Whether you’re going out to bid for employee relocation services for the first time, consolidating suppliers, replacing existing ones or just benchmarking there are lots of different ways we’ve seen buyers handle the relocation service tendering process.
Here are 5 things we’ve learnt from the supplier side that could give you some ideas to help make your next supplier Request for Proposal (RFP) process run more smoothly and help you build more successful long-term partnerships with your vendors.
1) The more information you give, the better answers you get
Sharing good information in your RFP invitation helps bidders get to know you, achieving two things. Firstly, those that can clearly see they aren’t a good fit for your company can decide to withdraw before wasting your time evaluating them. Secondly, those who do believe they have great solutions for you can make more accurate suggestions about how exactly they can help.
In the past 10 years of Bournes bids we’ve written over 2.5 million words about our company and the relocation solutions we provide. Not all of them will be relevant to you and your individual needs, and your time is too valuable to be sifting through to identify what is of value and what isn’t. The more we understand about you the more we can tailor the information we present so you can clearly see the value in our solutions or identify where we might not be a good fit. For example, organisations like Bournes that don’t offer one size fits all solutions may operate lots of different models for account management based on what works best for our clients. If we understand how you work and what is important to you, we can just tell you about the model we’d recommend and the value it could deliver, rather than making you read through lots of alternatives or presenting one that really wouldn’t work for you.
The same principle applies for pricing as well as the technical elements of a bid. The more information you give the more accurate pricing should be. This is important because it’s a common mistake to give generic scenarios for pricing that leave buyers vulnerable to fluctuating costs when the reality of an individual relocation is made clear. For example, if you have some destinations that are more popular than others, sharing historic number of relocations could allow bidders to price those lanes to include volume discounts. With one bid we participated in we noted the typical volumes of household goods sent within the 20ft container allowance meant that cost per container should be lower based on less packing/loading as they were typically only 75% full.
Loose pricing scenarios are fine if you’re just looking at indicative costs and the pricing section isn’t heavily weighted in the scoring, but if cost is a major selection criterion (as it normally is) then you want your scoring to be based on as realistic pricing as possible.
Consider sharing your objectives and how your scoring model is weighted as well as your operating model; historical information like allowances used; traffic lanes and demographics. You could also consider sharing any projections if you have them or think something will change. Share your policy and allowances if you can (you can get suppliers to sign a non-disclosure agreement if you’re concerned about confidentiality). If you don’t already have a policy work with potential suppliers or other industry professionals ahead of writing your RFP to evaluate what your policy should include.
2) Asking better questions gets better answers too!
Try to make it really clear what you’re trying to understand from each question to ensure its worded in a way that isn’t open to interpretation. This allows respondents to cut to the chase and give you the information you’re looking for without waffling or worse, missing the point completely. (Trust us, when you have multiple bids to evaluate you’ll welcome a lower word count!!). For example, the question “Describe your global network” could be interpreted in several ways – do you want to know what countries we cover? How branches in different countries communicate? How we manage quality globally for consistency? How we appoint and manage global supply chain? Or something else?
Before writing your questions decide what’s important to each party involved in the decision-making process (for example, Global Mobility, Procurement and HR) and how important each area is to link this to your scoring model. Ask questions that draw out answers that address these areas well and allow you to evaluate and score comprehensively.
3) Open communication with potential suppliers can be valuable
Involving your suppliers (existing or prospective) in your RFP design can really help to make sure you’re structuring it in a way that will get good information that is easily comparable. Most will happily and freely share their experience and insight. For example, in designing a pricing request why not ask potential suppliers to see if it will work? Does the model leave you exposed to future hidden costs or pricing that’s impossible to provide or compare when you get to evaluation?
It can also be valuable to allow discussions with suppliers during the RFP process. Open communication is not always a feature of RFP processes because of the feeling that you need to share the same information with everyone and publicise the answers, but taking a meeting with suppliers that gives them the opportunity to ask everything they need to know before bidding is a really good way to make sure bids are realistic and comprehensive enough for you to be able to make a good selection and achieve a successful partnership going forward. These meetings are also a great way to understand how the suppliers work and how you can expect them to work with you during the contract. It’s easy to write that we have a consultative relationship management philosophy but experiencing it in action will give you great insight into if we’re the kind of company you want on your team long term.
If you can find a way to allow open dialogue in a transparent and ethical manner without disclosing commercially sensitive questions to other bidders it could be really valuable.
4) You can filter for non-negotiables with a screening round
Lots of companies address non-negotiables using a pre-qualification questionnaire (PQQ) or request for information (RFI) before the main RFP to decide who to invite, but lots still don’t. Using an RFI as a screening stage can make sure that you only take through to the final (and more time consuming) stages those companies that you would actually be able to work with. For example, if your company’s Supply Chain Management policy states that you can only work with ISO 9001:2015 certified suppliers, if you need service in specific locations or 24-hour customer services the use this first stage to ensure all bidders can offer those non-negotiables before you spend too much time evaluating their pricing and service model.
5) You don’t ALWAYS have to go out to Tender
RFP’s can be time consuming to design and then to run and evaluate. If you’re only managing a dozen or so moves per year a full RFP process might not be necessary. Depending on what services you are buying, typically in small programmes the implementation process can be fairly simple. This means trialling the services and understanding the costs of a supplier (or a few) is feasible without switching later being a huge challenge. This allows you to ‘test run’ working with providers before committing to a contract, giving you real life insight into how they work, the value you get and the price you pay.
There is also a school of thought that in some areas of business-to-business services tenders aren’t the best approach. Tenders are great for gathering all the information out there for standardised products/services, but the downsides of the process can create some loop holes as discussed above that could risk failure to select the best supplier for you.
Want to know more? Get more tips by downloading our guide to creating a successful Global Move Management tender or book a free, no obligation consultation to discuss the best approach for you.