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Originally Posted On: https://rfp360.com/vendor-profiles/
There’s no doubt that communication is key to building successful vendor relationships. But heavy workloads and overflowing inboxes plague strategic sourcing professionals and RFP consultants alike. While staying abreast of updates from vendors is important, it’s also time-consuming. As a result, procurement teams are leveraging vendor profiles to ease the burden.
Using a vendor profile, sometimes called a supplier profile, vendor assessment or supplier questionnaire, is the secret weapon of savvy strategic sourcing teams and RFP consultants. Specifically, they are using this tool to centralize updates and speed their vendor selection. In this blog post, I’ll provide insights about what vendor profiles are, their benefits, how to use them and how they empower a more strategic approach to vendor management.
What is a vendor profile?
A vendor profile is a reference document used by sourcing professionals to catalog important vendor information. Procurement professionals issue the questionnaire and vendors complete it. Think of these profiles as a digital and detailed rolodex entry.
The profile contains questions that help procurement professionals understand the vendor’s approach, differentiators and details of their offering. Generally recurring procurement projects are the best fit for supplier profiles.
What’s the difference between vendor profiles and a request for information
Much like other RFx documents, vendor profiles take a question and answer format. You write questions, invite participants to respond and view the results. And, the questions are often very similar to a request for information (RFI), so what’s the difference?
The primary distinction is that a vendor profile is a living document and doesn’t close. It gathers information from the vendor about a particular product or service. It’s regularly updated and kept on file for future procurement projects involving that vendor’s offering.
On the other hand, an RFI is typically issued in conjunction with a one-time project. An RFI is best for gathering information from vendors for an upcoming procurement event. Consequently, it is often a precursor to a request for proposal (RFP). As with other RFx documents, the RFI has a deadline that suppliers must meet and there’s a defined conclusion.
For example, an employee benefits company that needs a new email automation solution, might issue an RFI to explore the current technology landscape. However, once they select their vendors to move forward to the RFP, it’s unlikely they’ll need to reference the information from the RFI again.
Alternatively, the same employee benefits company offers consulting services for their clients. Therefore, they may leverage vendor profiles for each of their employee benefits categories. The vendor profiles cover information that helps them pre-select the best fits for their client.
The benefits of vendor profiles in strategic sourcing
Organizations that practice strategic sourcing save time using vendor profiles. They offer a headstart by providing baseline information for each vendor. Additionally, profiles are helpful for organizations issuing RFPs as well as vendors who answer them. They improve the process, allow proactive updates and improve outcomes.
Faster vendor selection
By leveraging profiles, you can filter and search for keywords or services within the profile. For instance, there may be hundreds of vendors that provide retirement benefits. However, issuing a full RFP to all of them is inefficient. Afterall, many of the vendors won’t meet the company’s requirements. However, with vendor profiles, vendor selection is much easier. The procurement team can cast a wide net, but also quickly narrow the list.
For instance, if the company prefers a provider that is local to their region, they can filter the profiles to see only vendors that meet that criteria. A simple search narrows the list to a more manageable shortlist and it ensures that vendors don’t spend time answering an RFP they are unlikely to win.
With vendor profiles, you can be sure that you’re issuing your RFP to the most qualified vendors. So, when the RFP is issued, it can be much more concise. There’s no need to ask the general questions that are already covered in the supplier profile. Consequently, the RFP can be more focused on the specific needs of the business or client. This is more efficient for the team evaluating the RFP as well as the vendors responding to it.
Proactive vendor updates
Ideally, vendor profiles are updated regularly and the information is always current. However, it’s difficult to keep up with changes. Afterall, vendor offerings expand and evolve all the time. Likely, well-intentioned updates from vendors fill your inbox and are then discarded. However, when it comes time to issue your next RFP, you may find yourself wishing you had that information at hand.
Certainly you can periodically send out the profiles for updates. But, an approach that allows your vendors to update as needed saves even more time. In this situation, a file sharing system can help.
You can enable access to each individual supplier profile so they can create updates themselves. While this solution is better than managing vendors with manual updates, recurring RFIs and tracking spreadsheets, it’s far from perfect.
This is where RFP management software shines. With an RFP solution, vendors are empowered to access and proactively update their profile at any time. When updates are made, you are notified and the date is noted so you know when the information was last reviewed. In addition, you can collaborate with vendors, send update reminders and enable profile scoring to make vendor pre-selection easier. This keeps your inbox clear and ensures that you have the information to select the best vendors when you need it.
Easier vendor onboarding
If you work in procurement, you often get calls from potential vendors. They want to connect with you in order to be added to your vendor library and considered for future RFPs. With vendor profiles you have a quick way to qualify and onboard potential new vendors. When you send a supplier profile, you save time and avoid lengthy sales conversations. At the same time, you ensure you have all the information you need to evaluate the new vendor fairly.
How to create a vendor profile template
The easiest way to create a vendor profile template is to review a previous RFI or RFP. From that document, select the questions that occur most frequently. Add those questions to your supplier assessment form. Remember to keep the questions general and remove any that are only applicable to the previous project.
Vendor profile form questions should cover:
- Basic vendor information (locations, size, etc.)
- Vendor background and experience
- Product or service details, capabilities and differentiators
- Customer experience policies
- Technical and security information
Vendor profile template
While your vendor profile form should be highly customized to your business’s needs, you can start with this template. Be sure to review past RFIs and add the questions that pop up more than once.
The value of vendor profiles
Vendor profiles allow procurement professionals to be even more strategic, efficient and effective. In addition, profiles improve visibility, ensure accuracy and save time for vendors as well. Ultimately, everyone benefits from a faster, clearer RFP process.