How the Favorite Supplier Loses: How RFP Scoring on a Strategic Sourcing Platform Improves Outcomes

Creating an objective supplier evaluation

The initial demonstrations had helped the stakeholders better understand their needs. K2 Sourcing used that knowledge to develop a detailed statement of work, RFP questionnaire and evaluation methodology.

Each supplier responded to the same functional, technical, service and commercial requirements. They submitted pricing in a consistent format and participated in a proposal defense that required them to support their written answers with demonstrations and additional evidence.

Each stakeholder then independently scored the responses through the K2 Sourcing strategic sourcing application.

The scores were not treated as a simple voting exercise. K2 Sourcing facilitated discussions wherever stakeholders evaluated the same response differently. Those conversations exposed unclear assumptions, operational concerns and requirements that needed further supplier clarification.

After several rounds of discussion and clarification, the team reached a surprising conclusion.

The supplier originally expected to win was not the strongest solution. Another supplier demonstrated a better overall fit and a higher value proposition.

Four decision risks procurement teams should recognize

There is no evidence that every psychological influence discussed below affected this particular sourcing team. The stakeholders demonstrated their willingness to reconsider their original preference and follow the evidence.

However, these are common decision risks that procurement professionals should recognize whenever a team enters an RFP with an early favorite.

1. Relationship influence

Robert Cialdini’s Principle of Liking explains that people are more readily influenced by individuals they know, like or view as similar to themselves. [1]

Positive supplier relationships are valuable, but familiarity with a salesperson or supplier can potentially influence how a proposal is interpreted. Teams may give a familiar supplier the benefit of the doubt while expecting more evidence from an unfamiliar competitor.

Requiring every supplier to answer the same questions and support its claims with evidence helped separate relationship strength from functional fit and commercial value.

2. Evidence filtering

Confirmation bias is the tendency to seek or interpret evidence in ways that support an existing belief. Psychologist Raymond Nickerson documented how this can affect the way people search for, evaluate and remember information. [2]

In an RFP, stakeholders who already prefer a supplier may focus on information that supports their choice while giving less attention to weaknesses or contradictory evidence.

Commitment can reinforce the effect. Cialdini’s Principle of Consistency explains that people generally prefer their later actions to remain consistent with positions they have already taken. [1]

Defined scoring criteria and documented supplier responses gave the team a common body of evidence against which every proposal could be evaluated.

3. First impression effects

The first supplier demonstration can become an anchor against which every later solution is compared. Tversky and Kahneman’s research showed that people often remain influenced by an initial reference point even when additional information becomes available. [3]

A related risk is the halo effect. Edward Thorndike’s foundational research found that a strong overall impression can influence how separate qualities are evaluated. [4]

In supplier selection, a polished demonstration, respected brand, charismatic salesperson or exceptional feature can potentially improve perceptions of unrelated capabilities.

Scoring individual requirements separately helped the team evaluate software functionality, implementation readiness, support and contractual terms independently rather than relying on an overall impression.

4. Hierarchy and consensus

Senior leaders appropriately have significant influence over major supplier decisions. However, an early preference expressed by a vice president or department leader can unintentionally influence how other team members score or discuss the suppliers.

Cialdini’s Principle of Authority explains why people often give greater weight to the views of recognized experts and leaders. [1] Irving Janis’s work on groupthink also examined how the desire for consensus can discourage individuals from expressing concerns or alternative interpretations. [5]

This does not require a senior leader to pressure the group. Employees may simply be reluctant to contradict an executive, create conflict or appear to delay the project.

Independent scoring was therefore essential. Stakeholders recorded their evaluations before the group discussion and before hearing how senior leaders or other influential participants had scored the proposals.

The subsequent scoring discussions made disagreement productive. Rather than asking who was right, K2 Sourcing asked what evidence caused two stakeholders to reach different conclusions.

A better solution and stronger commercial outcome

The structured RFP produced substantially more value than a direct negotiation with the original favorite.

The company achieved pricing approximately 12 percent below the suppliers’ opening offers. It also negotiated:

1. Additional training hours
2. Expanded hypercare support
3. Additional configuration assistance
4. Stronger cancellation rights
5. Improved payment terms

These improvements demonstrate why supplier value should not be measured by price or software functionality alone. The final agreement reflected functional fit, implementation support, contractual flexibility, service commitments and total commercial value.

Why independent sourcing support matters

K2 Sourcing did not enter the process to overturn the stakeholders’ preferred decision. As a strategic sourcing company providing RFP management services, our role was to establish a fair structure, encourage open discussion, test supplier claims and make the basis for the final recommendation transparent.

An independent strategic sourcing company can make reconsideration easier. Stakeholders can follow the evidence without requiring any individual to personally admit that an earlier preference was wrong.

A strategic sourcing platform provides the scoring, documentation and comparison tools. Independent sourcing support adds facilitation, commercial judgment and the discipline to pursue important differences until they are fully understood.

In this case, the result was more than greater confidence in the final award. The organization selected a better fitting solution, reduced pricing by approximately 12 percent and secured stronger support, payment and contractual terms.

The favorite supplier lost, but the company achieved a substantially better outcome.

Sources

1. Cialdini, Robert B. “The Seven Principles of Persuasion.” Influence at Work.
2. Nickerson, Raymond S. “Confirmation Bias: A Ubiquitous Phenomenon in Many Guises.” Review of General Psychology, volume 2, number 2, 1998, pages 175 to 220. DOI: 10.1037/1089-2680.2.2.175.
3. Tversky, Amos, and Daniel Kahneman. “Judgment under Uncertainty: Heuristics and Biases.” Science, volume 185, number 4157, 1974, pages 1124 to 1131. DOI: 10.1126/science.185.4157.1124.
4. Thorndike, Edward L. “A Constant Error in Psychological Ratings.” Journal of Applied Psychology, volume 4, number 1, 1920, pages 25 to 29. DOI: 10.1037/h0071663.
5. Janis, Irving L. “Groupthink.” Psychology Today, November 1971.