For procurement and proposal professionals, the past year was full of changes. Due to global events, the way we connect and conduct business evolved. Likewise, RFP trends, processes and best practices adapted and evolved too. As we reflect on the past year and plan for the future, it’s important to explore these RFP trends as well as the impact they may have on your business.
In this blog we’ll explore the three most notable trends we’ve seen emerge in RFPs this year. In addition, we’ll share suggestions for how your business can adapt and prepare for each.
The past year has been unique in a lot of ways. Working in sales at RFP360 puts me in the position to both complete a lot of RFP responses. Also, I get to talk with procurement and proposal professionals about their process and challenges. While no two discussions are the same, when it comes to RFP trends there have been some noticeable themes.
In talking with others who issue or respond to RFPs on a daily basis, overall, it was a challenging year. Indeed, the flow of RFPs slowed for some industries while others saw a flood of incoming requests. For our purposes, this post focuses specifically on RFP trends initiated by procurement teams. And, how bid and proposal teams can subsequently prepare for or take advantage of them. Certainly, the influence of current events accounts for many of these RFP trends. However, others have been emerging for years.
Even if your company wasn’t significantly impacted by these RFP trends this year, I believe these three are here to stay. Awareness of them empowers you to craft more powerful and effective messaging. Then, use that messaging to update your knowledge library. Finally, knowledge about these trends will help you create new proposal content that resonates with buyers in the year to come.
1. Social responsibility
While it’s not uncommon to encounter social responsibility questions in an RFP, this year, procurement teams showed a renewed focus in this area. Diversity and sustainability questions were once viewed by buyers as a compliance issue or simply ‘nice to have.’ But now, organizations view vendor diversity and sustainability as absolutely crucial to success.
Supplier diversity questions in RFPs
Diversity initiatives are no longer simple internal policies. As awareness and activism increases, companies are taking a proactive and public approach to the issue. For example, you can view Johnson & Johnson’s supplier diversity policies, frequently asked questions and register to participate on their website.
Not only is diversity a matter of ethics and public image, but it also delivers financial benefits. In fact, a research study conducted by Boston Consulting Group found a direct connection between diversity and innovation. They found that businesses with diverse teams produced 19 percent more revenue.
With benefits like that, it’s no surprise that among Fortune 500 companies, more than 95 percent have implemented a supplier diversity program. Additionally, the Institute for Supply Management (ISM), offers a certification program designed to improve supplier diversity.
Sustainability in RFPs
Sustainability is another social responsibility issue that has been gaining prominence steadily over the last decade. In fact, the practice of sustainable procurement has grown so much that there are annual awards and publications dedicated to the topic.
As organizations and entire industries commit new initiatives, the result is an increase in sustainability questions in RFPs. Again, not only is sustainability important to corporate reputation, but it also delivers other benefits including reduced procurement costs and lower risk.
How to make the most of this RFP trend
Companies are looking for like-minded vendors to partner with. They want to work closely with suppliers that share their values and vision for the future, both in business and in social matters.
Spend time optimizing your messaging in these areas. If your company hasn’t addressed these issues formally, make business development leadership aware of the increasing prevalence of these issues in winning new business. Finally, if you have room to improve, create a concrete plan to share with your prospects.
2. Technology for managing RFPs
Digital initiatives continue to be a priority in most businesses. And, the need for technology in all areas of business was even more pronounced as remote work hit all time highs. Therefore, it’s no surprise that this year we saw a digital RFP trend.
Accordingly, technology adoption is a priority for chief procurement officers (CPOs). In fact, according to RFP statistics from Deloitte, 84 percent of CPOs say that digitization is key to improving procurement. Unfortunately, the same survey reported that only 32 percent of suppliers are digitally enabled.
An RFP management system transforms complex procurement, and the appeal for procurement managers is clear: easy RFP template creation, real-time RFP administration and automated scoring. However, digital systems also deliver benefits for vendors. Not only is responding streamlined, digital and centralized, but the software empowers better knowledge library management, more complete RFP data capture and improved collaboration.
How to make the most of this RFP trend
In short, if you haven’t yet become familiar with these RFP tools, don’t delay. The longer you wait to adopt technology of your own, the harder it will be to keep up with those who have. As RFP issuer Kelly Ellis of Piper Jordan says in The future of RFPs ebook,
“For us, if they’re not willing to respond in the tech we use, they’re disqualified … it’s not about them — it’s about the client and being able to evaluate vendors fairly. We expect them to respond in the tool if they want to win the business.”
Luckily, full-circle RFP software reliably delivers a positive return on investment (ROI) for those who adopt it. As more and more businesses develop an RFP strategy to achieve their business goals, proposal processes must consequently become more efficient and effective.
Finally, the last of the three major RFP trends I noticed is that organizations are seeking more meaningful partners. What exactly does that mean for proposal professionals? Most noticeably, the prevalence of RFPs that ask open-ended, insightful questions. Often, these sections of questions in the RFP intentionally allow vendors to highlight their knowledge of the business, provide creative solutions and demonstrate their ability to collaborate.
A white paper published by the University of Tennessee, Knoxville explores this idea. Coining the term request for partner, the paper explores the benefits of collaborative bidding for both buyers and sellers.
“The highly collaborative methodology allows the buyer and supplier to not only develop the “solution” during the bidding process, but also to establish a working knowledge of how well the organizations work together.”
Additionally, this trend is evidenced by the continued growth and popularity of the strategic sourcing role. The practice of strategic sourcing focuses on the total cost of procurement rather than product price. Consequently, you can take advantage of that focus as you write content that reinforces your desire to be a long-term partner.
Furthermore, after a somewhat volatile year for the supply chain, CPOs want to mitigate future risk. Consequently, they will engage with proven vendors that deliver consistent results. Beyond the RFP response and initial contract, this means that procurement teams issue regular vendor evaluations and security questionnaires.
How to make the most of this RFP trend
Navigating more complex RFPs while trying to understand what the buyer is looking for can be a challenge. Collaboration is key in this situation and it goes beyond hitting the right notes in your responses. Throughout the RFP process, communication is key.
Ask questions to fully understand the challenge and goals
Highlight your creativity and vision for the future
We all know that trends come and go. However, I think it’s safe to say that these RFP trends are here to stay for the foreseeable future. The world of bids and proposals is fast paced and often we don’t take enough time to debrief and review lessons learned. So, take advantage of each of these trends and ensure you don’t miss an opportunity to win new business.