Strategic Sourcing & Other Vendor Management Best Practices

 

Vendor Management Best Practices: Strategic Purchasing Most of the Request for Proposals (RFPs) that come in our door are like hotel slippers, generic and “one-size-fits-all.” In other words, unappealing and ineffective. And while there’s a time and place for quantity over quality, it's not here. When it comes to choosing crucial vendor partners, we need to approach each selection with a “quality” mentality.

Make it strategic.

 

Avoid One-Size-Fits-All RFPs.

We recently received an RFP asking us to detail our car rental policy…we’re an RFP software company! If you purchase our product, there will be no rental cars or travel involved. Clearly, that particular RFP was just "boilerplate" recycled material. It had not been modified or tailored to our unique industry and service.

Generic criteria is great…for buying toothpaste. Not in an RFP. Not for choosing a critical partner. Anyone making a significant sourcing decision has very specific expectations for their vendors; and waiting to communicate those requirements until scoring and contract evaluation just makes your job more difficult...and it wastes the vendor's time. These tactics could be pushing vendors away from responding at all, which means you're not evaluating all the options.

Cheesy pick up lines don’t fly. Blanket emails don’t get opened. And nonspecific RFPs aren't effective either. People (including vendors) know when something is over-used, non-applicable, and not worth their time.

Luckily, there’s an easy fix.

 

Ask for what you want.

So if “generic” RFPs are out, then what? It’s time to customize your vendor selection process. 

You need to think like a Marketer. Any CMO will tell you, if you if want to optimize vendor engagement, you need to target. Strategic purchasing begins with a specific idea of what your “ideal partner” looks like.

Step 1. Define your ideal vendor. Before we send our RFP and start "shopping”, we need to have a clear idea of what we’re looking for. Discuss your unique service/product requirements with your team.

Ask yourselves what would an ideal supplier look like? (Marketing refers to these as Personas). What does their optimal size, location, and service portfolio include?

Clarify which traits and features are necessities and which are on the “wish list”. Be as specific as possible. The clearer the picture of your “ideal” solution, the easier it will be to recognize it. 

If you’re not ready to get specific, you’re probably not ready to issue an RFP; if you’re looking for general information an RFI is probably a better first step.

Step 2. Ask specific questions. Once you know what you’re looking for, it’s time to ask for it. Meaning specific RFP questions.

Vendor Management Best Practices - Relevant = Responses
Why take the time to get specific? Because when we don’t, when we issue nonspecific RFPs, we’re essentially bombarding vendors with projects that are (most likely) a poor fit. Which is bad news for everyone. Because:

A. Not doing your homework and sending a blanket RFP (“car rental policy” to a software company), leaves a bad taste in the mouth of potential vendors; and will make them hesitant regarding any future relationship.

B. And if they do bother to bid, you’ll only get spammed with irrelevant responses.


So vendor management best practices rule #1: don’t insult them by sending them the RFP equivalent of a cheap one-size-fits-all slipper.

It only wastes everyone’s time.

 

Conclusion: Shop Smarter.

All said, when your questions are relevant, and specific, you get quality proposals. It sets you up to get the information you need (by finding out what you really want to know).

Which means you can compare responses thoroughly and efficientlyStrategic hunting = savvy selections.

 

Want more? Make your shopping even smarter, and your engagement even easier.  

Discover a better RFP process

 

 

 

 

 

 

 

 

 

**Feature Image Credit: PublicDomainPictures