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When it comes to your IT procurement, having an efficient and professional RFP process can make a critical difference.
Bain & Company’s April 2023 Perspectives on the Macroeconomic Environment for Software report highlighted that while IT budgets for 2023 have increased over 2022, tech leaders feel pressure to reduce spending.
CIO and IT leaders are tasked with ensuring transformative technology is in place to drive business innovation and revenue while managing (or reducing) costs.
Today’s Request for Proposal (RFP) process is much more than IT procurement, as investments must support specific business outcomes in a cost-conscious climate.
IT Procurement and the Tech RFP Process
IT procurement is focused on guaranteeing the proper acquisition of tech systems and solutions, but with the right process in place, it can also help to save time, money and resources.
Procurement teams typically use RFPs to detail a project and invite suppliers to submit bids. However, the actual RFP process is easily overlooked, and many mistakes are made that cost money, time, efficiency and more.
A significant barrier companies face with their RFP process is the competing priorities of the procurement and IT teams. The procurement team is focused on costs but often lacks technical expertise when making decisions. Meanwhile, the IT team is focused on business results but may not consider the costs involved.
Understanding the most common mistakes before and during the RFP process ensures your IT procurement process runs smoothly and, more importantly, produces business results.
Let’s look at a few common areas where RFP mistakes often occur.
#1. Wasting Money
Money is one of the biggest reasons companies look to improve their IT procurement and RFP process. They’re looking to reduce costs and if the process isn’t well defined, it’s too easy to miss critical opportunities.
A poorly executed RFP process will financially impact your business in countless ways. A poorly written or defined RFP for potential vendors can lead to missing out on competitive bids that could offer cost savings or added value.
Other potential impacts may include:
- Inaccurate budgets
- Unforeseen costs
- Delayed timelines
- Low-quality bids
- Legal or contractual issues
- Resource wastage
Ensuring the project parameters are properly defined when creating RFPs gives you a clear picture going into the process. Plus, you’ll be able to negotiate from a position of strength throughout the IT procurement process.
#2. Lack of Stakeholder Alignment
One of the fastest ways for the RFP process to fall apart is by not having everyone on the same page.
You need to ensure all project stakeholders are engaged, informed, and aligned from the outset of the RFP process. Strong collaboration and communication are key; if any stakeholders feel they aren’t being consulted or included, it can strain relationships.
Plus, conflicting stakeholder goals and expectations can quickly make the RFP’s intended objectives unclear. This lack of clarity can result in disagreements on project scope, requirements and assessment criteria, thereby complicating the creation and execution of a successful RFP.
Any lack of alignment makes it challenging to create an RFP that is clear and coherent. This affects potential vendors’ willingness to take part, or you may end up with bids that aren’t the right fit.
Misaligned expectations with stakeholders can cause delays during the process as there may not be agreement on the best solution.
#3. Unclear Vendors
When entering the RFP process, you want to negotiate from a place of strength. But that simply won’t happen if your IT procurement and RFP process isn’t locked down.
The entire process will slow down if your vendors are unclear or confused. If they receive an RFP with confusing requirements, they’ll seek clarification or simply make their interpretation and completely miss the mark.
Remember that asking for too many options or including too many vendors in the process can also be a mistake. Sometimes, vendors look at the pool of participating vendors and decide their odds of winning the proposal are slim to none, so they opt out.
The goal is to be organized, clear in your requirements, and ready to negotiate BEFORE engaging with potential vendors.
Streamline the IT Procurement Process with Professional RFPs
By understanding common RFP mistakes that often happen during the IT procurement process, you can help ensure you get the best solutions at the right price.
To learn more about these mistakes and others to avoid or improve your technology RFP process, check out our new guide.
From Budgets to Business Results: Identifying and Avoiding Costly RFP Mistakes covers nine mistakes to watch for when running your technology RFP process.