ASK the expert
Stuart Tandy, Head of Bid Management at Agiito
The return of RFPS
Are RFPs now coming back?
RFPs didn’t completely stop for us during the pandemic but there was a significant slowdown. For those that did initially continue, decisions tended to get postponed as organisations utilised the Government's furlough scheme, prioritised activity and redeployed staffing resource where required and, in some cases, made the difficult decision to make redundancies and restructure their business. But in recent weeks we have seen a notable increase in organisations issuing RFPs. Some organisations that perhaps have more defined procurement policies governing contract timeframes are issuing formal RFPs while others are clearly conducting a more informal market review, maybe unsure as to whether now is a good time to change suppliers but wanting to see what’s out there.
Is now a good time to do an RFP?
Yes, there are a number of reasons. Firstly, the pandemic has had a significant impact on the industry with widespread restructuring and redundancies. Service levels may have taken a hit as organisations ramp up their business travel return. So ‘noise’ around service levels could be deemed a reason to go to market, but it should be noted that this is likely an industry-wide issue and shouldn’t necessarily be used in isolation as a reason to do an RFP. That said, many organisations will have come out of the pandemic looking very different. Some will perhaps have more remote workers or a more open attitude to home-working, or maybe a greater focus on employee wellbeing has seen a policy change on when people can or should travel on business and when to connect virtually. All of this may mean that their travel spend profile has significantly changed and would suggest it might be a good time for them to go to market. 12
What are the key differences you are seeing post-pandemic?
In the past employee wellbeing and sustainability were covered to some extent in RFP questioning but post pandemic there seems to be a greater focus, and hence a greater weighting within the decisionmaking process, on these two areas. The workforce demographic has changed with Millennials and Gen Z now making up a significant proportion of most organisations’ employees. Both groups care deeply about protecting the environment so it’s no great surprise that sustainability is high on the corporate procurement agenda. Organisations recognise their people want to see them take proactive action on environmental commitments, contribute to
RFPs require a lot of time and effort and some organisations will have limited resource to manage more than a handful of major procurement RFPs per year” addressing climate change and drive social value from their supply chain. Traveller safety and security has always been a key consideration but organisations are now recognising that general employee welfare is hugely important as well. They recognise that their duty of care extends beyond their safety to protecting them from the medium to long term impacts of excessive business travel. For example ‘road warriors’ can suffer burnout, so some organisations are looking for reporting to go way beyond standard transactional and spend data and include wellbeing reporting, identifying those ‘at risk’ travellers so they can advise line managers to be able to intervene.
As well as addressing duty of care, this approach makes business sense as the longer-term impacts of excessive travel has a knock-on effect on absenteeism as well as recruitment and training costs.
Are you seeing a change in commercial models?
I think there is definitely a recognition from most buyers that a hybrid model is perhaps more appropriate with booking fees for any transactional elements and a management fee payable for account management projects and activity, rather than rolling up any account management costs into a transaction fee model. During the pandemic lockdown we were still working with many customers providing advice and helping develop policy but many of those customers were not actually travelling so the typical transaction fee model was not sustainable.
What are the main RFP pain points?
RFPs require a lot of time and effort and some organisations will have limited resource to manage more than a handful of major procurement RFPs per year. So, when it comes to dealing with the time pressures of RFPs, the best place to start is finding tools that best fit your sourcing events. Search for tools that streamline the sourcing process instead of adding unnecessary steps or questions and don’t think the choice is between the leading-edge sourcing app or a Word doc, there are plenty of other options in between. Another potential pain point for buyers is that RFP submissions might be inconsistent. Ultimately, you can’t fully control how suppliers will respond to your RFP and no matter how well you’ve designed and drafted your RFP, it’s inevitable that bidders will want to answer it their own way. Some of the sourcing apps and tender portals will help address this inconsistency
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Ask the Expert - Agiito V5.indd 12
8/25/22 03:46 PM