NET(net), Inc.


Why RFP’s Suck for Both Sides by jigordon
July 14, 2009, 9:32 pm
Filed under: negotiation, Outsourcing, process

RFPs suck for both sides of the equation. Bidders hate responding to them and the requesting organization hates reviewing them.

Why?

Well, because they’re time consuming… and each side believes that the other side is: 1) Only spending enough time to barely glean the financials off the top; 2) Inserting default language from prior RFPs which may or may not have relevance to the current project; and 3) Only doing this to appease some misguided sense of a “strategic sourcing process”.  These assumptions are all 100% true:

  1. Using RFPs correctly can be a valuable part of a strategic sourcing process.  But generally speaking, they’re hastily assembled, from a template, and sent out without consideration as to who will get them.
  2. Responses almost always arrive at the last possible moment – not because they’re the product of countless hours of taxing effort and meticulous drafting – but because they’re tossed in a drawer and forgotten until the last possible moment.
  3. Reviews ARE hastily done… with receiving “teams” designated to score RFPs by section but having no real training as to how to do it properly (usually because they didn’t spend enough time working on a requirements document for the project to begin with).

How do I know this?  Well, it’s easy, really.  After a decade of using them, I long ago learned to monitor the Word document’s properties for the RFP itself.  It’s where I’ve asked responses to come electronically, so I can see EXACTLY how much time has been spent editing the document.  Do I really think that it only takes an hour of editing to respond to one?  Ha.  Only if it’s a copy-paste job.

But I’d wondered what bidders were doing to monitor our review.  Now I know.  And I think it’s an excellent smack-down.  Reviewers SHOULD be held accountable for the efforts they ask others to expend on their behalf.  As time-consuming processes go, you should at least be willing to put in the effort to review something that you’ve asked someone else to create.  Oh, and by all means should you have LIMITED the number of potential respondents long before sending out the document package.

By the way, all of the food, drink and alcohol provided by these various agencies sure smacks of impropriety to me.  NEVER send a reviewing organization ANYTHING until after the deal has been signed… and then you’d better comply with that organization’s gift policy or you should expect to get it back.

 

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Jeff:

I’ve been on the receiving end of RFP’s for a long time, at multiple organizations. And I have to say that looking at the editing time of the document we return as an indication of how long we spent working on it would be wildly off base. The longest part of the entire process is usually in deciding the nature of the answer, not drafting it. No one actually does the hard work in the document that the customer sends; that’s where finished work product goes.

Take one particular issue, say a request for a particular service level metric that is different from our standard. That means a flurry of emails to IT, operations, and maybe finance, and follow-up discussions. Then, the designated sucker writes up a proposed response in email, everyoone says OK (requiring the DS to track down everyone who is travelling, but must sign off), and the DS pastes it in. That shows up as about 20 seconds of editing, representing 10 to 15 minutes effort from 2 to 10 people. And more like 30 minutes for the designated sucker. And because a lot of this time is making decisions about resources, relative commitments, product design, and the like, these are expensive resources.

The real reason that RFP’s all come in right at the deadline is how responding companies staff to them. Generally, companies hire a set number of people to respond to RFPs. As RFP’s come in, that team assigns them a size and a due date. They then use 100% of their time to respond to as many RFP’s as they can, with decisions about which ones drop out made according to the size of the deal. That almost always means that they are working on every response right up until the deadline.

And, really, isn’t it appropriate to respond to cut-and-paste boilerplate with cut-and-paste boilerplate? Questions like those asking us for a short description of our company history, or biographies of our executives, just shows that you haven’t read any of the information on our website.

But the worst is sending an agreement, and asking the vendor to redline any changes they have, when the agreement sent is not even remotely close to applying to the thing being bought. Examples: construction contracts for an IT buy, or a goods purchasing contract for a services deal. Given the level of attention that purchasing department gave to the initial RFP, we have to ask whether it would even notice if we just sent back our standard form contract in response?

The RFP we love to receive is one where:

1. The purchasing department has obviously worked closely with someone who knows something about the subject matter — maybe the incumbent, maybe a knowledgable user. We are always happy to provide the questions we think our existing customers should ask when it goes to RFP. Those questions will surely include some that play to our competitive strengths; but if we think something is a competitive strength, wouldn’t you want to know how other vendors stack up on that dimension?

2. The purchasing department has used some process to narrow the field before asking for a full submission — either direct research or through a short request for information. If you already know that there are some hard lines you are not willing to cross, a short RFI can eliminate a lot of contenders who are otherwise wasting their time in responding to a full RFP — and wasting your time in reading their full response.

3. The purchasing department has gone through its own form RFP to eliminate questions that are not needed, based on what it already knows.

When they do this, the purchasing department practically guarantees a good response from us, one that actually educates, rather than checking off boxes on a checklist.

Chris Lemens

Comment by Chris Lemens




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