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To RFP or not RFP, that should be the question

“The average RFP for Meeting and Event services costs a business…”

 The easy answer is there is not an average cost. However, there are some simple equations that should take you close to what it would cost your business; 


 

Cost of technology to manage RFI, RFQ, RFP set up, publishing and responses =W

+

Cost of outsourced resource to support the process such as consultancy or agency fees= X

+

Cost of internal resource to support identification, selection, appointment, de/implementation = Y

W + X + Y =Z


Simple. Except it is not unusual for quite a few sub costs to be forgotten while doing this exercise. You may be using in-house technology or a technology provider who already has a relationship with your business but…someone is paying the cost for this somewhere within your business. If you are using an external consultant it is very easy to see the cost of their support but… the amount of resource your incumbent agency is ploughing into their response is less obvious but you will be paying for it, directly or indirectly. It is easy to think “we have a procurement department and this is what they are paid for” but…they cannot manage this without significant input from key stakeholders within your business and in M&E those stakeholders tend to be many and senior (or costly and time precious).

So, factoring in the above you have a fairly accurate Z in pounds and pence, how much is that as a percentage of the contract value? As for the cost of tendering a contract, there is not an average cost for responding to an RFP. Some agents are smarter and better equipped than others, and some have still not seen the value in investing the right time and resource to expect a return, but information tells us the cost ranges between 1-2% of the contract value. Now see what range your costs percentage falls in and ask yourself the following;

Will that outlay deliver a real return on my significant investment? Have I budgeted to get that sum back and more by switching supplier? Is the potential cost of not changing greater than the very real cost of change?

Is there a way of knowing if your current incumbent is providing you with real value without testing the market and their competitors to find that out? What does good look like when nobody will ever tell you they are doing a bad job, or that somebody else may be a better fit for you?

We are not negative towards the RFP process. We have bid for (and been very successful!) many contracts in our previous lives and a well-managed RFP is both productive and necessary. We just think that sometimes the exercise is instigated because people cannot see an alternative approach that will tell them what they need to know. Or the tools to validate that a full blown RFP is the correct approach and be able to plot the ROI.

The Conference Doctor has worked for some of the leading agencies in the UK and has developed a health check that could save you having to spend a huge amount finding out the answers to all those questions. Contact us for a house visit and get a completely impartial view on how your sourcing process is performing for you.

Email us: enquiries@conferencedoctor.co.uk

Follow us: @confdoc

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