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Index >> Contract Management >> The Five-step Plan for Better Bids

The Five-step Plan for Better Bids
By Jon Williams, head of Strategic Proposals at PMMS

So you're one of the lucky ones. Your suppliers always submit bids that fully meet your expectations. Their proposals are articulate and present a compelling story, showing real understanding of your needs. They explain clearly and lucidly how the solution will be delivered. They look professional and they're a joy to read. Really?

Actually if there is one topic that can unite most purchasers, it is complaints about the quality of their suppliers' proposals: "We know they can do better than that"; "Reading this is really hard going"; "They've not even answered the question."

Evaluating proposals for a major project usually condemns the purchasing team to hours of soul-destroying boredom, wading through numerous lengthy documents, looking for the few that offer a glimmer of hope.

Several years ago, I "swapped sides" in the buyer/seller relationship, moving from a senior purchasing role to help sales teams put proposals together: a gamekeeper turning poacher, if you like. And now, after working with the supplier teams on more than 150 proposals in different markets - from IT to insurance, from public sector to private - it strikes me that purchasers are often their own worst enemies.

If I had the proverbial dollar for every poor request for proposal (RFP), invitation to tender (ITT) or other such tome that has landed in my in-tray, I'd be a rich man.

Today's typical purchasing processes, swapping ever-larger documents, lack the very clarity that will lead to success of your project. They also perpetuate an atmosphere of mistrust and drive down quality. It's in your interests to attract the best possible proposals from each of your suppliers and it's in your hands to do so. So what can and should purchasers do to get better proposals from suppliers?

1. Give suppliers advance notice

The typical buyer starts the inadvertent drive towards poor proposals by giving suppliers little or no advance notice: "We've just sent you an RFP to which we'd like a response." Or, paraphrased: "We know you may need to put a team in place to help you write a proposal, but surely your best staff have been sitting round with nothing to do just waiting for the chance to work on developing a solution for us?"

Forward notice and early engagement with suppliers are key to ensuring that they can devote the right attention, line up the right people, and secure the right support from their senior management to respond to your RFP as well as possible.

Next, when purchasers do share dates with their suppliers in advance, these constitute an extremely "moveable feast". The RFP that "will be with you next week" usually materializes the week after, at best. (But hey, it's OK for us purchasers to miss the dates we've committed to for sending out the RFP.)

After all, the customer reigns supreme. But woe betide a supplier if it's late with its proposal: that would show it to be a rank amateur and not a worthy winner.

Short lead times also compromise quality. Midnight-working syndrome is one of the great inhibitors to proposal quality: you frequently impose ludicrously short timescales for your suppliers to prepare their responses.

So it's vital that you take a realistic view of how long potential suppliers need to prepare a response of the required quality. If in doubt, why not ask them how long they think they'll need?

2. Explain the project's aims and drivers

The next wrong step is what I term "Harry Potter syndrome". This is where you don't tell the bidders how to make the project work, give any hint of your real business drivers and evaluation criteria, and generally give the impression that they need a magician to get a clear view of how to make it a success.

A degree of realism at the RFP stage also helps to secure the robustness of the supplier's deliverable once they've won. Most purchasers are on the side of non-disclosure.

They may decide not to tell suppliers about things that could go wrong or obstacles, but let bidders miss them in their proposals and argue about them later - as they inevitably will.

Now, effective sales teams will base their proposition to you on what I term the "three Cs of proposal strategy": customer, capability and competitors. They'll seek to:

- understand clearly what the customer is trying to achieve;
- assess their own capability to deliver the required solution;
- work out how their solution will differentiate them from the competitors.

And there's rarely a prize for anyone other than the winner. As Bill Shankly, the famous Liverpool FC manager, said: "If you are first, you are first. If you are second, you are nothing."

So the more clues you can give them, the easier their task of building a first-class proposal for you will be.

It's also worth remembering before you issue the RFP that you don't have the right to expect your suppliers to bid automatically. Particularly in today's economic climate, suppliers need to make sure they only chase those deals they might win.

So they'll be asking themselves some fairly tough questions - "Is this real? Do we want it? Can we win it? Can we do it?" And if you can't convince them that the answer to each is "yes", why should they invest in a bid that's not likely to succeed?

I worked with a purchasing team in one major organisation recently that was dismayed when one of its suppliers chose to "no bid" for a large contract. "It can't do that!" came the cry. Well, actually, it can. And it did.

Why? Partly because the first the supplier heard of the opportunity was when the RFP landed on its desk. Partly because the customer's purchasing manager had been offhand when they'd asked for further information. Partly because they thought a particular competitor was too strong.

So purchasers need to get themselves into the selling game: you need proactively to convince potential suppliers of the attractiveness of your opportunity if you want them to bid and to offer you their best possible deal.

3. The Fours S's of an effective RFP

To make sure you hit the right buttons with your suppliers, and draw out the best possible proposals from them, purchasers need to make sure they address the four Ss of an effective RFP:

- Specify your requirements clearly: what are the real business issues that you are trying to solve?
- Will it generate responses that will give you an objective basis from which to select the right supplier?
- Sell the opportunity to prospective suppliers (they don't have to bid, after all).
- Provide the clarity and realism needed to ensure that the responses form a sound foundation for the success of your project once the supplier has been selected.

Talking helps, too. Purchasing teams suffer from "it's-all-in-the-document-itis". ("Why should we talk to you? Why should we let you ask us questions, or explore your ideas with us? Can't you read?")

I'm not suggesting that you should compromise fair play between suppliers, or tilt the level playing field in any direction by sharing information with one supplier and not others. But the purchasers I've seen who have drawn out the best responses from their suppliers have always been those who have encouraged and facilitated open dialogue, within defined and reasonable boundaries.

4. It's better to talk than swap documents

This touches on another worrying tendency - that of purchasers to swap mammoth documents with their suppliers at every available opportunity. That ITT, full of 150 "instructions" and 85 pages of terms and conditions - requiring a response the size of a telephone directory from your suppliers - may be appropriate on some occasions. But when I'm working with proposal teams, it often frustrates me to see customers resorting to a "document exchange" when they could have achieved far more by actually talking to their incumbent suppliers, outlining their concerns or desired improvements, and giving them a structured opportunity to make suggestions.

("But hey, let's get some competition going here. That'll keep them on their toes. And we've got a standard ITT on the shelf, so that will take less effort on our part than sitting down in meetings where the supplier may ask us difficult questions.")

5 . Offer high-quality feedback

Of course, dialogue needs to continue after the documents have been exchanged, when the presentations are long forgotten and the contract is signed and sealed.

"Guess why you lost" syndrome is rampant. "You may have spent thousands on your bid, but we can't be bothered to invest much time to tell you why you didn't win." (Or "I know! Let's tell them its price. That way they won't argue. They'll never know") Offering high quality feedback to suppliers is key to helping them improve, to submit a better proposal to you the next time around, and to enhancing your reputation in the marketplace.

So allow me to tell it like it is - most KFPs from purchasing teams are weak. If your chief executive looked at one of these documents, would they be proud of the way in which you are representing your organisation to the outside world? I suspect it's a good thing that many don't seem that interested in purchasing.

None of this excuses the often dreadful proposals that suppliers can produce. I'm also passionate about helping sales organizations to improve the quality of proposals they submit to their customers.

It's time for us to move from the culture of obsessive secrecy and confrontation to one of openness and clarity. It's in your interests as a customer to get the best possible proposals from your suppliers.

The proposal industry is getting its act together. Isn't it about time the purchasing profession did the same?






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