Ahhh, the elusive RFP, or Request for Proposal for those lucky ones who haven’t had to deal with this process before. Most people have some sort of a love/hate relationship with them, but the real question is, when should you send something to RFP? A lot of companies have a strong attachment to the RFP process, but the truth is you could be wasting a lot of time and still not getting the best result. Now remember, the purpose of an RFP is to get a level look at multiple companies who are offering the same product/service. Let’s walk through a couple different scenarios and take a look at when you would or would not achieve that goal through an RFP.
In this first scenario, your company needs to acquire product and you want to get the best price. Seems like a perfect time to send to RFP and get a few quotes that you can compare “Apples to Apples.” This may be a good chance to send out an RFP, but you have to make sure you have accounted for every aspect, which unless you have the proper resources could be difficult. I came across an RFP like this recently. The company wanted us to bid out a certain set of products, and then was going to make their decision based off the proposals. Problem was, what they were asking for was not the best solution and was only a small piece of the whole project. The interesting thing about product, there really isn’t too much margin involved all around, so no company is really putting their prices out of industry standard to make profit. Now there may be some that give it away, but you have to ask yourself, if a company is giving a product away there are two potential situations. First, is that they are just such a nice company, that doesn’t want to make money. Alternatively, they want to make their money off you in another way. Now obviously, (unless it’s your siblings company) they are trying to make money off you in another way. That’s not necessarily bad, but you can’t properly judge an RFP without considering the whole picture of everything you need or you will end up eating unexpected costs.
Stay tuned for the next installment!