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Why it’s time for business leaders to rethink their RFP strategies

business
(Image credit: Image Credit: NakoPhotography / Shutterstock)

The result of the unprecedented challenges that the pandemic has presented has meant that the post-Covid recovery will look different for all businesses. Whether it’s going to be a quick, or long and gradual recovery, one thing is for sure: there are more business opportunities now than ever. With teams still working from home globally, decision-makers and industry leaders have never been more contactable and with more time to think about their overall business strategy.

As part of this recovery, many companies will take the position of not turning down any business that comes their way, and will therefore answer every RFP or questionnaire that comes in – even if it’s not a good fit. Companies in this position are naturally going to be spending more time answering RFPs and more resources trying to craft a win theme to wrap around the response.

Subsequently, this is going to create a much bigger demand on subject matter experts (SMEs) and, where previously answering RFPs was seen as subsidiary to their main role, organizations are now going to have to get serious about the demands, processes, workflows and technology around answering RFPs.

There are many industry sectors – whether it’s pharma, defense or public sector – where almost all business goes through a bidding process. Even in industries that traditionally didn’t have such rigor in their procurement processes, the march towards professional procurement and the ease with which modern procurement systems can manage bidding processes means that RFPs – and their siblings RFIs, DDQ’s and security questionnaires – are on the rise.

With this in mind, now is the time for business leaders to rethink their strategies for winning new business as part of their post-Covid recoveries and beyond.

RFPs are a huge time demand on SMEs

An hour’s worth of time from a legal, finance or cloud security team member can be huge. For those using an external partner for some specialist knowledge services, an hour’s time could be extortionate. It’s worth considering these costs when it comes to answering RFPs, as well as the costs related to the work that the legal team isn’t able to do while they’re having to work on the responses.

For many, it's the repetition in the RFP questions that really costs time and money. Leaders know that SMEs are an expensive resource but continue to fire the same legal compliance and security RFP questions out to them. Often, it’s the same questions they answered last week and variations on the ones from the week before that. If companies are going to handle even more RFPs going forwards, then this is a huge misplacement of valuable resources.

It is also worth considering the opportunity cost for sales teams when they are not working on developing and closing winnable deals. Many sales leaders do not have a handle on how much ‘sunk’ time there is in managing and answering RFPs, but when the true costs are measured, this can be a massive eye-opener.

Many companies segregate RFPs into those that are managed by a dedicated proposal team and those where the salesperson has to own the RFP process, perhaps with some support from the proposal team. In those cases, salespeople can end up spending a huge amount of time initially dividing up the questions, project managing the responses from different SMEs, assembling those responses and finally writing the proposal wrapper and win themes.

It’s important for companies to rethink their approach to handling the costs and opportunity costs of answering RFPs. This may involve automating the responses as much as possible to free up salespeople and SMEs to do their day jobs.

Most companies aren’t consistent in how they answer RFP questions 

As businesses commit to more and more bidding processes, it’s worth considering how inconsistencies can emerge on the responses due to staff changes. For example, when fully qualified employees who have been working at the company for longer are out of the office, not all businesses will have approved responses for less qualified, less experienced employees to make use of. It’s no wonder that there are irregularities in how each RFP is answered.  

Those who are lucky enough to avoid being contractually bound to their RFP responses if they win the deal might consider the risk acceptable. 

However, the more RFPs a company answers, the more risk they are taking on. For this reason, it is necessary to have a consistent RFP knowledge base for, in this case, legal compliance answers. This is where AI can be game-changing in answering RFPs. Organizations that are answering increasing numbers of RFPs should consider automating the responses to the same or similar questions so that they are always consistent and compliant.

Many companies have to finish answering most of an RFP to finally work out that it wasn’t a good fit

Even for those companies opting for the ‘we are not in the business of turning down business’ approach, it’s still likely that they will put more effort into answering the RFPs that have more chance of success.

The more RFPs a company answers, the more useful it is to have a tool that helps the team to qualify the RFP as quickly as possible with minimal effort. In other words, how does your business manage your Bid/No Bid qualification process? Considering the time it can take for teams to answer RFPs, as well as the opportunity cost, the tool needs to have a ‘propensity to win’ measure so that businesses know which RFPs deserve more effort in crafting their introduction and win themes.

Very few companies’ client-facing staff have access to one of the most valuable assets: the RFP answer catalog 

As team members get nearer to closing a deal and are discussing the finer details on a call with a prospective client, they may find themselves in the situation where the client asks one final, technical question about something that requires input from an SME. If the employee doesn’t know the answer themselves, they may resort to instant messaging the SME.

Imagine instead having an AI-driven conversational assistant that can do the work for you in the company’s RFP answer catalog in real-time. Employees don’t need access to SMEs and they can be confident in the knowledge that each answer will be consistent.

Organizations that are serious about RFPs should consider the access that client-facing staff has to the expert body of knowledge they need to answer RFPs.

RFPs and questionnaire answering can now be automated using AI 

The Fourth Industrial Revolution, more commonly known as Industry 4.0, builds on the rise of information technology and automation to include new technologies, such as AI, quantum computing, 5G, blockchain, robotics, IoT and genetic engineering.

Many businesses are incorporating these technologies in their digital transformation plans. It’s important for companies that are so reliant on bidding processes to consider how they might future-proof these processes, rather than relying on using technology built in the early 2000s or even answering RFPs manually.

AI has evolved to the point by which it can now teach a computer what the best answer is to an RFP question, even if the question doesn’t use exactly the same phraseology.

Companies who want to keep up with their competitors can no longer afford to answer their RFPs and questionnaires manually. Businesses that don’t utilize AI technology to scale their expert response to the tsunami of RFPs, risk overwhelming themselves. Running the risk of being left behind could not only damage a business’s competitive edge, but it could also be costly.

It’s no doubt that the Covid-19 pandemic has taken its toll on companies around the world, particularly when it comes to retaining business. For many, doubling efforts on answering RFPs will be key to putting businesses back on track.

By rethinking how time is spent and misspent on responding to RFPs, and how the process could be made more efficient and accurate with automation, business leaders could find themselves in a much more favorable position when it comes to winning new business, which will, ultimately, help them drive growth short and long term.

Tobias Dawes, CEO and Founder, Avnio

Tobias Dawes, CEO and Founder of Avnio.