Selecting the Right RFx Management Solution

by Tim Schmidt

Evolution of procurement

We have been in the sourcing software business for almost 20 years. In the beginning, our software was simply a tool to post RFP documents, later we added supplier registration, then online bidding, and finally contract management to our ProcureWare platform.

Today, most sourcing suites include these core tools or modules. On the surface, they all appear to be very similar. Yet, over the years, sourcing software has become more specialized. Different systems emphasize different features that make them better suited for specific markets and applications. For example, ProcureWare is ideal for public sectors, civil construction, and infrastructure-intensive organizations like utilities. Conversely, it is not as well suited for manufacturing, logistics, or staffing.

Narrow down your goals

As you consider which RFx Management system is going to best meet your specific application, you should ask these questions:

• What will we source?
• Are there regulatory considerations specific to processes or documentation?
• What are the problems I’m trying to solve?
• How many users will I have and what controls are necessary?
• Will I centralize souring activities, have a decentralized approach, or a combination of the two?
• How are bids evaluated?
• What other systems or processes should the system interface?

The answers to these questions will help you prioritize common sourcing tools and evaluate them as they relate to your top goals, current processes, and specialization within your specific industry.

Common Sourcing Tools

Below you will find a list of 11 common sourcing tools. This list can help you determine which features and capabilities are most important for your procurement process.

1. Supplier registration

Public supplier registration is a fundamental component of the public procurement process and sourcing solutions that target government agencies all provide this functionality. In recent years, supplier self-registration has also gained traction in the private sector. Many organizations choose to implement supplier self-registration to save time and improve the accuracy of their databases. As you consider a sourcing platform, take it a step further and consider what information needs to be captured and how it will be used. (For a more complete discussion, see Top 6 Reasons for Public Online Vendor Registration).

2. Shared supplier network

Very small organizations with infrequent sourcing events may opt for a shared supplier network. These networks aggregate a database of suppliers and allow member organizations to solicit suppliers as needed. For further discussion about supplier networks, see Evaluate the Options: Choosing a Supplier Network)

3. Supplier approval workflow

Most private organizations require supplier approval before the supplier can submit a bid, but few public agencies have this same requirement. Analyze and document your processes. Do you have a general approval process or are suppliers approved for a specific bid (common in construction)? What are the approvals for specific categories or types of bids? How complex is the process? What data-driven rules apply?

4. RFx document posting

Today most systems allow bid managers to post RFx documents for retrieval by suppliers. This is a more reliable approach than sending the documents via email. Public agencies typically make RFx documents public, while private organizations use an invitation only approach. Construction projects can have very large document sets and some organizations require an NDA to access documents. Look for systems that can adapt to the spectrum of scenarios you encounter.

5. Q&A management

Many buyers dread managing the Q&A process; phone calls are time consuming, aggregating emails is error-prone, and collaborating with internal experts is tedious. While most systems today have tools for collecting and responding to questions, there is significant variation in how questions are managed. Look for features that support your typical volumes, levels of collaboration, and transparency requirements.

6. Insurance management

If you require insurance as part of a pre-qualification process or have a significant number of supplier contracts, look for a system with integrated supplier insurance tracking. Spreadsheets are error-prone and expired insurance represents significant risk. And, of course, insurance often expires before the end of a contract.

7. Diversity management

More and more organizations are tracking the diversity of their suppliers. Some industries are regulated and have specific diversity goals while other organizations simply want to know. If tracking diversity is important to your organization, look beyond simply recording the information. There are solutions that track the participation of diverse-suppliers in each phase from registration, invited to bid, bids submitted, and awards. Some also track the diversity of subcontractors on contracts.

8. Sealed bidding

Sealed bidding is a must for any public organization and increasingly relevant for private companies. Verify that the system is able to facilitate your specific sealed bidding requirements online. For further discussion, see Sealed Bidding: When does it make sense?).

9. Bid scoring and team evaluation

How do you analyze bid responses in a typical bid? Construction bids are typically awarded based upon total price, RFPs are often evaluated by a team, and transportation bids are calculated based upon routes and volumes. Understand how you evaluate bids, then select a solution that streamlines those processes. For more information, see Top 7 Scoring Methods).

10. API for system integration

Most organizations over-estimate their integration requirements. Often, the sourcing solution is best implemented as a stand-alone application since materials and services are procured inconsistently. Even so, there are a few areas where integration can streamline processes and ensure consistency across the organization. Identify specific integration needs and identify a solution with an API that lets you easily share information.

11. Contract management

The available solutions for contract management are exceedingly broad. The top features to consider are contract authoring, online negotiation tools, digital signatures, spend tracking, and more. If your needs are complex, you will probably need a separate system. In that case, I recommend that you treat contract management as a separate purchase decision. However, if your needs are limited to centralizing supplier contracts, making sure they do not expire, and tracking relevant activities, then it is much easier to find RFx management systems with adequate toolsets.


Naturally, this is only a sampling of available features. You can use this list to narrow down your priorities. When you are ready to issue an RFP, we recommend that you avoid creating long lists of specific features or specifying how problems should be addressed. Instead, focus on your goals and let the software providers present solutions.