A few years after the worst of the Corona epidemic, it already feels slightly unreal, doesn’t it? In any case, it was a completely different everyday life than what has now become everyday life again. We were busy even then, but for many companies it was tough. Many decisions were not taken and the pace of change, in general, slowed down.
A year ago, we concluded that the reason why many of our customers wanted to procure a new IT supplier at the same time was exactly that – they had waited to see what the pandemic would mean, which, when the most acute situation was over, meant that there was a pent-up need in several areas. It is likely that some procurements were also slowed down during the pandemic years, which further contributed to the pent-up demand. In addition, requirements had changed to some extent, such as an even greater need to collaborate remotely, and cloud travel was everywhere, albeit perhaps at a slightly slower pace.
Given that we realised then, a year ago, that we already had at least a dozen procurements to run in the coming year, we saw the opportunity to conduct a new, more comprehensive RFI. This was nothing new – we have done such RFIs for many clients several times before. But this time we decided to expand the RFI by adding completely new types of questions, needs and requests. In particular, this aimed to capture many of the aspects/issues that we contractually negotiate at the end of the procurement processes. This includes issues and responsibilities that we, from many years of experience, consider reasonable to impose on the supplier and things that we have otherwise realized are good to have clarity on in advance, before the final delivery contract.
We have involved suppliers that we believe are best suited to our typical customer group: small and medium-sized service businesses. Suppliers have received overall scores based on their responses in the RFI process. In each separate procurement, we take the preferences of each customer (based on this we adjust the weighting and score) and obtain a final score resulting in a selection of suppliers. We then ask this sample of suppliers additional RFI questions that are customer-specific. This is an additional category of questions that is scored and added to the total score. We will then have a final well-developed list of the suppliers we involve in the RFP process.
The primary benefits of carrying out this rigorous work at the RFI phase stem from what we always strive for – economies of scale:
- Instead of doing customer-specific RFI processes, this is done for all current and future procurements so that all customers share the cost.
- The time spent in the RFP process (including contract negotiation) is significantly reduced, both for suppliers, for us and for our customers, as much of what was previously handled in the RFP process is already dealt with in the RFI process.
- As the RFI process provides the opportunity for suppliers to gain more customers, the willingness to agree to the general requirements and requests included in the RFI increases.
In addition, in connection with the procurements we have been running for a year, we have made a major change to our new RFP templates. A new approach, which both better captures all the requirements and needs of increasingly cloud-based environments and also builds on the RFI structure. By aggregating the scores from both the RFI and RFP processes, we also streamline and quality assure the tender evaluations. Our further developed RFP templates also provide economies of scale as they reduce the time investment for everyone involved; for us and our customers in the production of the RFP but also for suppliers who are involved in several procurements and can largely reuse a lot of the response work.
Going forward, we are maintaining our RFI database by both adding new suppliers and continuously adding more questions relevant to supplier selection for new RFP processes. Financially, this is made possible by the fact that all customers we help with procurements in the future will take their small share of the cost of an increasingly large first phase of our procurement processes.
And finally, speaking of economies of scale; as we run procurements in all IT-related areas (everything from conference room IT to business systems) and there are a lot of common denominators in all procurements, such as general terms and conditions, procurement methodology, procurement process and evaluation, etc. we are working purposefully to find greater economies of scale through a continuously developed structural capital for procurements.
Contact us if you are facing a procurement process! We are happy to assist in everything from sharing our structural capital and acting as a sounding board to taking full responsibility as a procurement manager.
