Procurement

Thibaut Maenner

Consultant - Procurement

Introduction

Request for proposals (RFPs) are at the heart of procurement processes for many companies and organizations. Whether in the public or private sector, a well-managed RFP enables the purchasing company to obtain the best conditions in terms of cost, quality, and delivery times.
With recent technological advancements and the growing importance of ESG (Environmental, Social, and Governance) criteria, new practices are emerging. Companies must now consider environmental impact, social responsibility, and the use of technological tools such as artificial intelligence (AI) to remain competitive. This article revisits the fundamentals of the RFP process while exploring current and future developments.

1. The different types of RFPs

An RFP is a formal process through which an organization (public or private) invites suppliers to submit proposals for a project or service. It is a key tool for obtaining the best solutions while ensuring fair competition.

Public RFPs in Quebec

In Quebec’s public sector, RFPs are governed by the Public Bodies Contracts Act (LCOP), ensuring transparency and integrity in the management of public funds. Public RFPs are often open to all companies through platforms like SEAO (Electronic Tendering System) or MERX in Canada.

Private RFPs in Quebec

Private RFPs, which are more flexible, involve non-public companies seeking partners. Unlike the public sector, they are not always published and may be sent directly to pre-qualified suppliers. However, even in this sector, a trend toward more transparency is emerging thanks to digital platforms.

2. Steps in the RFP process

1. Identification of the need

Evaluation of needs with internal stakeholders (type of product/service required, volumes, technical requirements, etc.)
Formulation of needs in a specifications document.

2. Drafting of documents

Request for Information (RFI)
Main document/Specifications (RFP)
Scoring grid
Technical annexes
Pricing grid (RFQ)

3. Defining the supplier list

Creation of a long list of bidders from internal suppliers and/or external research
Sending the Request for Information (RFI)
Evaluation of RFI responses and formulation of the list of suppliers to include

4. Sending to participants/publication

Sending invitations to selected bidders
Publishing the request for proposal on the platform (e.g., SEAO or MERX for public tenders)

5. Managing the request for proposal

Organizing a Q&A session with suppliers (clarifying specifications)
Monitoring submissions (receipt of offers, data compilation)

6. Analysis

Comparative analysis of bids based on technical, financial, and environmental criteria
Selection of a shortlist of suppliers for the negotiation phase
Organizing technical demonstrations (if necessary)

7. Negotiation

Negotiation of financial and contractual terms with pre-selected suppliers
Reevaluation of bids after negotiations (costs, deadlines & guarantees)
Awarding the contract to the best-positioned supplier and communicating the results

8. Contractualization

Drafting the contract: formalization of negotiated terms (price, deadlines, delivery conditions, penalties, etc.), and integration of specific legal and regulatory aspects
Internal and legal validation: review and approval of the contract by internal teams (legal, finance, procurement)

3. Essential documents for responding to an RFP

Responding to an RFP requires meticulous documentation. A clear and concise presentation is essential to stand out and maximize the chances of success.

Request for information (RFI)

Before launching a formal RFP, it is sometimes recommended to issue a Request for Information (RFI). This document is used to gather preliminary information from potential suppliers to better understand the solutions available on the market, technological innovations, and service providers’ capabilities. The RFI allows the issuing organization to clarify its needs, technical expectations, and ensure the right suppliers are invited.

Main submission document or RFP (Request for Proposal)

The submission document is the key RFP document, outlining the client’s needs in terms of products or services. An in-depth analysis of this document is crucial to understand the requester’s expectations. A successful response should demonstrate how the company can not only meet the requirements but also provide added value.
When required, a technical dossier can be attached to demonstrate technical capacity. Certifications, qualifications, and previous experience are detailed here. For technical or complex RFPs, a well-constructed technical dossier is essential to convince the client.

Financial proposal or RFQ (Request for Quotation)

This part should be detailed, considering all aspects of total cost (acquisition, licensing, maintenance, after-sales service, etc.). Transparency is crucial to avoid misunderstandings or future disagreements. Many companies now include performance clauses or incentives to guarantee long-term cost reductions.

Legal documents

Legal aspects are essential. It is important to provide all necessary warranties and references. Elements such as standard contracts, insurance policies, and privacy policies should also be included to demonstrate compliance with legal standards.

4. The impact of technology on RFP management

With the rise of digital technologies, solutions have emerged to automate much of the RFP process. Manual management of RFPs is not only time-consuming but also prone to human errors, which can lead to delays, additional costs, and even legal risks. To mitigate these issues, many digital e-sourcing solutions automate, simplify, and optimize RFP management.

The contribution of digital solutions to the RFP process

Digital e-sourcing solutions, such as Coupa, SAP Ariba, or Jaggaer, have become essential tools for companies looking to improve the efficiency of their procurement processes. They offer several key advantages:

Automation of repetitive tasks: One of the main benefits of e-sourcing platforms is their ability to automate the most tedious tasks, such as sending and receiving offers, compiling responses, or analyzing proposals. This significantly reduces human errors, freeing up time to focus on higher-value activities like qualitative analysis of bids and meetings with finalist suppliers.

Data centralization: These platforms centralize all data related to RFPs (supplier data, technical and financial offers), improving traceability and efficiency in the process. Buyers can easily track progress, check deadlines, and compare bids in a more structured way.

Real-time collaboration: Another notable advantage is the ability to collaborate in real-time with suppliers. This helps quickly clarify questions or resolve blocking points through integrated communication tools, eliminating long and tedious email exchanges.

Improved Analysis and Reporting: Thanks to advanced analytical capabilities, e-sourcing solutions offer comprehensive reporting tools. Buyers can define analysis scenarios in advance and then visualize data as interactive graphs and dashboards. This facilitates decision-making by providing key insights such as price trends and supplier performance.

Reverse Auctions: A technique increasingly used in RFPs to maximize supplier competitiveness while reducing costs for the buyer. Digital solutions like Coupa or Jaegger incorporate this feature directly into their platforms. Unlike a traditional auction where prices rise, reverse auctions involve lowering prices in real-time. In this process, suppliers submit initial proposals and, within a defined time window, compete to offer the lowest price while meeting technical and quality requirements.

5. The introduction of AI in the future of RFPs

The procurement and artificial intelligence markets are evolving rapidly. According to a study sponsored by GEP, 46% of respondents have accelerated AI adoption compared to other IT investments. The potential of this technology lies in automating tasks, particularly in data analysis and document generation.

Depending on the specific needs of the RFP, AI tools trained on multiple reference documents can generate regulatory documents, including price grids and RFP rules that meet the buyer’s requirements.
This technology also benefits suppliers by helping them identify the most relevant RFPs on specialized sites and reducing time spent on tedious searches.
AI’s current capabilities also enhance data analysis efficiency. By combining e-sourcing capabilities that consolidate all data on a single platform and prepare analysis scenarios, AI can suggest to buyers which suppliers should be selected.
Future developments aim to introduce a digital assistant that can accompany buyers throughout the process and help manage tasks.

6. Integrating ESG criteria into RFPs

ESG criteria play an increasingly important role in RFP processes, pushing companies to change their practices.

Environment: Reducing environmental impact is a major concern for companies today. This is reflected in RFPs by the introduction of supplier selection criteria focused on material sourcing, the percentage of recycled materials, and product and packaging recyclability.
Social: The social aspect, often overlooked in the past, is now central to supplier selection. Concrete commitments are increasingly required on themes such as diversity, inclusion, and human rights throughout the supply chain. Companies demonstrating strong social responsibility have an advantage in RFPs.
Governance: Clients are increasingly demanding transparency in the governance of the companies they work with. This includes ethical practices, the absence of conflicts of interest, and clear risk management policies. Good governance can be a decisive factor in choosing a bidder.

In this context, 21 environmental indicators have been introduced in Quebec’s public tendering system, SEAO, aimed at:

Reducing environmental impacts;
Creating social benefits;
Ensuring sustainable economic development.

Moreover, some RFPs require compliance with the ISO 20400 standard, which encourages suppliers to consider ESG issues in their supply chains and procurement processes.

Conclusion

We have seen that RFPs represent a critical strategic lever for companies and organizations, whether it is to maximize competitiveness or ensure transparent and efficient procurement management. As digital technologies, particularly e-sourcing, revolutionize RFP management, automation and advanced analysis optimize every step, from publication to final selection. With the introduction of AI and the growing consideration of ESG criteria, RFPs are evolving towards a more responsible, sustainable, and future-oriented era. Companies that integrate these innovations into their procurement practices will position themselves as leaders in their sector by combining economic performance, transparency, and ethical commitment.

Maxime Petit

Supply chain consultant

In an increasingly connected world, digitization has profoundly transformed many aspects of our lives, including how businesses operate. Once considered a competitive advantage just a few years ago, digitizing business processes has now become essential for any company wishing to remain competitive in the market. Gartner’s figures confirm this trend: 69% of companies have already implemented or are in the process of implementing a digital procurement solution that will enable them to achieve savings of 10 to 30%. As a crucial element of the supply chain, procurement is not exempt from the digital revolution. From supplier research and selection to invoicing, and contract management, all procurement procedures in a business present significant opportunities for digitization and even automation.

The primary goal of procurement digitization is obviously to reduce the risk of errors, centralize data, or streamline processes. However, with current technologies, it is also possible to go much further. For example, did you know that artificial intelligence can predict a potential stockout from a supplier, adjust inventory levels accordingly, and even search for alternative options on the market, all without any human intervention? Of course, all these advanced technologies are not even conceivable without the prior digitization of the company’s key procurement processes. That’s why this article presents the various possibilities of digitization, their advantages, and some future trends.

Procurement Digitization

To visualize the functionalities and possibilities brought by digital tools, we use a visualization of the “Source to Pay” process that defines the entirety of the purchasing cycle.

Depending on your needs, it may be wise to implement one or more specific solutions targeting a single procurement function at a time or to resort to the most comprehensive solutions on the market covering the entire Source To Pay (S2P) process, such as Coupa, our partner, and one of the market leaders. Whether by implementing a comprehensive solution comprising several modules or different solutions per function, it is essential to ensure that information is transmitted smoothly between the different modules, but also to other IT systems of the company (ERP, accounting information, HR, transport systems, etc.).

1.Source To Contract

The Source to Contract (S2C) function is a key step in the procurement process within a company. It encompasses all activities related to identifying potential suppliers, negotiating contractual conditions, and managing contracts throughout their lifecycle.

This part of the process generally involves many manual tasks involving multiple actors. By implementing a digital solution, we can reduce these manual tasks to focus on more strategic tasks. A digital S2P solution allows, among other things, to:

Send RFx via the platform.
Collaborate among all internal parties during supplier selection.
Automatically create a contract draft based on the selected offer.
Centralize and make contracts accessible to all authorized persons.
Track deadlines and receive notifications as they approach.
Create reports that facilitate supervision.

2.Procure To Pay

The Procure to Pay (P2P) function represents all processes related to the acquisition of goods and services up to supplier payment. It includes all stages, from supplier selection to finalizing payments.

With a digital P2P solution in place, the system allows users to:

Make purchases as on any other B2C online shopping platform.
Directly see existing contracts to prioritize contract purchases.
Approve purchase requests.
Track the approval of their purchase requests in real-time.
Automatically send an order to the supplier after approval.
Receive goods.
Create reports to control, supervise, and make informed decisions.

Regarding invoicing, a digital invoicing solution provides the ability to:

Receive supplier invoices automatically based on orders.
Digitize a PDF invoice using an Optical Character Recognition (OCR) tool.
Authorize payment if the invoice matches the order and receipt information.

Of course, a digital P2P solution must be adapted according to the needs of each company. Multiple parameters are customizable, such as authorizations, approval chains, automated elements with or without prior control, notifications, accounting data, etc. An implementation partner, such as Conseil 2.0, is of strategic importance to build a solution that meets the exact needs of the organization.

Advantages of Digitization

1. Reduction of Manual Tasks and Focus on Value-added Tasks

One of the main advantages of digitization in procurement is the reduction of manual tasks and the potential errors associated with them. This frees up time for employees to focus on high-value tasks such as supplier selection, contract negotiation, or expense analysis. Combined with better visibility and integration of the organization’s data, this productivity gain can quickly become exponential. Additionally, digital tools ensure reliability and traceability of actions, as well as a distribution of tasks performed among different actors, enabling easier management by managers and empowering employees.

2. Increased Data Visibility for Better Decision Making

The second advantage we chose to highlight is not limited to the procurement function but extends to the entire organization. Indeed, thanks to the digital tools in place, we can collect, store, and analyze purchasing data in real-time. This allows us to have a complete and precise view of expenses, including the most spent product or service categories, the most used suppliers, price trends, categories requiring new contracts, etc.

This increased visibility allows us to make more informed and strategic decisions. For example, we can more easily identify cost reduction opportunities by spotting categories where we can consolidate purchases or negotiate preferential rates by reducing our supplier base. The logistics department can also use this data to anticipate market fluctuations and adjust procurement strategy accordingly, optimizing performance and remaining competitive.

All this data can also be compiled into dashboards that centralize important information. For example, we can compile data into a dashboard to easily find contracts nearing expiration, for which we need to renegotiate the budget, for which market prices have decreased, etc. In turn, these dashboards can be used in a control tower, a concept we discuss in more detail in our other article.

For more information, feel free to consult our article dedicated to control towers in the supply chain.

3. Process Standardization and Cross-functional Collaboration

Implementing a P2P solution is also an opportunity to standardize procurement processes across the organization. First, the implementation of a new tool involves organizational transformation and is therefore a good time to collect everyone’s needs and redefine existing procurement processes. Then, by implementing a single tool for the entire organization, we ensure compliance with purchasing policies throughout the organization. The purchasing department, therefore, increases control over purchasing operations without diminishing the freedom of the rest of the company, or even increasing it. Furthermore, digitizing procurement through a single tool promotes collaboration by facilitating communication and information sharing between internal teams and also with external partners. This improves operational efficiency, strengthens relationships with suppliers, and better meets internal customer needs.

4. Integration of Sustainable Development in Decision Making

At a time when climate issues are becoming increasingly important, it is clear that the procurement function will have an important role to play in the ecological transition. Indeed, it is through procurement that emissions are mostly emitted, even if they are indirect emissions. According to Gartner, the lack of data is the main barrier to more sustainable procurement according to companies. Digitizing procurement functions now allows us to collect and analyze relevant data on our purchases, such as the carbon footprint of products, the ethical practices of suppliers, or the use of recycled materials. Provided that our suppliers are able to provide us with this information, digital tools allow us to compare and make informed choices in terms of environmental impact. These tools also help us to provide this information as comprehensively as possible to our suppliers. This demand for information will certainly become more frequent and rigorous in the near future.

For more information, do not hesitate to consult our article dedicated to sustainable development in procurement or our ESG service page.

If this article has piqued your curiosity or if you would like to learn more about the various ways to increase the digital maturity of your organization, do not hesitate to contact the Conseil 2.0 team. Our team consists of multidisciplinary experts in the supply chain, including procurement digitization specialists capable of meeting your needs. Conseil 2.0 contributes to value creation in the supply chain by offering solutions tailored to each company.

Tag: Procurement