There’s a fundamental flaw in the RFP system as it exists today. The problem is, more often than not, a company looking to source new technology using an RFP might not be knowledgeable in the area yet. We’ve seen many RFPs for e-invoicing solutions where the person that put it together doesn’t have a clear grasp of what they are looking for.
And why should they? This is a fast moving area with new features and functionality being rolled out all the time. So we thought it might be useful to put together some suggestions for anyone that finds themselves in exactly this situation.
While we can’t help you with all your RFP needs, we can give you some idea of which questions to ask when you’re on the hunt for the perfect tool based on our wide-ranging experience in this area.
The suggestions below are obviously based on our perspective; namely that you should prioritise the most broadly functional solution that provides as much value as possible at the best price, without locking you into a single vendor forever.
If you have any thoughts or questions, get in touch or leave us a comment below – we’d love to hear from you and discuss this in more detail.
1. Am I signing up for a portal or a network?
Broadly speaking, there are two approaches to e-invoicing solutions:
A) A big buyer puts up a portal that suppliers sign into and submit invoices
B) Buyers and suppliers exchange invoices through one, shared network
Now, you may have noticed the issue here. Option A means that suppliers will have to scuttle around logging into each buyer’s e-invoicing portal separately – a massive headache. By contrast, Option B means you can do all your invoicing with different companies in one place.
RFP TIP: When it comes to the RFP, consider which of these categories each tool might fit into and design a process that will classify them accordingly.
2. Is the platform open and how is its interoperability?
The tools you choose should not have to function as silos. It’s in the nature of e-invoicing that many companies will be using different financing solutions and you’ll need to pick a product that provides the maximum compatibility with the maximum convenience.
RFP TIP: Avoid long-term vendor lock-in by prioritising interoperability – be suspicious of firms that try and trap your data in their system and don’t support compatibility with other secure and reliable providers.
3. Are your suppliers going to sign up to use the service?
Whichever tool you pick, it’s vital to get as many of the companies you work with using it as quickly as possible. Naturally, if it costs money for suppliers, or has complicated interfaces that aren’t compatible with current systems, this may negatively effect the speed of adoption.
RFP TIP: Ask your vendor to put their money where their mouth is and do a six month pilot of the software with a commitment to reach a target of suppliers or invoices sent through the system.
4. How seriously do they take compliance and security?
Writing a strong RFP sometimes requires understanding of which features are “nice-to-haves” and which are “must-haves”. And security along with compliance are two areas where you just can’t afford to compromise.
RFP TIP: Don’t rely on the candidates’ claims of security and compliance – get proof in the form of whitepapers and auditor reports.
5. Who is the business model designed to help?
The old way of e-invoicing traditionally focused 70% of the cost on smaller suppliers and 30% onto the big buyer who implemented the system. The thing you have to remember here is that if suppliers now have to pay to send you invoices, someone has to absorb that cost and, more often than not, the result will be higher prices all round and lower adoption rates by all.
RFP TIP: Does the product tax suppliers for using it? Consider the knock-on ramification if so or look for systems that don’t push the cost their way.
6. Get your suppliers’ views on the selection process
We’ve touched on the idea that there are inevitably multiple stakeholders in the outcome of your e-invoicing selection process. But any system is doomed to fail entirely when end-users don’t adopt the tools. Get them involved in selection to create advocates in your community for the roll out.
RFP TIP: Invite small, medium and large suppliers for their thoughts on the e-invoicing systems you’re considering.
7. Get references that reflect this too
Just as you will want to run your candidates past current suppliers, ask for references from both suppliers and buyers to get a feel for the experience of those already using the tool.
RFP TIP: A variety of insights into tools will provide you with the most complete picture of the potential.
8. Is the system hosted locally or in the cloud?
The hosting of an e-invoicing solution can effect a whole range of things, from deployment times to ongoing maintenance costs. On top of that, it’s important to beware “hosted” solutions that really just take a desktop deployment and dump it into the cloud. While hosting costs diminish in this case, the paradigm can still be one of expensive upgrades.
RFP TIP: Be aware of the potential consequences of each option. Will you need IT resource to maintain the system on site? Will you be missing out on upgrades to cloud products that can be rolled out instantly?
9. Can the tools be adapted to accommodate your requirements?
How extensive are the tools you’re looking at? What’s required to add new functionality? Is there future growth potential in functionality on the platform? Can you add bespoke functionality easily if required?
RFP TIP: E-invoicing can either be the end of the story or the beginning – look for a platform that has the potential to be tweaked to suit particular verticals or offer extra functionality in the form of apps.
10. Can it help you with more than just e-invoicing?
It’s worth repeating: think about the value that your e-invoicing platform may be able to provide to departments beyond just the “accounts payable” team. Consider how you can leverage the value of relationships with other companies and change the way you do business – your e-invoicing tool is potentially the backbone to all of this.
RFP TIP: Don’t make your selection criteria too narrow. Flexibility should reward the best all-round tool for your business.
