5 Ways to Improve Stakeholder RFP Management

Could stakeholders be the key to effective RFPs? You can improve your RFP outcomes by encouraging stakeholder engagement. Read how!

In your business, it’s unlikely that the prospect of issuing an RFP will inspire excitement. Understandably, the sentiment is widely shared by stakeholders and procurement professionals alike. In fact, some stakeholders actively try to circumvent procurement and RFPs altogether.

It’s unfortunate because the whole purpose of an RFP is to make vendor selection easier while protecting the organisation. Most would agree this is an admirable and essential goal. So, how did we end up here — with our colleagues doing backflips to avoid working with procurement? More importantly, how can we change the story, collaborate with stakeholders and shift the perception of procurement?

Admittedly, these are complex issues. And, they can’t be solved entirely with a list of quick tips and tricks. However, there are a few things you can easily do to begin building better stakeholder relationships that bolster compliance and collaboration.

Why does stakeholder engagement matter?

As with most conflicts, issues between procurement and stakeholders stem from a difference in perspective. Stakeholders see their needs. Procurement sees the need to protect.

When a stakeholder encounters a problem, it typically doesn’t take them long to propose a solution. They’re ready to move forward. So, submitting the project to procurement feels like a bureaucratic roadblock that may extend the solution ETA by weeks or months.

On the other hand, procurement practitioners have established parameters and processes for good reasons. Procurement’s mandate is to maximise value, reduce costs and minimise risk. Indeed, the organisation likely has a procurement policy that details how it accomplishes these things.

So, what happens when stakeholders feel that it’s a disadvantage to work with procurement? Stakeholders backchannel with a preferred supplier, steer clear of elements that would trigger an RFP according to the procurement policy or just let the problem go unresolved.

None of these outcomes are good for business. If stakeholders avoid your RFP process you’ll face a long list of ongoing challenges. For example, spend visibility decreases, costs increase, vendor accountability is unchecked, money is left on the table and a blind spot of potential risk opens up.

Ultimately, achieving better outcomes for everyone is pretty straightforward. When both sides practice empathy as they focus on achieving their goals, there’s more middle ground than you may think — but stakeholders must feel invested and engaged to make it successful. Here’s how.

Take a consultative approach

In procurement, we talk a lot about the importance of supplier experience but spend very little time focused on what the purchasing process is like for end-users within the organisation. A recent discussion about the new era of procurement proposed that practitioners should view themselves as a consultant to their business and stakeholders.

Just like consultants, procurement should endeavor to cultivate a rapport with users. Think about it. As a consultant, people come to you in procurement with problems they need your help to solve. You subsequently deliver value in the form of the expertise you offer. Your job is to listen to the client, work with vendors on the client’s behalf and find the best possible outcome.

Ideally, with this approach, the client sees the benefits of your insight and wants to engage with you the next time they have a need.

Regularly review and revise your procurement policy

Have you ever had a stakeholder ask you, ‘Do we really need to issue an RFP for this?’ and thought they had a good point? If so, you may need to consider revising your procurement policy. Your business is constantly changing. As your needs and goals shift, you should review your procurement policy to ensure it’s serving your users as well as the business’s needs.

For example, if your company’s overall goal is growth, then momentum should be a priority. Review historical spend and consider increasing the total contract size threshold for issuing RFPs. A small increase in the amount may save time for you and the stakeholders significant time and effort. Are you preparing for an M&A transaction? Then risk management should be a big consideration. Review your guidelines regarding multi-year contracts. Are you focused on efficiency? Explore how RFP automation could enable faster processes and reduce the time required by the stakeholder.

Regardless of the organisation’s goals, its procurement policy should support the consultative approach mentioned above. So, as you review, explore the process from the stakeholder perspective. How could you make the user experience faster? Easier? More informative? Your procurement policy defines how and when stakeholders should engage with you, so make sure it makes sense.

Encourage proactive procurement

One of the biggest challenges is balancing a stakeholder’s sense of urgency with the need to be detailed and thorough in the RFP process. While there will always be unexpected situations, most stakeholder purchasing needs don’t arise and become mission critical in a single day.

As you build relationships with stakeholders, reinforce the importance of thinking proactively about their future needs. In addition, following up with department heads and decision-makers regularly empowers them to initiate projects early instead of waiting until the last minute.

Be a collaborative partner

Generally, people want to do the right thing, but approaching procurement can be intimidating. To inspire collaboration, adopt an open-door policy and nurture collaboration between stakeholders and procurement. It’s difficult when you’re on a lean procurement team and everyone is busy, but making yourself available and approachable to answer questions will pay off in the long run.

As you talk with your colleagues, offer yourself as a resource. Ask for feedback about previous experiences with procurement and be open to suggestions. Explore resources, exchange ideas and create connections. As you field requests and questions, try to focus exclusively on solving the challenge together rather than any barriers that may exist.

You can also draw on stakeholder expertise throughout your RFP process. After all, when it comes to the problem they need to solve, they are the experts. In addition to working with them to establish RFP criteria, you can draw on their experience for vendor selection, proposal scoring and evaluation.

Ideally, the additional visibility and collaboration not only deliver better immediate outcomes, but also create champions for the procurement team.

Make the RFP process more efficient

Speed is always an issue when it comes to stakeholder satisfaction with the RFP process. Fortunately, there are lots of ways to make the RFP process more efficient while still mitigating risk.

Ask the right questions for right now

Far too often, RFPs include questions about routine matters of very little concern. For example, almost every RFP asks about the company’s history. However, the answers are rarely interesting or compelling. So, why include it?

When writing your next RFP, consider each question and ask yourself: “Has this question ever yielded an answer so compelling (or objectionable) that it influenced vendor selection?” If the answer is no, get rid of it. Save these questions for later in the process.

Try a multi-step approach

Speaking of later in the process, have you considered a multi-step approach? If you regularly issue full-length RFPs to more than six vendors, you’re almost certainly spending hours answering questions, coordinating scorers and evaluating responses.

Try a two-step process. In your first RFP questionnaire, focus on high-level, deal-breaker and differentiator questions. This approach will help you narrow your selection to a short list. Then, you can ask your finalists more detailed questions that get into the nuts and bolts of operation and risk management.

Use technology

A recent study showed that nearly 66 percent of procurement professionals manage their RFPs using Word, spreadsheets and email. While these tools have the advantage of being familiar and readily available, they’re simply not designed for the RFP process. RFP management software cuts the time required to manage an RFP by up to 50 percent by centralising everything including stakeholder input, vendor questions, RFP scoring and more.

At the end of the day, improving stakeholder engagement in the RFP process improves outcomes for everyone. Indeed, increased stakeholder involvement can result in better spend, vendor and risk management. But, it won’t happen overnight, so start now. If you have tips on how to get stakeholders engaged in procurement, share or comment to keep the conversation going.