The RFP as a Strategic Tool

If you ask treasurers what comes to mind when they think about requests for proposals (RFPs) many will talk about a document or template that includes a number of questions, sections and appendices. Others will talk about it as a process that takes place every three to five years when they are looking for a new banking partner or the renewal of a cash management relationship. It may describe the work a treasurer has to put in to distribute an RFP, sifting through the responses before selecting a preferred supplier. What few people will mention though is the length and depth of the preparatory work and ‘needs analysis’ required to create an appropriate, relevant and well-crafted RFP document. This preparatory stage should not be overlooked. 

This first step in the RFP process is not always given the attention it deserves. This is understandable in an environment where treasurers are faced with many competing pressures and demands on their time. Thorough preparation and strategic alignment of the RFP process is vital, however, in getting a response from banks that not only fits current needs but is also future proofed, placing the ability to support the corporation’s business challenges and objectives over the short, medium and even long term to the forefront. 

This article sets out how the RFP presents a three-fold opportunity: 

  1. To take a strategic and long term view of the treasury function. 
  2. To gather new ideas around how best to support the business. 
  3. To conduct a research and engagement process that encourages buy-in among wider stakeholders and demonstrates the strategic role treasury can play.

Additionally, the start of an RFP process presents an opportunity for treasurers to ensure that the document supports the finance and treasury operating model. It also allows treasurers to plan and define the RFP requirements in relation to the broader strategic direction of the firm. With this foundation in place, the latter stages of the RFP process, such as evaluating responses, become much easier to conduct and relevant to the business. 

Breaking down this preparatory stage, the question arises what should treasurers have completed before they put pen to paper on an RFP document? 

Long-term and Strategic Planning Exercises

All RFPs will include a level of detail around the corporation’s current situation and needs, for which treasurers will secure and provide the latest information around corporate structure, size and the number of markets in which the firm operates, its geographical footprint and key activity data. 

Importantly, the start of an RFP process is an opportunity to take a long-term view of the way the cash management function is operating, to review and clearly articulate the strategy for the next three, five and even 10 years, and to analyse and explain how cash management maps to the wider business. Ultimately, an RFP and end solution that is based on the team’s needs today may not be flexible enough to adapt to how the business wants to look and operate in the future. Future-gazing is important. 

The strategic planning exercise should entail looking across the wider operating model, including technology, organisation, people and process, and the desired role of treasury. It is vital that the RFP reflects and supports the business’s key strategic objectives and challenges. For example, expansion into new markets can create a need to deal with additional currencies, new payment formats, new suppliers and third parties; all of which impact cash and treasury and the solutions required. Will the company be looking to venture into new acquisitions? What new regulatory environments might be encountered? Is the company’s IT department aiming to put in place a single instance of an enterprise resource planning (ERP) system into the planning horizon? 

How should treasury prepare to effectively manage and leverage these changes? How should the RFP process support these business objectives and treasury’s response to the challenges? 

It is undoubtedly easier to obtain this wider view of the operating model if treasury has already achieved full visibility on end-to-end cash flows. In some corporations, however, responsibility for cash management is shared with finance, operations and other teams, both locally and internationally. 


One forum which can work well for exploring cross-function connections and long-term business plans is an internal pre-RFP workshop. This brings together a wide range of relevant stakeholders, from finance and operations to legal, tax and IT, to discuss the business’s working capital, payments, processing and technology needs. Procurement should also be involved at this stage so that their requirements are fully factored in ahead of time. 

In the case of companies that have global operating models, it may ultimately make sense for the RFP to be a global one, perhaps with supporting regional RFPs in local areas. The initial data and information gathering should be conducted internationally and take into account any region-specific variations. 

Not only can this research and engagement process encourage greater buy-in across the business, it can also help to demonstrate the strategic role treasury can play within a company. It is undeniable that effective and efficient cash management has become a higher profile issue for boards since the financial crisis. By undertaking detailed preparation before a new RFP, treasurers can go beyond execution and demonstrate how they can actively serve the strategic needs of the business. 

Leveraging Your Existing Relationships

The good news is that treasurers do not need to go through this preparation process alone. Where companies are truly using RFPs as a way to gather ideas about best practice and new solutions, bank providers that work as genuine business partners will be happy to have an open discussion that helps treasurers define their long term objectives. This dialogue should include how the bank can provide tailored solutions and collaborate throughout the transformation process. 

Instead of issuing an RFP document as an initial step, consider first holding a whiteboard session with banks with which you have existing relationships or which have been recommended. This is one way of ascertaining their capabilities and know-how and building relationships in a way that a request for information (RFI) may not. 

Being face-to-face with experienced practitioners is an excellent way of exploring complex ideas and concepts, since question and answer (Q&A) responses and slide decks can only provide limited and relatively static information. Use this process to obtain feedback on how to approach strategic issues and guide the questions to ask in the planning process and formal RFP procedure. It will also help you to learn about solutions that have worked for other firms in similar situations.  

The RFP process should aim to reduce the instances of not considering all requirements, and a proactive workshop and comprehensive planning procedure will mitigate this risk. Within the RFP process, encourage your banks to be innovative and to demonstrate their competitive advantages. Listen with an open mind to what your banks propose, be open to changing direction if new solutions are suggested that will drive benefits and do not leave this discussion to the RFP document response alone. Additionally, bank providers should be able to help define an effective RFP template and provide samples of previous RFPs.  

Talking to industry peers can be a useful exercise when preparing for an RFP. There are many conferences and more intimate forums where cash managers can meet current and former treasurers and chief financial officers (CFOs), gather their insights and tips, and learn from any mistakes they may have made when undertaking the process in the past. 

The Benefits of Preparation

So what will such structured and detailed preparation mean for the RFP itself? When RFPs are written with full knowledge of what the long-term business needs are and a clear idea of how treasury and cash can support this, treasurers can provide fuller and more accurate information and ask more specific and relevant questions. This enables bank providers to offer more focused answers and suggest more pertinent strategic solutions. It also means responses can be judged against defined objectives, challenges and proposed solutions. 

The planning process ahead of a cash management RFP will help ensure that the document is not overly lengthy. Many of the best RFPs are no more than six pages long and ask simple questions that can be answered concisely. Shorter documents minimise the risk of fatigue from both parties, and make responses easier to analyse and come to a decision upon. 

By conducting sufficient strategic planning and preparation, treasurers can maximise the chance of receiving an end solution that optimises the cash function and allows it to better support and serve their business over time. The RFP is a useful enabler to delivering the end solution and determining an appropriate business partner, but it should be the end of a strategic planning and design process. Do not be a slave to the document itself. 



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