Tweet

Accountability and Outcome is a Shared Responsibility in the RFP Process

Guest post by: Jon Hansen

Article Overview: It never fails to amaze me that given the amount of research which goes into the production of each PI Window on Business Show, there are always a number of new insights that come to light during the live broadcast. In fact this is one of the reasons why social media is so critical to the procurement profession, as it broadens the lens through which we can view a particular subject.

Accountability and Outcome is a Shared Responsibility in the RFP Process

It never fails to amaze me thatgiven the amount of researchwhich goes into the production of each PI Window on Business Show, thereare always a number of new insights that come to light during the live broadcast. In fact this is one of the reasons why social media is so critical to the procurement profession, as it broadens the lens through which we can view a particular subject. In short, if we as professionals confine ourselves to a single venue of collaboration, thereby limiting what I refer to as the cross-pollinization process, we ultimately and quite unintentionally risk the ongoing veracity of the insights we wish to gain and share.

One such example of these important on-air insights came during my interview with SRS founder and visionary Andy Akrouche.

During the segment, which was centered on how the RFP process is being re-defined by the emergence of intuitive technology platforms such as SRS' newly launched RFPBlaster solution, I made the observation that while important, technology in and of itself is not the answer to the problems posed by eroding supply bases and decreasing supplier response to RFPs.

As Andy succinctly put it, the relationship between buyer and supplier is onethat has to be based ontrust, otherwise suppliers will not even come to the table. A fact that was driven home by a senior VP from Colgate-Palmolive who had attended one of my seminars a few years ago. Referencing Colgate's efforts to institute an Ariba reverse auction application, the VP stated that after a considerable expenditure of resources, when the time came to run the first event they did notreceive a single bid.

The problem as is the case with most RFPs is the prevailing believe that the system by its very nature is tilted to a certain degree toward a known and proven vendor thus reducing the exercise to one of price verification rather than competitive supplier selection. Against this backdrop, phrases such as transparency and a fair and open bid process fall largely on deaf ears. Hence the reason for my position that technology is not the driving force or initiator of the RFP process, but is instead a facilitator that streamlines, manages and monitors bidding activity. This means that the precursor to success is the level of trust that Akrouche had referred to during our interview.

Trust however is a two-way street, and technology such as RFPBlaster serves as the proverbial olive branch between a buying organization and its suppliers. How does the RFPBlaster fulfill the role of peacemaker with what for many organizations is a highly cynical supply base. To fully answer this question, one must first understand the reasons behind the growing chasm that has and continues to occur between transactional partners.

To begin, and as referenced many times in this blog, studies and reports indicate that buyers tend to limit their focus on known supplier relationships simply because of time constraints and limited resources. For many purchasing professionals whose mandate can quickly vacillate between the need to fill an immediate service demand and the necessity of obtaining the best value (re price), simplifying through compression of options is the only viable option.

This of course creates a limited range of engagement as only those suppliers with whom the buyer feels most comfortable are likely to be seriously considered. A practice by the way that is further fuelled by misaligned vendor raltionalization strategies that create artificial pricing metrics that further removes the buying organization from market realities. No wonder a Best Buy can pay up to a 23% premium, or the Department of National Defence in Canada pay a 157% delta above market pricefor Indirect IT service parts.

Collectively, the above scenariocreates the perfect conditions for undetected margin creep, andgradually declining service levels. Italsocreates unfavourable conditions for the successful introduction of an RFP application, explaining why the Colgate-Palmolive Ariba "initiative" failed.This scenarioalso sheds light, at least in part, on why 85% of all public and private sector e-Procurement initiatives fail to achieve the expected results. In short, what we are talking about is not a technological problem alone, but an expertise or practical experience issue that is a reflection of the minimal degree of involvement purchasing professionals have actually had in their organization's efforts to automate the supply chain practice.

Where a solution such as the RFPBlaster changes the game, in essence filling the knowledge vacuum that has come about as a result of initiatives being viewed as primarily an IT or Finance department undertaking, is found in its practical purchasing expertise origins.

As Akrouche emphasized during our interview, he and the SRS team incorporated their vast purchasing and supplier relationsexpertiseinto thedevelopment process at the beginning. They then structured the RFPBlaster's functionality around these realities of experience, providing a practical "relational" engagement vehicle in which the real challenges of buyers and suppliers are addressed.

Unlike an Oracle or an SAP, which if you think about it are software companies first, and therefore view a problem through a technological lens, SRS developed its RFPBlaster through practical understanding using technology as the delivery platform. There is a world of difference.

Related Articles
  A culture of accountability is the key to business and organisational success
  Leadership Tips to Create Greater Accountability in Your Organization
  Is Accountability Reluctance Hurting Your Solo Business?
  Accountability Partnerships Series Conclusion
  Procrastination - How to End the Cycle
  Employee Relationships - What is Responsibility
  Responsibility vs Accountability
  Values
  How to Build Accountability in Your People
  Increase Sales in Today’s Global Marketplace Demands Personal Accountability
  Empowering Asian Mindsets through Coaching
  What is an Entrepreneur?
  Can a garden produce top fruit if it is never weeded?
  Steering the Organizational Change Process
  WHERE IS THE YOU (“U”) IN ACCOUNTABILITY IN TODAY’S WORLD?
  Build Business with Accountability
  Accountability Partners Versus Groups
  Next Steps to Success
  The relentless search for "tell me what to do"
  What Leaders, Facilitators and Coaches Have In Common

Article Tags: auction application, colgate palmolive, emergence, important technology, intuitive technology, live broadcast, new insights, observation, pi, price verification, procurement, profession, reverse auction, rfp process, segment, supplier selection, technology platforms, venue, veracity, vp



Related Forum Posts
Re: The Way We Were - Great post Mal. Shared it on FB. Although I am not old enough to be in that generation, I still have respect for the way it used to be. Life is too easy these days!
Re: Why Did You Become An Entrepreneur? - You mean Freedom = Responsibility. Freedom and responsibility are two sides of same coin. But I like the word choice. Robert
Re: Congratulations Topeyinka - Congrats Topeyinka! As Spiderman said "With Great Power Comes Great Responsibility"... Just kidding.. Have Fun!
Re: Quote of the Day - "We are each responsible for our own life - In one of my articles related to "Is It a Scam or is it YOU" most cry Scam when in fact they have done nothing the with the program, havent followed the bluprint or the training, improperly marketed it. etc. "One mans scam may be another mans bonanza" is a quote used. Summing up the article, Do your Own Due Diligence, Make your own decision, and finally "Take Responsibility for your Decision regardless of the outcome Good or Bad"
Franchise of a popular call center - Hi All, I was planning to setup a franchise of a popular call center services company . They are giving several services to their customers like - knowledge management , workforce management , Business Process Automation etc. Now I need to know that from where and how I should start and who must be my targeting customers.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Smart & Simple Internet Techniques

Multilevel Marketing: 4 Tips To MLM Success

Do You Pretend To Listen To People?

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.