To engage in a comprehensive RFP process is a significant investment in time, effort and money. In many cases, businesses should consider alternative approaches.
In the world of procurement, the RFP has become the go-to way for organisations seeking out new Managed Service Programmes (MSP) or Recruitment Process Outsourcing (RPO) solutions.
On the surface, an RFP makes a great deal of sense. Done well, an RFP is contextually complete and deep with data, providing workforce solutions providers with all the information they need to build a detailed, comprehensive proposal. But in many cases, businesses go down the RFP route when a simpler, less time-consuming option would be more appropriate.
What are the alternatives?
Today, RFPs are issued too regularly for simple programmes that don’t require the level of detail that one would expect to see in a request for proposal.
For smaller MSP or RPO programmes (I would suggest that any programme with an annual spend of less than £20 million would fall into this category), the time, effort and money that would need to be invested in a good RFP would be better spent working directly with selected suppliers to shape the right solution for your business.
Instead of an RFP, a concise briefing document issued to a few selected suppliers is the tendering method that makes the most sense. Invite a proposal and pitch from each supplier and select the most suitable, both structurally and culturally.
Alternatively, if you already engage with a workforce solutions supplier in another business department within your organisation and their solution is proven to work, speak to your supplier directly and assess whether there’s scope for expanding existing programmes.
By investing the time you would have spent on the RFP into working directly with the supplier who you already have a relationship with to shape the workforce solution, you will be able to ensure that you procure an MSP or RPO that’s aligned with your business, its goals and challenges.
What are the advantages of not using an RFP?
When organisations issue RFPs, one of the most common complaints is that the bids they receive aren’t of the desired quality. In most cases, this is because the RFP issued is built on a pre-existing template or does not contain the required level of detail.
So why do so many organisations insist on using templated, data-light RFPs? Most of the time, an RFP isn’t necessary in the first place — the solution they require isn’t complex enough for what should be a highly detailed document. Because the RFP is so commonplace, procurement professionals assume that one is necessary for almost every solution.
By following my suggestion of working directly with your preferred suppliers and issuing a concise briefing document, an organisation has more chance of procuring a workforce solution that works for them. This is, of course, the biggest advantage.
There are, however, a number of other latent positives in procuring your next MSP or RPO in a more simple manner. For starters, you will save an awful lot of time. From my experience, the RFP process can stretch beyond a year. Working more directly will speed up proceedings — you could well have an MSP embedded within a business in the same time it would take to go through a full, end-to-end RFP process.
Likewise, this approach will save your business money. Not only will you have more man hours to work on other projects, but you’ll also facilitate a more highly aligned solution.
As most of you working in procurement know, more bespoke solutions produce better financial outcomes. And the time saved will mean that you can get the solution implemented faster, reaping the financial benefits earlier than you would have done if you issued an RFP.
An RFP is still the right approach for bigger projects
All this being said, it’s important to note that an RFP is still the best approach for more significant, highly complex MSP and RPO programmes with an annual spend over £20 million.
Even in this situation, however, you still need to ensure that your RFP is of the required quality in order to attract workforce solutions that work for your organisation. My Guidant Global colleague, Mike Quinn, has some great tips on how to write a great RFP, which I’d encourage you to read.
But to get the full picture, I’d also suggest reading and digesting our two-part guide to 'Creating an RFP for outsourced workforce solutions', where we share our combined knowledge to give you the full picture of what makes for an excellent RFP.
Fill in the form below to access part 1 or click here to download part 2.