The complexity of crafting an RFP response and why known workarounds and tools do not always work

If you do a simple Google search (not to mention a prompt to ChatGPT) you will find a long list of challenges for creating an RFP response. That’s simply because it is challenging to create a comprehensive and competitive proposal. There is no “warm intro”, you’re competing for your customer’s attention with other vendors who might have sent similar proposals, it is always (with almost no exception) time critical, you need people from different departments to chime in and don’t forget “make a customer, not a sale”.

When I shared this with colleagues leading business departments within IT companies I got “sure, but isn’t that the case with almost everything we do?”. So, we conducted interviews with experts from the field, people who are responsible for perfectly crafting RFPs in medium and enterprise companies, to understand the most impacting challenges, and we listened.

“Should I Respond to the RFP” dilemma

The RFP win rate is a key performance indicator for companies that regularly respond to RFPs. It represents the percentage of RFPs a company successfully secures compared to the total number they participate in. In essence, it’s a measure of how effective a company is at converting RFP opportunities into actual contracts or projects. Statistics show that around 45% of responded RFPs are won. This is 45% of all submitted responses, while many RFPs are left with no response and submission to a customer. The very first challenge and an important question mark comes at the very start — Are you a good fit for this customer? Can you win this deal?

While the answer may seem binary — yes or no — the path to it isn’t straightforward. How to determine what to do, when both options carry risks? If you are too eager to say yes, you may end up with a proposal you can’t really deliver. And if you say no, then you may lose a great opportunity

• Begin with the RFP. Understand its scope, objectives, requirements, and evaluation criteria. Assess your organization’s capability. Does it align with the client’s demands? Reflect on your past performance as a reference point, as your track record can significantly influence your credibility.
• But capability isn’t the sole criterion. Analyze your competition: can you outshine them and how?
• Time is crucial. Do submission deadlines match your delivery capacity? Is the project’s duration feasible?
• Lastly, weigh the ROI. Balance the proposal’s preparation cost against potential gains. ROI extends beyond immediate profits, consider the strategic and long-term benefits of winning the project.

Yes, all this to make a call on rather or not you should respond to an RFP. The main work, crafting the response has not even started.

The “blank page” challenge & the 1st draft

Starting an RFP response often confronts writers with the daunting “blank page” challenge, a starting point anxiety to perfectly initiate a complex, structured, yet persuasive document. Responding to an RFP is unlike most other forms of business communication. It’s not a routine email or report, it’s a specific document created to address a client’s needs, questions, and requirements comprehensively. This uniqueness can make the initial blank page intimidating. It can be both time-consuming and mentally draining, delaying the kickoff of a crucial business process.

You got to the 1st draft of your RFP response. You now have to share the first draft with relevant stakeholders for their input and feedback. Each stakeholder offers a unique perspective. Project managers can provide insights into project feasibility, timelines, and resource allocation. R&D can confirm if the new features address the requirements specified in the RFP. Legal and compliance experts can ensure that your proposal covers all legal and regulatory requirements.

This is where the repetition sets in. You may need to go through several rounds of revisions and reviews before you’re ready to submit your proposal. This is why the quality of your first draft is the crucial point. A well-constructed initial draft sets the tone for the entire response development process. It can significantly expedite the journey from the blank page to the final submission.

Collaborating with internal experts

The strength of an RFP response lies in the collective expertise behind the content. An effective response brings together knowledge from different domains — be it technical, legal, sales, marketing, or operations. Often, these experts are engaged in their primary roles. Finding time for RFP collaboration might not be at the top of their priority list, making it challenging to gather their insights promptly. Plus, different experts might have different perspectives on the best way to approach a project or deliver a solution. Consolidating these diverse viewpoints into a unified response is not an easy task. It does not come as a surprise, collaborating with subject matter experts has been recognized as a top challenge in crafting an RFP response.

Meeting Strict Deadlines

Hopefully you did the assessment if the time crunch is worthwhile for your team at the very beginning.

When faced with tight deadlines, teams often have only a narrow window to craft a thorough response. In such situations, past experiences and a robust RFP process become vital. While the reasons for such short response periods might be unclear, they certainly place significant stress on everyone involved.

Competitive Edge

RFP responses usually require demonstrating how your software solution compares to competitors in the market. Gathering accurate and up-to-date information about competing products and presenting your differentiators effectively can be time-consuming. Research done by RFP software companies shows that around 40% of RFP teams have issues finding up-to-date accurate answers.

Inaccurate or insufficient competitive analysis may result in an unconvincing differentiation from competitors.

Misaligned Pricing

Determining the appropriate pricing structure that aligns with the client’s budget while reflecting the value of your software can be complex. Striking the right balance between affordability and profitability requires careful consideration.

Wrong price tag on the RFP can also lead to misaligned cost structures, causing potential clients to perceive the offering as overpriced or undervalued. This can hinder successful negotiations and the closing of deals.

Risk Assessment and Mitigation

Due to constraints such as unclear data, a lack of in-depth understanding of past implementations, and pressing timeframes, many companies highlight generic risks. Instead of tailoring their risk assessment to the specific project and the client, they often share more general risks associated with the project implementation. They are well aware that risks and mitigation plans should be well thought through, but sometimes it is just impossible to grasp everything and connect all the dots to see the risks clearly at this very early stage.

How are companies addressing these challenges today?

Many companies deal with these challenges daily, proving that while solutions exist, they may not always be optimal. Although around 45% of submitted RFPs do lead to closed deals (as noted earlier in this post), the need to improve this figure continues.

A popular approach is to dedicate a person or an entire team to manage RFP responses. It brings the right focus and less communication gap, but it also comes with its own set of potential setbacks and challenges. Recruiting a new team or individual entails costs. Reallocating from within the company brings the risk of impacting other team’s delivery. Training is essential, even for experienced professionals, and the learning curve might introduce mistakes in initial RFP replies.

Building an internal RFP process is another strategy. This approach improves both efficiency and consistency. It is just a blast to know who does what, when and why and where all the templates and answers can be found. However, anyone who has tried to put a new process in place knows that it demands significant time and effort, and often is not fully adopted. Some of the interviewers shared that robust internal processes can not bring value without dedicated RFP experts who understand the complexity of crafting an RFP response. Responses may lack the necessary depth and effectiveness, so even with the new internal process all the work tends to go to individual experts.

As the company grows and handles more projects, manual RFP processes become less efficient and companies often turn towards a software solution. When navigating the complexity of the RFP process, it might seem logical to invest in a comprehensive, one-size-fits-all tool. But, as the saying goes, “Jack of all trades, master of none.” A comprehensive tool, designed to handle every possible requirement, often brings with it a complexity that can be daunting. Users face steep learning curves and might end up utilizing only a fraction of the available features, while still paying for the whole solution. People, being creatures of habit, may find it challenging to let go of familiar processes and adopt new ones, especially if the new tool feels overly complicated and it is not making their work any easier. Businesses need to assess the actual pain points they’re trying to address and consider whether a specialized tool might serve them better.

Perhaps the key is in simplification. Tackling one challenge at the time, one part of this constantly evolving puzzle of creating an RFP response.

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