JGL is in the business of managing RFP processes for food service and retail operations. As a firm, we manage 25 – 30 processes annually. At any given time, we are actively in conversation with at least a few potential clients who are considering managing their own RFP process. We also manage at least one RFP a year following a failed internally managed RFP. We generally try to dissuade prospective clients from self-managing, not because we want the business (which we do), but because we want to see them succeed.
Clients frequently underestimate the work involved with an RFP and think existing employees with full-time jobs can absorb this extra load. We recently had a prospective client suggest that employees could do the required extra work on the occasional weekend; we can guarantee that the client has no idea of the work involved. The truth is, RFPs take a lot of time, and if you are going to invest valuable employee and management time in the process, it may be penny-wise and pound-foolish to go it alone.
Debating between a self-managed process versus a consultant-managed process? Consider the following points before deciding.
- Expertise: Consultants bring a wealth of experience, having managed numerous RFP processes every year. They know what information to include in the RFP, who should be involved in the process, the optimal timeline, and the pitfalls to avoid. The most common reason for a failed RFP is inadequate or lack of vendor responses. The primary reason for that is a lack of understanding regarding the data vendors need to propose and a fair timeline.
- Time and Resource Management – Drafting the RFP, communicating with prospective bidders, developing a selection committee, evaluating the proposals, and organizing short-list candidate interviews is incredibly time-consuming. Unless you have staff with experience crafting an RFP and lots of idle time on their hands, you may find using a consultant more efficient. Shortcuts will be made if staff do not have adequate time, and the ultimate (long-term) contract may not be the best fit for the client.
- Customization and Innovation: Anyone can find an RFP template online and tweak it to fit their operation. Only an experienced consultant, however, can develop innovative solutions that address committee or client concerns. Prior vendor failed to control costs? Put KPI’s with penalties in the contract. Lack of internal consensus regarding exclusivity? Accept proposals for exclusive and non-exclusive. An experienced consultant listens to the client and committee, then customizes solutions to achieve client goals.
- Financial Acumen: Food service and retail proposals can be complex. They include a variety of fees and capital expenditures, and frequently, there are embedded terms that an inexperienced staffer may not recognize. We had a client who unwittingly signed a contract specifying capital expenditures would amortize over a longer term than the contract period, leaving the client owing funds at contract expiration.
- Costs vs Savings: Sometimes, prospective clients will decide to self-manage because they don’t have funds budgeted for a consultant. While that is a valid point, one must also consider that an inexperienced RFP team will not know whether to ask for a reduction in management fee, increase in capital expenditure, or other financial concessions. In our experience, consultants will more than pay for themselves by the savings identified or additional financial incentives garnered.
The RFP process for a food service operator or retail operator typically results in a relationship that lasts five years or more. Investing the time and funds to utilize a consultant is the most likely avenue to developing a strong relationship and maximizing financial return.