By Chelsea Webster & Richard Simpson, ParkPlus System
Many in sales might suggest this should be considered a four letter word. Having experienced two sides of this process, I know it can be a great tool and it can be a disaster, for any group involved. My experience is that everyone involved in the development of an RFP has the best of intentions to provide the best value or benefit to the organization.
Fundamentally issues are often created right from the beginning. Depending on your perception you will measure value or benefit in different ways. How is the organization structured? Does it have supply chain management, strategic sourcing and/or procurement departments? How do these departments integrate with the needs of their internal clients, i.e. other departments? How are they measured and compensated?
Do you get what you pay for? I’m not suggesting you have to pay the most to get the best. If you’re buying a widget or commodity item then price might be the best measurement. However when it comes to services or more intangible purchases it becomes very hard to measure. RFPs that are well designed and thoughtfully put together end up being far more constructive for the organization trying to measure what the market is offering and will likely yield better quality responses for review.
As a salesperson, there have been many RFPs that I haven’t responded to purely because the initial document showed the process would be arduous and painful to go through. Ironically it is often the same for the employees trying to manage the process internally, or it is really easy because they have so few responses to review. Does this bring the best value or benefit to the organization? Alternatively, I think we can all agree that sometimes the RFP process is merely for optics, to check a box and give the business to the desired proponent.
Here’s a personal pet peeve: non-negotiable terms.
If you are trying to build a long-term fruitful relationship with a service provider why would you not allow for negotiations in the process? Too often, embedded contracts or specific contractual terms in the RFP limit or eliminate discussion, negotiation and reciprocity. At the end of the day it does not create the best value or benefit for the organization.
What can be done? Well, in our opinion, there are a lot of things you can do, regardless of what perspective you’re looking at the procurement process from. Read on to hear our take on RFPs in the parking industry from the vendor, procurement agent, and end user perspectives.
Procurement Perspective – The Vendor
Finding something to respond to
Let’s start by addressing step one: finding a parking related RFP. There are dozens of places to look for these documents, from industry associations (Parking Today, Parking Network, International Parking Institute, etc.) to government posting hubs (Merx, MuniSERV, Government Bids, etc.). Then of course each organization posting an RFP is likely to have it on its own website, and if they have a good social media person then likely on all those channels as well.
These are all great places to look, however that’s a lot of work to constantly scan all these sources. A few suggestions to help you on your quest:
• Sign up for weekly email highlights from bid websites
• Create a weekly routine of checking key sources
• Use the search function or “Ctrl F” to help you sort through the RFPs efficiently
• Try a Google Alert for some key words
Approach with caution
The next step is actually downloading and reading the RFP. These can be dozens of pages in length (or significantly longer!), technically complicated, and involve acronyms or terms specific to each organization that you’ll need to decipher. For example, a parking enforcement officer could be the same thing as foot patrol and also equivalent to a mobile citation officer. Taking each term in context is important to truly understanding what the RFP is asking for.
Once you’ve read the document, there is a strong possibility you’re now rolling your eyes at some of the requests. “Are these people joking? The solution they’re looking for is so ________!” (Go ahead and fill in the blank with outdated/obscure/unnecessary/expensive/inefficient/another fitting term.) This leaves you with a choice. You can either conform your product or solution to the description of what is being requested, or you can propose the solution you have. I’ll suggest there’s also another opportunity, which is to present both versions. Here you can meet the stated needs of the RFP, but also illustrate the differences and show why your solution could be a better fit.
Talk it through
Or, perhaps you’ve just misunderstood? Consult with someone else in your organization to see if they interpreted the request the same way you did.
If there is any opportunity to speak with the potential client in advance, before the parking RFP even comes out, jump on it. A phone call, coffee, on-site visit, or even exchanging emails can be beneficial. First, it will put your name and brand on their radar. Second, it will give you the chance to make a good impression if you ask a thoughtful question. Third, you may be able to clarify some details and submit a response that is more in tune with what’s being requested.
The writing process
And now we’ve finally gotten to the meat and potatoes of the RFP – writing your response. A few important tips:
- Ask clarifying questions
- Be sure to answer all questions
- Address objections (either stated objections or just potential ones)
- Provide competitive pricing, but leave some room for negotiation
- Include diagrams or images to explain complex solutions
- Clearly state that your product or service meets all the outlined requirements
- Proof read your response (or ideally get someone else to) before printing and sending
- Create a calendar with key dates you’ll need to hit to ensure your response arrives on time
If you’re finding that writing a response to an RFP is too time consuming or too challenging to explain complex solutions, there are a couple ways you can handle this. First, you can use a templated RFP response (like Quosal) to choose a layout, plug information in, and generate a good looking document to submit. Alternatively, you can use a professional RFP reviewing service (like Source One) to go over your RFP for content, format, and response quality. Of course these options do have a cost associated, but could prove to be invaluable if you win a bid.
Don’t forget about your staff
Overall, answering an RFP can be an arduous process from the point of view of the respondent. Making sure that sales staff have the best training possible, plus resources like past responses and examples, is critical. Provide internal support like a proof reader or a senior salesperson for junior staff. And always, always, always ask to be debriefed if you’re not the winning bidder!
I know most of us would like to cut out the RFP process entirely – but until we get there, we might as well make the best of it!
Procurement Perspective – The Purchaser
Frequently the procurement department plays the role of gatekeeper between vendors and end users; read on to find out how to prepare and execute the best parking RFP in your organization, no matter what side of the RFP fence you sit on.
This can be a polarizing topic. On one hand, it’s a huge time saver for procurement to use a template rather than write a new RFP every time. Additionally, once the legal team has reviewed and approved it, you can move forward with confidence that what you are putting out has all the necessary clauses and scenarios covered. Templates for a wide variety of RFPs are available online at no cost (www.projectmanagementdocs.com or www.rfp-templates.com just to name a few). You can cover all the major topics so you don’t have to redo the format each time. Finally, a template provides a standard set of evaluation criteria, making the process familiar and more efficient over time3.
On the other hand, a template often uses language specific to one industry or product and so you can’t just skim it over without making changes from one RFP to another. Also, a cookie cutter request may unintentionally exclude or alienate some vendors that may have lower prices or better products and services by including clauses you don’t need and that these potential vendors can’t meet (and therefore won’t bid on your RFP).
Procurement departments face a variety of challenges that other groups rarely consider. These issues make purchasing difficult or even impossible; however, they can be addressed and overcome. Some of the often overlooked challenges are described below.
- Authority: Does the department have the authority to sign contracts and make purchases? Are they able to negotiate terms or pricing with RFP respondents? Making sure a corporate policy which clearly addresses the authority a purchasing department has reduces time spent going back-and-forth, and avoids invalid contract awarding or signing.
- Responsible sourcing: This has become prominent in the last decade, where potential business partners are vetted based on policies around employee welfare, product testing, environmental considerations, etc. It can also negatively impact brand reputation if an irresponsible purchase is made. Knowing what criteria your company follows and ensuring vendors are held to the same standards is difficult and requires clear policies. One option is to create a mandatory questionnaire as part of the RFP process, and requesting documentation where appropriate.
- Digital innovation: Both a challenge and an opportunity, digitizing the RFP process is becoming unavoidable as technology progresses. For procurement, this means completely overhauling the evaluation, selection, and implementation of RFP submissions1. New software programs are a daunting task when you consider the time commitment, buy-in required, and staff training needs. Be sure to provide ample time for this progression, as well as offering accommodating alternatives to those employees unable to work with the new technology. Part of the opportunity here includes the by-product of a searchable RFP response and vendor database, which saves an immeasurable amount of time for procurement staff when they need information.
- Alignment: are business and procurement processes working towards the same objectives? Clearly outlining the desired outcome of an RFP process will help ensure that everyone involved in the project benefits. For example, addressing what your organization will do if presented with a new technology or other innovative solution (something that was not described in the RFP), and being sure you are aligned on how to proceed, is critical to a smooth and conflict free purchase.
Since procurement itself isn’t a tangible asset, it’s important for the department to add value in visible ways. Managing an RFP with a primary goal of cost savings is often the focal point, however there are several other methods that contribute positively to the organization.
Make vs. buy decisions: When a request from the end user is approved to move to the RFP stage, the first hurdle is to decide whether the organization can and should produce the product or service internally. Perhaps there is a readily available resource inside the company that can be used immediately and at no additional cost. Or, maybe the best option is to purchase a ready-made solution.
Corporate goals and objectives: Often the procurement department is tasked with cost savings. However, knowing the long terms corporate goals and objectives will result in more informed decisions, and even more cost savings in the long term (rather than making a less expensive, short term purchase).
Risk mitigation: A standardized process for evaluating risks within each RFP will make purchase decisions more transparent, and more likely to receive support and buy in from all involved parties2. Procurement sees the widest variety of potential threats and can implement techniques to minimize risk in the RFP process.
Fostering Relationships: Since procurement is the initial contact point for all purchasing and sales relationships, it follows that they get to know vendors over time. Long standing or repeat vendors are potential candidates for future projects and joint research and development on new technology and products. Procurement can also use experience with individual RFP respondents to create efficiencies such as fewer reference checks. There may even be the possibility of mergers or joint ventures with potential suppliers over time3.
Biases and Code of Conduct
In the ideal world, the procurement department at any organization is completely unbiased. A pre-set list of evaluation criteria is determined and each RFP response is considered solely on what is proposed. Often in the real world, certain companies are favoured (for a plethora of reasons). Worse yet, some vendors and sales people purchase gifts or expensive meals or outings for the RFP selection committee members to try and influence their decisions. Although many companies have policies against accepting gifts, others don’t – so it’s preferable to be transparent about anything you’ve accepted from a potential vendor. Unsure what’s okay? Use the ‘headline’ test: What would happen if this was published on the front page of the newspaper?
Another bias that comes into play is pricing. For procurement departments, their primary goal is often to obtain the products and services at the lowest possible price. Avoid confusion by weighting the importance of each evaluation criteria and sticking to those values. Take into account the end user’s satisfaction and use of the purchase, and ask for their input where appropriate4.
Another important step is to align the reward system with the intended outcome. Having goals and objectives focus around internal customer satisfaction, and meeting a budget exactly – not cutting costs at any expense – are some examples. That way performance incentives (as in that bonus you’re looking for after you arrive under budget by 10%) will not result in sub-par purchasing decisions. Value of product should always take priority over cost.
Invitation for bid solicitations: When price is the most important
(or only) factor in a purchase decision, this type of request is your best
bet. It ensures you get the best prices a supplier can offer, avoiding all negotiations. It’s also convenient because the contract takes effect immediately upon award, and guarantees an on time completion in return for payment5. You’ll also open it up to more responses due to the minimal vendor criteria requirements.
Requests for Qualifications (RFQ)/Request for Information (RFI): You can learn more about a particular industry or technology (license plate recognition, parking sensors, or parking apps for example) without a need to purchase by putting out and RFI. You can then use the information you gather to put together a great RFP when the time comes. With an RFQ, you have the chance to learn about major players in the industry and what synergies exist.
First and foremost, make sure you align your RFP process with the procurement policy of your organization. Three key factors are that the process is open, fair, and transparent. Other considerations for getting the best possible responses include:
- Issue RFPs during off-peak season (February/March and July6), to ensure you get the best quality responses and a larger volume of proponents who submit a proposal.
- Learn about the needs and expectations for the product that the business unit has in detail, so you can pre-emptively post FAQs and answer respondent questions. This will also enable you to award the RFP to the vendor who best meets the needs of the end user.
- If you’re new to the process and drafting an RFP, check out New Media Campaigns’ guide to writing a great RFP for a great outline. Even if you’re issuing your 200th RFP, this format does a great job of keeping it simple, and may provide inspiration on how to better organize content.
- Post your bids with sites that compile RFPs (Merx, BidSync, etc.); setting up an account will make posting them faster, especially if it’s a repetitive process for you. BUT! Don’t stop there. Use social media accounts your organization has to advertise the RFP. This will also provide content for the account and likely garner more attention for the channel.
- Be sure to focus on your procurement people by providing training and ensuring they are up to date with new technology, policies, and industry practices7. Inviting them to attend parking conferences or other events will help give them a deeper understanding of the products and services on the market.
Procurement Perspective – End Users
We’re wrapping up this thrilling article with our take on the end user perspective of the RFP process. Here you’ll find out the good, the bad, and of course our own musings on how to make life easier as a user of the product or service purchased for your parking business.
Qualifying vendors: Everyone has a unique business and team. Your organization might be extremely environmentally conscious, or maybe empowering staff with training and knowledge is paramount. Perhaps you only buy local, or only from suppliers who are equally as concerned about workplace diversity. Whatever the requirements are, a procurement team can add questions to the RFP to filter respondents. Only responses from qualified vendors are passed along for consideration.
Qualifying products/services: Are there certain technical requirements your project has? For example, the solution must meet regulatory guidelines, or have a specific feature like a Windows smartphone app. By detailing what the minimum standards are, the procurement department can vet potential vendors in an unbiased way. Vendors are also clear on what products and services are needed so they can clearly explain how the proposed solution meets the needs outlined in the RFP.
Staying on time and on budget: Having someone keep an eye on costs and make sure the project moves forward on time is a great asset. A procurement specialist can likely even take the stress of contract negotiation off your plate.
Expert advice: Get access to experts on legal clauses, industry standards and best practices, and contract negotiation – and that’s just internally. With an RFP you also get access to multiple experts in supplying the solution you need. Use their suggestions to get a well-rounded solution, or incorporate new tech you didn’t know applied to parking. Rely on the collective wisdom of respondents to guide you in the right direction.
Access to products/services: Sometimes, and RFP will give you access to new platforms you would otherwise not be able to purchase or offer your customers. A lowest-cost RFP may let you install pay-by-plate tech and offer people using your parking facility new mobile payment methods.
Extras: Often, respondents will offer you products or services outside the realm of what you asked for. Sometimes you’ll see a solution is complex and needs multiple components, each one of which increases the cost and complexity of the solution. Knowing your budget will help curb impulsive or not-well-thought-out purchases. Another downside is the upsell pressure that a successful RFP respondent may employ once you’ve committed to a contract. Stay open minded about suggestions (they are the expert!), but firm if you know that piece is not currently possible.
You don’t know what you don’t know: Computer processing speed doubles every 18 months and technology is advancing at an exponential rate (remember Moore’s law?8). Even if you follow all the biggest players and scour social media daily, it’s extremely difficult to keep up with new technology. Self-driving cars and smart cities are just a few of the phenomena we’re seeing impacting the parking industry so far. I can’t even imagine when artificial intelligence and the hyper-loop and implantable devices9 arrive. The point is that you might not know the latest parking trends, the latest tech, or how they fit together. And if you don’t, how do you know what solutions to look for in an RFP response?
Complexity of the need: Purchasing a parking solution is complex. What technology will you use? What hardware do you need? How do these things work together? How many will you need? Does this work with existing equipment? All these things add up when looking to purchase a new parking management system. It’s hard enough to stay on top of all these things, let alone try to explain every eccentricity to a procurement specialist who isn’t a parking expert. This can easily lead procurement staff to ask the wrong questions and evaluate responses based on incorrect assumptions.
Lost opportunity to develop supplier relationships: By running the RFP through a procurement department, the chance to meet and get to know vendors is removed. Although it’s debatable if this is a good thing, it definitely has some negative side effects. Users can’t ask questions and get to know product options. They can’t “kick the tires” of products or take anything for a test drive, because as we all know the communication (and influence) channels are closed during the RFP process. And this definitely doesn’t lead to a supplier intimately getting to know user needs, never mind the potential to do some product development together.
Being open and transparent about your current situation, needs, and desired outcome will help to minimize the negative impacts of and RFP for the end user. A meeting with the end user of a purchase could prove invaluable for both vendors and the procurement team – as both should genuinely be focused on this set of users.
This can certainly be argued from both sides of the coin. On one hand, the cost of the RFP process can be massive – negating and savings obtained10. Also, the procurement department is a constant middleman, presenting an opportunity for miscommunication or unnecessary delays. On the other hand, having an expert save time sifting through minimum requirements is just like having human resources pre-screen resumes – invaluable. It also helps identify legal concerns and do a risk analysis. Plus it often proves to be a money saver for organizations.
Hopefully this piece has provided a perspective that you hadn’t considered before. Often in business, when we’re faced with a task (like writing, responding to, or using the result of an RFP), we put our nose to the grindstone and get to it. Taking the time to consider another way of going about the task is a great exercise. Who knows – by using the content here you might even make a new ally. As always, we’d love to hear your feedback, so don’t be shy about getting in touch!
- Think this is just sci-fi? Check these out: https://wtvox.com/3d-printing/top-10-implantable-wearables-soon-body/
- http://beyondreferrals.com/issues-when-issuing-an-rfp/ https://www.periscopeholdings.com/blog/4-ways-procurement-has-to-change-in-the-postmodern-erp-era