Procurement professionals at most organizations dread the request for proposal (RFP) process – and for good reason. This journey is rife with costly roadblocks and pitfalls. Even firms that successfully navigate the RFP process without suffering major setbacks may find themselves entwined in one-sided service agreements designed to benefit vendors. This is especially true for organizations looking to upgrade their telecommunications infrastructure, as most overspend on service plans and hardware by 30 percent or more, CIO reported. However, such an unfortunate budgetary outcome is entirely avoidable.
How? Procurement teams must learn from the mistakes of their peers and embark on the telecommunications RFP process knowing how to to avoid those mistakes. Here are four of those errors and strategies for avoiding them:
Failing to develop robust evaluation criteria
Businesses tend to focus considerable effort on core RFP components, including the project goal and scope. This makes some sense as these portions of the RFP offer potential vendors great insight into how their solutions might fit into mission-critical operational workflows. That said, these overarching details matter little if suppliers do not understand how they will be evaluated on a basic level, according to Tech Republic. Without this baseline guidance, vendors are likely to provide incorrect and uneven responses. This might knock high-quality providers out of the running and therefore prevent organizations from obtaining effective telecommunications services. The ideal preventive action is simple: Procurement personnel must work with business and information technology leaders to develop vendor evaluation criteria and embed this information within their RFPs.
A good number of businesses do not even consider distributing requests for information (RFIs), thinking these superfluous when paired with RFPs. This is not the case, the Institute for Supply Management argued. RFIs are effective tools for narrowing down large pools of potential suppliers, thereby speeding up the RFP process. These assets also alert vendors to the fact that they must compete head-to-head with peers and can push them to offer incentives. On a more basic level, RFIs lend businesses insight into the telecommunications marketplace and various services available to them.
Firms that choose not to send out RFIs miss out on this data and enter the RFP process less prepared and with an overwhelming number of suitors.
Negotiating after selection
On the surface, the idea of sorting out service-level agreements (SLAs) following vendor selection seems logical. However, procurement teams that do this lose all of the leverage they gained by stoking competition via the RFP process. They convert "a competitive bid to a single-source initiative," as ISM puts it. This is a less-than-ideal position from which to negotiate a favorable SLA, as vendors have no incentive to tailor their services and prices to fit the needs of their partners. What's the alternative?
Negotiating with multiple final-stage suppliers is the best solution. This strategy fosters competitive dealmaking which, in turn, speeds up the negotiation process as telecommunications vendors are forced to act quickly and respond to all communications in a timely manner.
Avoiding RFPs altogether
Some businesses avoid the RFP process altogether by continually renegotiating their existing telecommunications service contracts, Inside Wire reported. Why? It's the easy decision. As mentioned above, testing the marketplace via the RFP process requires time and resource commitments that a select number of firms are not comfortable making. So, many just maintain existing supplier relationships. This is an immensely expensive strategy. Organizations that do not re-evaluate their telecommunications services and search for new offerings often end up overpaying for potentially outdated infrastructure.
Working with a reliable external procurement partner is the most effective solution for sourcing personnel looking to overcome their RFP fears and implement cost-effective, cutting-edge telecommunications services designed to support businesses in the digital age.
Here at Teligistics, we help companies of all sizes navigate the enterprise telecommunications marketplace with confidence through our advanced telecommunications expense and asset management and sourcing platforms. Connect with us today to learn more about our services and solutions.