by Ian Watt, Director, TPI
Issuing a request for proposal (RFP) and selecting a service provider partner is a big deal, especially for services that can materially affect the way — or even whether — you do business. You want the investment in time and focus to be worthwhile, resulting in the right services with the right partner at the right price.
When you issue an RFP, you’re signaling that you are willing to pay for certain services. Lots of service providers will be interested, especially in the payment part. You’re interested in the services part. A good RFP lets both parties align their interests.
Here are the TPI Top 5 guidelines for getting your RFP process started on the right foot:
1. Have a sober discussion about what you really want to buy — and be sure to include the business. Generalities in an RFP increase the price a service provider will bid, especially if you are asking for a fixed price. The rigor of writing down exactly what you want to buy will improve the RFP result and sharpen your own thinking. Deciding on scope is not something you can delegate down the organization. If the services are going to affect business operations, your discussions should include business operations.
2. Make a schedule and stick to it. From the moment you signal your intention to issue an RFP you are negotiating with your service providers. The single best way to remain in charge of the discussion is to set a schedule for the whole process and stick to it. Your providers will know that you are serious and organized. You will also drive a better response because they will be able to plan their internal staffing around dates they know will be honored.
3. Provide the richest set of data possible. In this area, like no other, you get what you pay for. If you develop solid data to go with your RFP, you have a right to expect high quality responses in return. Reliable data also provides insurance against unpleasant discussions with your service provider after contract signature (when your leverage is roughly zero). You don’t want to hear: “When we bid that price, we assumed A, B, and C; but now we see D, E, and F, so our price will double …”
4. Be willing and able to walk away from bidders who don’t play by the rules. When the prize has been big enough, bidders have been known to walk around the RFP process, spread fear, uncertainty, and doubt among executives, and perhaps ask for “another bite” at the process if the first attempt was rejected. If they can’t work as a partner during the courtship phase, what chance do you have for a long-term relationship? Brief your executives ahead of time, and make sure you’re able to walk away if you have to.
5. Give yourself a structured decision process. If the RFP is a big deal, it should have players to match. Form an empowered team who will make decisions at pre-defined checkpoints (e.g., downselect, negotiations …). Involve the business, procurement, and legal counsel up front — not as a last minute check off. Above all, don’t allow “tourists” at the table. It should be clear from the beginning that nobody gets to swing into a meeting, offer criticism, and leave.
Remember the old story about the pig, the chicken, and bacon and eggs for breakfast? The hen is involved, but the pig is committed. Likewise, everyone on your team should be committed to the whole process.
TPI CIO Services experts can help you achieve your organizational goals through objective advice, knowledge of your industry and experience with arrangements from simple to complex.
Contact Ian Watt, Director, TPI, to learn more.