I have been asked multiple times on how to go about conducting an RFP for Vietnam suppliers. For instance, over the last few months I have been advising a Fortune 100 IT company on how to add Vietnam as a third offshore location (besides India & China).
Procurement should be doing this RFP with your IT stakeholders but I can also see reasons why Procurement may be conducting the RFP independently, e.g. Procurement may need to develop the business case for your stakeholders with the objective of creating competition to your current offshore providers.
Key Steps on How to Conduct an RFP:
Step 1: Conduct an RFI to identify qualified suppliers (or you can certainly contact me and I can advise you with a list of suppliers based on your needs)
- Determine the “right sized” suppliers possessing a sufficient talent pool
- Evaluate management team/account management capability to support your global operations
- Verify infrastructure capabilities (e.g. connectivity, secured facility, dedicated network etc.)
Step 2: Conduct an RFP with a short list of suppliers, including onsite due diligence visits
- Detail capability mapping and verify capacity
- Obtain rate cards for generic as well as niche skills (for both onshore & offshore work)
- Determine any discount mechanism
- Oral presentations
- Shortlist down for due diligence visit
- Conduct Due diligence visit (one week on site in Vietnam)
- Meet with Ministry of Information and/or Education or Ministry of Science & Technology to discuss stability, support and long term vision for the industry
- Visit National University and/or University of Polytechnic including town-hall meeting with students if possible
- Visit 2-3 suppliers in Hanoi and HCM City (based on your RFP results)
Step 3: Complete evaluation of suppliers
- Assuming that you evaluated Vietnam according to your risk/operation procedure, complete a scorecard of suppliers based on the following criteria:
- Capability match – Can they support your business needs?
- Capacity match – Can they support your volume?
- Offshore/Onshore operating model – Can they provide offshore support effectively?
- Operation risk evaluation
- Financial benefits – Will they deliver financial benefits against current locations (US, India, China etc.)?
Step 4: Recommend to senior executives
- Develop business case for using Vietnam
- Facilitate internal discussion on using Vietnam as an alternative location
- Add Vietnam as a new location
- Select supplier and initiate contracting
If you have any questions about the RFP or Vietnam, then feel free to reach out to me via the Blog.