vendorful, 2020. Web.

Related Info-Tech Research

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	Understand Common IT Contract Provisions to Negotiate More Effectively Focus on the terms and conditions, not just the price. Too often, organizations focus on the price contained within their contracts, neglecting to address core terms and conditions that can end up costing multiples of the initial price. Lawyers can’t ensure you get the best business deal. Lawyers tend to look at general terms and conditions for legal risk and may not understand IT-specific components and business needs.
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