To RFP or Not to RFP, That is the Question (Too Seldom Asked)
The RFP process can be time-consuming and expensive. Drafting, distributing, reviewing, scoring, and evaluating responses requires the attention of numerous company resources. Those commitments cost money. And your pain doesn’t end after awarding the work to a successful bidder. New team members must then get involved to negotiate the contract terms, assist with implementation and deployment, set up billing and invoicing protocols, facilitate training, perform User Acceptance Testing (UAT), oversee compliance with established Key Performance Indicators (KPIs), track delivery on Service Level Agreements (SLAs), and so forth.
When to Forgo the RFP
RFPs should be used when a project is sufficiently complex, requires a great deal of technical information, solicits hard data for analysis and comparison, and thereby warrants a formal proposal from a supplier. Oh yeah, they should also be used only when you really need to compare responses and vendors objectively. Don’t send out an RFP because you think it’s easier or the “right thing to do for appearances” or “good form.” If you know beyond reasonable doubt which vendor(s) you’re likely to select from the onset, don’t run everyone else through your gauntlet. In this case, invite your identified prospects to present their solutions.
By way of example, if you are trying to decide between two known and previously identified Master Vendors, a Vendor Neutral MSP, and you also desire a Vendor Management System (VMS), schedule these folks to demonstrate their capabilities in a presentation. See how well the technology partners play with the service providers, if applicable. Assess how each vendor tailors its solutions to your specific objectives and culture. The meeting can be online or in person, but never rely on a conference call. You need some form of visibility -- a means by which to scrutinize the interpersonal interactions. Gauge the body language and confidence of the presenters, especially in response to questions. A video hangout is perfectly acceptable, but you need to judge vendors by more than their words.
After that, invite a formal proposal for a bid. We call that a Request for Quote (RFQ). And honestly, that’s all an RFQ should be. Don’t stuff it with RFP questions. We’re not going down that road in this instance, remember? We’re talking pricing here. You’ve seen everything else you need to see.
When to Use RFPs
Epiq’s Glenn Wheaton contributes this insight:
“RFPs are helpful when supplier creativity and innovative approaches to problems are needed. It is important to remember that the RFP process can take a significant amount of time to complete and could result in delays to the start of the project. Therefore, it only makes sense to use this when the benefits from obtaining supplier proposals are greater than the extra time it takes to prepare the RFP and to manage the RFP process.”
When the project and the anticipated sales cycle take on complexities that extend beyond the scope of a traditional “let’s do lunch” approach, the RFP process makes a good deal of sense. With a proposal, you receive enhanced visibility into the bidder’s key offerings and core competencies, relatively firm pricing models, comprehensive answers to crucial questions, and a robust document that lends itself to more in-depth analysis by your stakeholders. Always approach the RFP’s creation with the intent of including its content as an appendix to a Master Services Agreement (MSA) or Statement of Work (SOW). You should never allow bidders to self-certify their claims anyway (more on that later). Let them know this is a serious and binding process, and that you are demanding proof.
Things to Avoid
The RFP process falls apart quickly when offerors use it too frequently, unnecessarily, or exclusively as a sales tool. As often as bidders miss the point with a proposal, offerors miss the point when crafting their RFPs. Avoid using an overly complicated RFP process to address simple questions that could have been answered succinctly and directly through a traditional sales meeting. Ultimately, you run the risk of alienating prospective bidders who, perceiving your overreliance on unnecessary paperwork and bureaucracy, decline to participate. Though not realizing it, you may be harming your chances of finding the perfect vendor. However, if you operate in a heavily regulated environment or in the public sector, where RFPs are mandated, you must still keep your questions relevant, direct, and targeted to the program. If you opt to exploit this process as a broader fishing expedition, you’re less likely to lure fish to your hook. And those that bite will probably be thrown back soon enough.
2014. Licensed under a Creative Commons Attribution-NonCommercial 3.0 Unported License.
