Surviving the RFP Game

Transcription

1 Surviving the RFP Game by Mary Hegarty Originally Published by Xploration

2 NEPS, LLC Surviving the RFP Game I have an idea for a new reality show: Lock a bunch of vendors in a room, give them two hours to answer an RFP, and watch the mayhem ensue. The vendor who makes it out alive wins the bid. I d call it The RFP Wars. Or better yet, The Cringe Factor. Let s face it, most people cringe or worse when faced with the prospect of initiating or responding to a major Request for Proposal (RFP). The RFP process doesn t have to be a cause for undue stress. Done right, RFPs can be a valuable learning experience for both the buyer and the supplier even if you ultimately get voted off the island. Another parallel with the reality TV angle is that it is important to make friends, influence people, take the right tools and skills into the game and of course, to play by the rules. The prospective buyer establishes the rules in writing via Letters of Interest (LOI), Requests for Information (RFI), or the RFP itself. An RFI is a tool used to gather information about a specific vendor s products and/or services or a category of product or service. It is not a request to bid, but rather a way to narrow the field of vendors or to gather information necessary for the RFP. If you don t have time for an RFI, or have already identified your field of potential suppliers, consider an LOI mailing, sometimes referred to as an Intent to Bid solicitation. An LOI should be short and to the point. Clearly state the nonnegotiables, the timeframes, and any other important requirements, such as volume, scalability, or service level agreements for the product or service sought. The LOI should require a response by a stated date. If the supplier does not respond, do not send the RFP. An RFP is used as a basis for contract negotiations and is a more involved process than either the LOI or RFI. Companies often use both an RFI and RFP process the RFI to get general information and help establish a healthy list of candidates for the RFP, and the RFP to choose the right supplier. This article will focus on the making of a quality RFP. Setting Goals A cross-functional team is necessary to establish goals, define requirements, and facilitate buy-in for the final decision. Make sure that each functional area that will be impacted by the outcome of the RFP is represented on the project team. Include the legal department, as RFP responses will be the framework for your contract with the selected supplier. Both the suppliers and the project team may be evaluated on the success of the RFP, so establish clear goals and measurement criteria 1

3 up front. This includes criteria for the suppliers, measurable results for the implemented solution, and goals for the RFP process itself. The RFP process should have a defined budget, timeline, and process and should be treated like any other mission-critical project. You will need a project manager who can handle internal and external resources equally well. Choosing the Suppliers There may not be a clearly defined category for the solution you are seeking, so you may need to pursue several avenues to establish your list of vendors. Ask colleagues and industry representatives for vendor recommendations and appropriate terminology. Make use of association web sites for your industry and Internet search engines like Google. Don t send out the RFP to everyone. Ideally, you want to identify the full range of available suppliers early in the process, and then narrow it down through direct research or an RFI process before sending out the RFP. You want enough suppliers bidding to give you bargaining power but not so many that the RFP process costs a fortune. When structuring the RFP, think about the person trying to answer it and try to make it easier for them. If you play nice, you will make it easer on yourself as well. Analysis & Documentation The effort you spend defining and documenting your requirements is the most critical part of the RFP process. Review the workflow and requirements for each functional area and document how they may change with a new product or system. Gather the most current supporting documentation and samples. Think about future requirements that may have relevance to the RFP. If you are making major changes to a legacy process or purchasing a product for which there is no existing knowledge on your team, either get training or engage a consultant to assist your team. If you don t know what is possible, you won t ask the right questions and you won t get the right answers. Circulate the documentation and review for accuracy. Once the requirements are approved, you will use this information to shape the narratives, questions, and evaluation criteria for the RFP. Make sure to differentiate between areas that can benefit from process improvements and those that must stay as they are. The RFP Document When structuring the RFP, think about the person trying to answer it and try to make it easier for them. If you play nice, you will make it easier for 2

4 yourself as well. Begin by structuring the document in a logical manner. Don t send out the RFP to everyone. Ideally, you want to identify the full range of available suppliers early in the process, and then narrow it down through direct research or an RFI process before sending out the RFP. You want enough suppliers bidding to give you a bargaining power but not so many that the RFP process costs a fortune. Some things to consider are: Put all administrative stuff in one section and avoid repetition. Include the rules for response, timeline, contact information, etc. State your evaluation criteria clearly, and frame questions in a manner that will elicit measurable answers. If something is non-negotiable, highlight it clearly up front. If your RFP encompasses more than one function, break out the workflow and questions separately for each area Use appendices for flowcharts, diagrams, hardcopy samples, etc. and refer to them in the narratives. Don t incorporate every detail in the body of the RFP. Ask clear, measurable questions, but also craft an essay section. Give suppliers leeway to be creative. Insist that marketing material be included in an appendix, not in the responses. Consider creating a pricing matrix so that each supplier provides its final pricing in the same type of apples-to-apples manner. Response Evaluation & Selection There are many things to keep you busy while suppliers are working on their responses. You will need to schedule time for supplier questions. If the RFP is complex, you may want to schedule two dates since more questions can arise once the response is underway. Remember, you want the suppliers to deliver an informed response. Compile all the questions and answers (except those deemed proprietary in nature) and send them out to all suppliers. Set up a conference call with each supplier to talk through the questions. Strive to maintain a level playing field even if you feel that a particular vendor may be the front-runner. Decide ahead of time if you will take phone calls outside of the documented process. While your evaluation criteria should be established as part of the RFP, now is the time to organize them for deployment on incoming proposals. Create a spreadsheet listing criteria to be used as the project team reads and rates the responses. Each criteria should be weighted, with the must haves weighted the highest. Break the criteria into the same sections as the RFP to make it easier to rate for the reviewer. Set a schedule of meeting times with the project team to review each response a first time. Depending on the number of suppliers, you may want to set up a first round of reviews, with the goal of eliminating the weakest. If there is a clear disparity between the highest and lowest rated response, it is an indicator that you can safely eliminate. Have the project team come up with a list of questions for the suppliers. Let team members concentrate on their areas of expertise and dig deep into those areas for questions. After the call, sit down and go through the evaluation sheet again. You may be able to narrow 3

5 the field further by checking references. Organize the reference process so that you can be fast and efficient. Focus on areas of concern relative to a particular vendor. Ask measurable overall questions for the remaining issues such as implementation, service, support, and delivery of promised capabilities. Make sure that the reference has an implementation similar to the one you envision. If the references are not appropriate, ask for different ones. Check all the references you are given. Unless the responses are very close, limit presentations to three or less finalists. Give clear instructions on what you want to see in the presentation. If there are particular areas of concern, state them clearly and fairly and offer a chance to respond. Specify a time limit and stick to it. Encourage or require the supplier to invite those who would actually work on your project. Don t confuse a great sales person with a great solution. Get out the evaluation sheet and rate the presentations immediately after each session. If a site visit or tour of an installed customer facility is part of your RFP, make the most of it. Allow plenty of time for a tour, presentation of the workflow, and meetings with the people who will support your requirements. Review the agenda in advance of the visit to ensure that your needs will be met. Insist on a working session, not a sales pitch. Go through the actual implementation project plan. Get out that evaluation sheet and rate the suppliers again. By now, you should be very close to a decision. You have worked with suppliers through a long process, not unlike an actual project. If you have rated all of the proposals, presentations, references, and site visits against your weighted evaluation criteria, you should have a measurable basis for a decision. If so, you should feel comfortable with turning the rest of the process over to legal to frame the contract. But sometimes the promises in the proposal don t withstand the scrutiny of the contract negotiation, so keep a second vendor in mind. Remember to notify suppliers when a decision has been made and thank them for the time they took to respond. The RFP process isn t over until you successfully complete the implementation. If you have established a good working relationship with the chosen supplier, the job will be much easier. But even with a great RFP process there are a variety of situations that can cause you to change suppliers. Just like a TV show, it s not over until the credits roll and there could be a sequel. Mary Hegarty has over 25 years experience in project and program management, document and content management, and print strategy development and implementation, primarily for the insurance, financial and service bureau markets. Mary manages the delivery of NEPS products and services associated with Communications Management group at NEPS, which encompasses Consulting Services, Information Design, the CMX Content Integration Platform, and the SaaS hosted environments. 4