Better Ways to Find the Right Suppliers

Responding to a tender on behalf of one of my supplier clients (not an insubstantial company), I was struck by the gulf between insurer expectations and supplier reality. A veritable tsunami of questions flooded the inboxes of the supplier bid team across a vast array of subject matter, but all of the questions had a single thread of connection between them.

Namely, that the questions were written by a very large company (an insurer), seeking to procure services from a relatively small company. Because of this, it soon became clear that the former had little cultural understanding of the latter, and were ruining their chances of finding the right supplier to suit their needs.

A Triumph of Style Over Substance 

Procurement and claims professionals will have spent months preparing the Request for Proposal/Information, but will demand comprehensive answers within a few short weeks. The timetable from the viewpoint of the vendor is incredibly short – and is not so much a test of knowledge, skill and corporate attributes, but rather the ability to drive a square peg into a round hole.

With no time to revisit, revise or re-engineer, the vendor is left with no choice but to manoeuvre and manipulate information that they hope will satisfy the buyer. In other words, the RFP and the process surrounding it is no longer an instrument for the intelligent buying of goods and services by the insurer, but is instead an obstacle on the road to success for the vendor. A hurdle to be navigated, crawled under, leapt over.

The RFP is not a facilitator of making the right purchasing decisions but, instead, has become a mere shop window of presentation and style.

It’s Easy When You Know How 

As someone who spends a great deal of time both drafting RFPs and, conversely, working with vendors who want to win business from insurers, I know that this is not the core intention. Purchasers genuinely want to hear about the competencies and attractions of the vendors. The latter are anxious to be able to respond positively and with integrity. Unfortunately, it doesn’t always work that way, and the blame lies firmly with the insurer procurement and claims teams.

But there are some solutions 

Firstly, the RFP content should focus almost as much on the future as the present. Vendors do not stand still. Understanding their growth and development plans tells you more about a business than any number of queries regarding present day practices. 

Secondly – add 8 weeks to the proposed date for responses. If you were thinking of giving 4 weeks to reply, then give 12. If you were thinking of 8 weeks, then give 16 or earlier if the vendor wishes to submit. Suppliers need time to consider, reflect, and maybe even change how they are working as the demands of the RFP become clear. It’s better to have an honest and considered response than a response built on smoke and mirrors. 

Finally, the RFP content and scoring should be weighted towards non-commercial considerations in the first instance a ‘blind’ tasting of the proposal. Of course, the price matters – but not until much later in the consideration. Determine what the vendor is proposing to deliver before you make a judgement on price. Better to understand the former without your eyesight being ruined by the latter. 

Requests for Proposals have a massive potential value to create meaningful relationships between buyer and seller. At the moment however, that potential is being wasted because of flawed process, cultural incompatibility, and too many boxes to tick! 


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