Time and timing
In most procurement processes, Request for Proposals (RFPs) are issued and they detail the timeline for the process. Invariably deadlines are missed (and some by large measure). Whatever time you may think it takes to complete a bid process, add more time between each stage. Suppliers will appreciate it and you will have more credibility internally.
Data
In order to obtain a response to an RFP that will be of optimal value (and to maintain integrity), data supplied to bidders needs to be accurate and complete. Whatever the category; airline, hotel, car, travel agency, card, etc., a supplier needs to fully understand the opportunity. Undervaluing the bid because of bad data will yield a less than competitive response, while overvaluing may cause problems in the future should a company not be able to produce at the levels proposed. When asking for data from the supplier, only request data that is relevant to the RFP decision. A request for data that is not relevant becomes extremely frustrating to suppliers and is counterproductive.
Requirements
In order for suppliers to respond effectively, they need to understand the prospective client’s business requirements. As an example in a travel agency bid, it would be critical to understand if the company has a requirement for VIP servicing; perhaps they have a significant amount of hotel-only reservations that would require a hotel desk, or the account requires multilingual agents in Canada, etc.
Bidder list
Companies are inviting poor results if they do not take the time to match up their culture and requirements with prospective bidders. It is costly for suppliers to bid on new business, and it takes time for the procurement team to review each proposal. Make sure that each bidder has a realistic chance to be a winner in that particular procurement project. Incumbents should always be included, even if experience has been problematic.
The right team
Make sure that the right team is assembled from your company to effectively evaluate the bidders and their proposals. Some procurement projects have a technology component, so it would be advisable to have IT/IS represented on the team. Depending on the category, it may be a good idea to have a cross-functional group representing different parts of the company and various user groups.
Evaluation factors
Try not to keep suppliers in the dark in terms of what is important to your company in this particular sourcing initiative. Giving them as much information as possible will only improve the responses.
Lengthy and irrelevant RFPs
This generally reinforces the theory of “garbage in/garbage out.” RFPs that result in 100-page responses are a waste of paper and time. Virtually nobody is going to read that much material, and the supplier is going to provide standard marketing-produced responses.
Print vs. eRFPs
Consider the use of Electronic RFPs (not to be confused with eAuctions) that can provide improvement with the problem of cycle time and be more succinct in responses to RFPs. The ability to evaluate responses can be improved by using an eRFP tool as well. To improve decision clarity, you can use an eRFP tool’s automated functionality to calculate scores weighted by your choice of emphasis.
Objectivity in reviewing RFPs
One of the biggest dangers in a procurement process is failing to establish an objective methodology of evaluating suppliers. Without a formal structure for reviewing RFPs, evaluators fall into the trap of becoming overly influenced by marketing and sales presentations.
Be thorough
This is a complex industry with many component parts. A procurement process for almost any category within travel represents a large purchase. It requires a very detailed and deliberate process. Pre-evaluation of suppliers needs to be completed; assessing accurate and consolidated data is a requirement; developing a strong evaluation team that includes subject matter expertise; producing a well crafted RFP; having a comprehensive process in order to evaluate bidders objectively, and allowing yourself time are all extremely important components of such an important sourcing process.
