The Revival of the RFP
Would life be easier for salespeople if RFPs didn’t exist?
Let’s take a look at the history of the RFP (requests for proposals). They date back to the mid-1980s, and were primarily used by government agencies that would outsource projects to external vendors. In these cases, the proposal management function within an organization was considered to be more of an administrative task than a strategic one.
The RFP began to evolve in the early 1990s, when more and more organizations started to leverage computer databases and software applications. The RFP process expanded into more traditional business settings – and what had begun as a relatively concise sales document soon transformed into a cumbersome document with many moving parts.
In its current state, the RFP management process consists of numerous documents, complicated compliance standards, countless review cycles, and a single “RFP manager” responsible for shepherding the document from start to completion. As a result, the RFP industry has started to reach a breaking point, with many professionals calling for it to be completely eliminated.
However, because the proposal process represents more than $100 million in total annual revenue for most large enterprises, the likelihood of RFPs going away is slim. Instead, an opportunity has arisen to reinvent how we respond to them.
The Fatal Flaw of the RFP
One of the outcomes of the last economic downturn has been the greater importance organizations place on selecting and “vetting” their suppliers. At a time when company professionals are expected to think strategically and maximize their win rates, they are faced with higher expectations, more complex and lengthy questions, and an increased amount of pressure to complete “winning” RFPs – all at once.
During the RFP creation process itself, the proposal team is usually too busy filling in the answers and churning out proposals quickly, leaving them no time to review the content and ensure that each response is strategically aligned to cater to the potential customer’s needs.
A Positive Prognosis
Over the past several years, the rise of technology solutions has provided a light at the end of the tunnel. While it doesn’t completely eliminate all challenges, today’s technology has introduced the possibility of streamlining the process and increasing overall effectiveness in responding to RFPs. These solutions can centralize RFP content and help eliminate organizational silos.
Additionally, RFP managers and subject-matter experts are now far better equipped to overcome the challenges that have plagued the industry for decades. While technology is making a significant difference in the way content is stored and discovered, an overhaul of the strategic function is also required for complete reform and transformation.
The RFP: A Road to Recovery
RFP managers must be prepared to educate their broader organization on the importance of the RFP process and how the combination of modern technology and changed behavior can have an impact on the company’s bottom line.
Specifically, those working in an RFP function must work within their organization to:
- More clearly define the RFP process and build logical workflows for their teams and content
- Manage the timeliness and relevance of content in a central location for easy access
- Personalize content based on individual RFPs
- Track progress, measure effectiveness and efficiency, and adjust processes across all RFP functional areas to deliver the greatest value at the lowest cost
Organizations such as consulting firm Wipfli LLP and Cincinnati-based regional bank Fifth Third Bank have done just this by streamlining the RFP management process and hosting up-to-date content in a single cloud-based content management system. In doing so, they’ve been able to work on any device across a variety of geographies – streamlining the process and ultimately winning more business.
While the transformation of the RFP process is likely to continue, organizations need to put a stake in the ground today. The role of RFP management will continue to adjust, but the evolution of the process from administratively burdensome to a critical business function is already occurring. Enterprises must realize and leverage today’s technologies in order to stay competitive. Leading companies that wish to remain relevant to their customers will reinvent how they manage and respond to RFPs in order to be more efficient, productive, and competitive businesses.