6 mistakes that procurement makes when crafting a travel RFP

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LloydBarkhuizen_small.jpgThe arduous RFP (Request for Proposal) process is a bit like being forced to eat your greens as a child. You don't want to do it, but you're continually told that it's good for you.

But, that's not necessarily the case. RFPs are only 'good' for you and your business if you execute them properly. In this month's SmartProcurement, Lloyd Barkhuizen, Director: South Africa and Africa, FCM Travel Solutions, outlines six common pitfalls to avoid when inviting suppliers to pitch for your organisation's travel contract.

Join us at Smart Procurement World's Gauteng Indaba on 18 & 19 September where Lloyd Barkhuizen will discuss how to use big data to make more informed decisions around travel spend, traveller friction and travel programme efficiencies.

1. Unreasonable timeframes
It will have taken your organisation months to prepare a RFP, so give prospective vendors the same advantage. Rushing the process will detract from the quality of the proposals that you receive.

Some prospective clients at FCM recently asked for a response to a RFP in as little as three days. And those were major accounts. The reality is, it can take a full month to work on a good RFP. If your organisation wants a detailed proposal, give the travel management company (TMC) the time to get back to you with all the desired information.

2. Using a one-size-fits-all template
You can't buy travel the way you would buy pencils. Corporate travel is complicated. It is not a commodity or low-value, high-volume product that is one-dimensional. You won't incite staff dissatisfaction because you purchased 2B instead of HB pencils, so don't use a commodity acquisition RFP template to find the right TMC partner. It is better to devise a RFP that talks to a managed-travel offering.

3. Making your list of candidates too long
Don't invite too many candidates to the table. The more TMCs you ask to bid, the more difficult it is going to be for you to discern who the right partner is. Do your homework upfront and create a short-list of who to approach instead of sending out a cold tender request to everyone.

A good way to compile a short-list is to find out how active the TMC is within travel associations, such as the Association of Southern African Travel Agents (ASATA), African Business Travel Association (ABTA) and Global Business Travel Association (GBTA), and to speak to industry peers.

4. Using too many open-ended questions
Be clear on what you're looking for as an organisation, so that the TMC can respond accordingly. It is going to be very difficult for you to compare apples with apples if you can't articulate the needs of your company and get back simple yes / no answers from prospective TMC partners.

5. A lack of communication
The quality of a RFP and the prospective partnership is improved when communication channels are open. An upfront meeting with short-listed TMCs to clarify the scope of the RFP can enhance the quality of the proposals.

6. A focus on price over quality
Don't select a particular TMC because you feel you'll save on service fees. Short-term gains delivered through lower transaction fees do not necessarily translate into long-term savings. A TMC needs to add value by providing savings, but also by providing value in other areas, such as interpreting data that positively informs your travel policy, or when it comes to supplier negotiations, delivering technological tools and solutions that help fulfil duty-of-care responsibilities, and reduces traveller friction.

The old adage of "what you put in, is what you get out" rings true when it comes to creating valuable RFPs. The better your request is structured, the better the proposals you are likely to receive and the easier it will be to appoint the right partner.

A full whitepaper is available here with more insights on how to structure an effective travel RFP.

Join us at Smart Procurement World's Gauteng Indaba on 18 & 19 September where we will discuss how to use big data to make more informed decisions around travel spend, traveller friction and travel programme efficiencies.

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