Technical Support for Organization - Essay Example

? RFP’s are sick, not dead Table of Contents Table of Contents 2 Introduction 3 Request for Proposal (RFP) 3 Request for Information (RFI) 4 Potential Problems and Issues of RFP 5 Industry Example- Procter & Gamble 7 Conclusion 8 References 9 Introduction Organizations try to get external help in terms of technological support or raw material replenishment from vendors, third party contractor and suppliers in order to survive in today’s hypercompetitive business scenario. Companies use request for proposal (RFP) to acquire required from suppliers. Next part of the study will try to brief various aspects of RFP. Request for Proposal (RFP) Research scholars believe RFP is the basic way for buyers to gather information regarding suppliers. In simple word RFP is a document used by buyer to solicit proposal from various potential suppliers. Proposal is prepared by suppliers by answering specific queries of buyer in the form of document. For example if a company wants to purchase computer system then they will write and issue Request for Proposal to suppliers. After the RFP is issued by the company then suppliers start responding to it. In the second step company receives and analyzes potential proposals from suppliers and after analyzing proposal they select most specific supplier. Industry report says that suppliers proposing low cost but quality solution to buyer have high probability to crack the deal in comparison to others (Schwalbe, 2010, p. 475). There is no fixed way for companies to select proposals from suppliers and entirely depends on business requirement of buyer. Research scholars suggested that companies should use expectancy value model to select right proposal. In expectancy value model buyers emphasizes on attributes of proposals. According to this model, buyers assign value point on various attributes of a proposal and then summarize total points assigned on potential proposals. They select the proposal has larger sum of value points (FitzGerald, and Arnott, 2000, p.107). Request for Information (RFI) Request for information has emerged as recent development in the field business to business transactions. RFI refers basic information provided by vendors to buyers. RFI provides a brief overview of potential solution offered by suppliers to the buyer. Generally RFI and RFP include following points. Introduction Background of buyer Information regarding the project Purpose and Scope of RFI Specific Request Qualification of Vendor (Stein, 2006, p. 430) Due date of submitting proposal Confidentiality norms (Whitney, 2011, P. 246) Detailed information of supplier (Langer, 2012, pp. 49-50). Theoretically any company can use RFP for particular project but in low cost project issuing RFP ultimately harts objective of the organization. RFP for project costing below $10,000 can be classified as costly in terms of both staffing and investment (Click, and Duening, 2004, p. 78). Specific situations where buyer needs to issue RFP can be summarized in the following manner. Project cost is more than $10,000. Numerous suppliers are available to provide solution Requirement is complex and needs technical supervision High customization is required for the requested system (Wisner, and Stanley, 2007, p. 324) Substantial cost is associated with maintenance of requested system Multiple agency involvement is required during purchase process (Institute for Law and Justice, 1999). Cost of preparing RFP document is negligible in comparison to overall cost of the process. Problem areas for RFP process can be explained in the following manner. Potential Problems and Issues of RFP Reason Potential Effect Potential Threat No mention of Coordinator in RFP Creates confusion among suppliers and agencies Suppliers may protest against the company and solicitation might get cancelled No clear mention of needs or requirement by the buyer in RFP Suppliers do not respond sufficiently to RFP Buyers might need to reissue RFP with clarified requirement statement Ambiguous proposal requirement Confused vendors send incomplete proposals to buyer Solicitation might get cancelled or buyers might acquire wrong product from suppliers Unorganized documents in RFP Suppliers fail to find requirement of buyer and send late proposals Reputation of buyer affected and they lose responses from strong suppliers Last date for proposal submission is not clearly mentioned or mentioned timeline is too short to respond Potential proposers or suppliers fail to respond in time Complains and protests from vendors and choice for buyer to select potential proposal decreases Buyers do not follow proper guideline to select proposals and take long period for proposal solicitation Vendors gets irked by the time consuming proposal selection process Agencies might take legal action against the buyer plasticising illegal and biased procedure to select vendors Incomplete statement of evaluation pattern and criteria Uncertainty rises among suppliers and proposal from potential suppliers might get cancelled in this biased evaluation pattern Suppliers might take legal action against the company and force them to reissue RFP No discussion about OMWBE issue (minority or women owned business enterprise) in RFP Illegal and wrong application of OMWBE credit Suppliers protest the solicitation process and in extreme cancellation of RFP Proposal solicitation is not advertised in proper manner Suppliers might face non competitive solicitation Legal action might be taken by suppliers against solicitation process Buyer doesn’t perform pre-bid conferences Confusion about the solicitation process arises among vendors Cancellation of the RFP and solicitation process (Source: Author’s Creation) Kenneth Lysons has suggested that RFP should give opportunity to vendors to present their solution in innovative manner to fulfil requirement of buyer. Organization generally issue RFP for high net worth projects and give advertisement about RFP in print media. Large companies restrict RFP between three to five suppliers in order decrease solicitation time. Reverse auction is practised buyers to force suppliers to quote in lowest possible price. Reverse auction has increased competition among suppliers to provide quality solution to buyers (Lysons, and Farrington, 2010, p. 494). Companies are integrating e- procurement system with RFP process to increase efficiency of the process (Neef, 2001, pp. 70-71). The XML based procurement decreases the cost of the process and also diminishes total process time. Big players of the industry are using computer aided design (CAD) and product data manager (PDM) to arrange acquired product through RFP process (Groover, 2008, P. 17). Integrating RFP process with e-procurement systems can help buyer in the following manner. Overall cost reduction Process cycle time reduction Inventory holding cost reduction Supplier relationship management Efficient RFP contract (Baily, Farmer, Crocker, Jessop, and Jones, 2009, pp. 410-415) Industry Example- Procter & Gamble The final part of the study will analyze RFP issued by Proctor & Gamble. The company is planning to increase production efficiency by short listing production companies as vendor partner. In the first phase the company has cut down vendor partners from 125 to 30 in order to decreased solicitation process time. The company selected only those production companies who agreed with terms and condition of P&G. The company has asked their agency partner to prepare a list of one seventy production companies in the preliminary stage. The company finally issued RFP to production companies and July 2nd, 2009 has been selected as last day to submit proposal. RFP document of P&G included following issues. Detailed financial statement Income statement (Loulakis, 2003, P. 373) Production capacity P&G shared proposal information with their agency partner. The company also asked producers to give assurance for next two year’s production level. The company also developed stringent norms and condition for producers to submit proposal. The whole process helped the company to collect potential proposals and selecting right one. Conclusion Five key things are important for an organization to create unbiased RFP/RFQ process and sometimes these organizations are known as learning organization (Stainback, 2000, P. 82). There are few guidelines for an organization to create an unbiased RFP issue and evaluation pattern. These guidelines are - 1- evaluating proposals with ethical but systemic manner, 2- encouraging new thoughts or process to change the evaluation process, 3- try to learn from past mistakes committed by them on issuing RFP, 4- try to maintain equilibrium between good business practise by other business organization and self evaluation, 5- maintaining a transparent communication dynamics with suppliers (Garvin, 1993, p. 81). References Baily, P., Farmer, D., Crocker, B., Jessop, D. and Jones, D., 2009. Procurement, Principles & Management. New Jersey: Pearson Education. Click, R. L. and Duening, T. N., 2004. Business Process Outsourcing: The Competitive Advantage. Hoboken, New Jersey: John Wiley & Sons. FitzGerald, M. and Arnott, D., 2000. Marketing Communications Classics. Stamford: Cengage Learning EMEA. Garvin, D. A., 1993. Building a Learning Organization. Harvard: Harvard Business Review. Groover, M. P., 2008. CAD/CAM: Computer-Aided Design and Manufacturing. New Jersey: Pearson Education. Institute for Law and Justice., 1999. A Guide for Improving RFP and Procurement Practises In Justice Technology Acquisitions. [pdf] Available at: [Accessed 15 October 2012]. Langer, A. M., 2012. Guide to Software Development: Designing and Managing the Life Cycle. Berlin: Springer. Loulakis, M.C., 2003. Design-Build for the Public Sector. Alphen aan den Rijn: Wolters Kluwer. Lysons, K. and Farrington, B., 2010. Purchasing and Supply Chain Management. 7th ed. New Jersey: Pearson Education. Neef, D., 2001. E-Procurement: From Strategy to Implementation. Upper Saddle River, New Jersey: FT Press. Schwalbe, K., 2010. Information Technology Project Management. Stamford, Connecticut: Cengage Learning. Stainback, J., 2000. Public/Private Finance and Development: Methodology/Deal Structuring/Developer Solicitation. Houston: SPPRE. Stein, R. T., 2006. The Computer System Risk Management and Validation Life Cycle. Chico, CA: Paton Professional. Whitney, M., 2011. Are You Ready to Sell?: B2b Industrial Buyers Operate in a World of Fast Changing Needs. You Must Change Even Faster to Win Orders. Here's How! Bloomington: AuthorHouse. Wisner, J. D. and Stanley, L. L., 2007. Process Management: Creating Value Along the Supply Chain. Stamford, Connecticut: Cengage Learning. Read More