Drive Successful Sourcing Outcomes With a Robust RFP Process

Leverage your vendor sourcing process to get better results.

EXECUTIVE BRIEF

Drive Successful Sourcing Outcomes with a Robust RFP Process

Lack of RFP Process Causes... Stress Confusion Frustration Directionless Exhaustion Uncertainty Disappointment	Solution: RFP Process			Best value solutions Right-sized solutions Competitive Negotiations Better requirements that feed negotiations Internal alignment on requirements and solutions Vendor Management Governance Plan
	Requirements Risk Legal Support Security Technical Commercial Operational Vendor Management Governance	Templates, Tools, Governance RFP Template Your Contracts RFP Procedures Pricing Template Evaluation Guide Evaluation Matrix	Vendor Management Scorecards Classification Business Review Meetings Key Performance Indicators Contract Management Satisfaction Survey

Analyst Perspective

Consequences of a bad RFP

“A bad request for proposal (RFP) is the gift that keeps on taking – your time, your resources, your energy, and your ability to accomplish your goal. A bad RFP is ineffective and incomplete, it creates more questions than it answers, and, perhaps most importantly, it does not meet your organization’s expectations.”

Steven Jeffery
Principal Research Director, Vendor Management
Co-Author: The Art of Creating a Quality RFP
Info-Tech Research Group

Executive Summary

Your Challenge

• Most IT organizations are absent of standard RFP templates, tools, and processes.
• Many RFPs lack sufficient requirements from across the business (Legal, Finance, Security, Risk, Procurement, VMO).
• Most RFP team members are not adequately trained on RFP best practices.
• Most IT departments underestimate the amount of time required to perform an effective RFP.
• An ad hoc sourcing process is a common recipe for vendor performance failure.

Common Obstacles

• Lack of time
• Lack of resources
• Right team members not engaged
• Poorly defined requirements
• Too difficult to change supplier
• Lack of a process
• Lack of adequate tools/processes
• Lack of a vendor communications plan that includes all business stakeholders.
• Lack of consensus as to what the ideal result should look like.

Info-Tech’s Approach

• Establish a repeatable, consistent RFP process that maintains negotiation leverage and includes all key components.
• Create reusable templates to expedite the RFP evaluation and selection process.
• Maximize the competition by creating an equal and level playing field that encourages all the vendors to respond to your RFP.
• Create a process that is clear and understandable for both the business unit and the vendor to follow.
• Include Vendor Management concepts in the process.

Info-Tech Insight

A well planned and executed sourcing strategy that focuses on solid requirements, evaluation criteria, and vendor management will improve vendor performance.

Executive Summary

Your Challenge

Your challenge is to determine the best sourcing tool to obtain vendor information on capabilities, solution(s), pricing and contracting: RFI, RFP, eRFX.

Depending on your organization’s knowledge of the market, your available funding, and where you are in the sourcing process, there are several approaches to getting the information you need.

An additional challenge is to answer the question “What is the purpose of our RFX?”

If you do not have in-depth knowledge of the market, available solutions, and viable vendors, you may want to perform an RFI to provide available market information to guide your RFP strategy.

If you have defined requirements, approved funding, and enough time, you can issue a detailed, concise RFP.

If you have “the basics” about the solution to be acquired and are on a tight timeframe, an “enhanced RFI” may fit your needs.

This blueprint will provide you with the tools and processes and insights to affect the best possible outcome.

Executive Summary

Common Obstacles

• Lack of process/tools
• Lack of input from stakeholders
• Stakeholders circumventing the process to vendors
• Vendors circumventing the process to key stakeholders
• Lack of clear, concise, and thoroughly articulated requirements
• Waiting until the vendor is selected to start contract negotiations
• Waiting until the RFP responses are back to consider vendor management requirements
• Lack of clear communication strategy to the vendor community that the team adheres to

Many organizations underestimate the time commitment for an RFP

Why Vendors Don’t Like RFPs

Negative effects on your organization from a lack of RFP process

Stress, because roles and responsibilities aren’t clearly defined and communication is haphazard, resulting in strained relationships. Confusion, because you don’t know what the expected or desired results are. Directionless, because you don’t know where the team is going. Uncertainty, with many questions of your own and many more from other team members. Frustration, because of all the questions the vendors ask as a result of unclear or incomplete requirements. Exhaustion, because reviewing RFP responses of insufficient quality is tedious. Disappointment in the results your company realizes. (Source: The Art of Creating a Quality RFP)

Info-Tech’s approach

Develop an inclusive and thorough approach to the RFP Process

The Info-Tech difference:

1. The secret to managing an RFP is to make it as manageable and as thorough as possible. The RFP process should be like any other aspect of business – by developing a standard process. With a process in place, you are better able to handle whatever comes your way, because you know the steps you need to follow to produce a top-notch RFP.
2. The business then identifies the need for more information about a product/service or determines that a purchase is required.
3. A team of stakeholders from each area impacted gather all business, technical, legal, and risk requirements. What are the expectations of the vendor relationship post-RFP? How will the vendors be evaluated?
4. Based on the predetermined requirements, either an RFI or an RFP is issued to vendors with a predetermined due date.

Insight Summary

Overarching insight

Without a well defined, consistent RFP process, with input from all key stakeholders, the organization will not achieve the best possible results from its sourcing efforts.

Phase 1 insight

Vendors are choosing to not respond to RFPs due to their length and lack of complete requirements.

Phase 2 insight

Be clear and concise in stating your requirements and include, in addition to IT requirements, procurement, security, legal, and risk requirements.

Phase 3 insight

Consider adding vendor management requirements to manage the ongoing relationship post contract.

Tactical insight

Consider the RFP Evaluation Process as you draft the RFP, including weighting the RFP components. Don’t underestimate the level of effort required to effectively evaluate responses – write the RFP with this in mind.

Tactical insight

Provide strict, prescriptive instructions detailing how the vendor should submit their responses. Controlling vendor responses will increase your team’s efficiency in evaluations while providing ease of reference responses across multiple vendors.

Key deliverables

Each step of this blueprint is accompanied by supporting deliverables to help you accomplish your goals:

Key deliverables: Info-Tech provides you with the tools you need to go to market in the most efficient manner possible, with guidance on how to achieve your goals.	Long-Form RFP Template For when you have complete requirements and time to develop a thorough RFP.		Short-Form RFP Template When the requirements are not as extensive, time is short, and you are familiar with the market.
	Lean RFP Template When you have limited time and some knowledge of the market and wish to include only a few vendors.		Excel-Form RFP Template When there are many requirements, many options, multiple vendors, and a broad evaluation team.

Blueprint benefits

Info-Tech offers various levels of support to best suit your needs

Diagnostics and consistent frameworks used throughout all four options

Guided Implementation

A Guided Implementation (GI) is a series of calls with an Info-Tech analyst to help implement our best practices in your organization.

A typical GI is seven to twelve calls over the course of four to six months.

What does a typical GI on this topic look like?

Workshop Overview

Contact your account representative for more information.
workshops@infotech.com1-888-670-8889

Phase 1

Identify Need

Steps 1.1 Establish the need to either purchase goods/services (RFP) or acquire additional information from the market (RFI).

This phase involves the following participants:

• Business stakeholders
• IT
• Sourcing/Procurement
• Finance

Identify the need based on business requirements, changing technology, increasing vendor costs, expiring contracts, and changing regulatory requirements.

Outcomes of this phase

Agreement on the need to go to market to make a purchase (RFP) or to acquire additional information (RFI) along with a high-level agreement on requirements, rough schedule (is there time to do a full blown RFP or are you time constrained, which may result in an eRFP) and the RFP team is identified.

Identify the Need for Your RFP

An RFP is issued to the market when you are certain that you intend to purchase a product/service and have identified an adequate vendor base from which to choose as a result of: IT Strategy Changes in technology Marketplace assessment Contract expiration/renewal Changes in regulatory requirements Changes in the business’ requirements An RFI is issued to the market when you are uncertain as to available technologies or supplier capabilities and need budgetary costs for planning purposes. Be sure to choose the right RFx tool for your situation!

Phase 2

Define Your RFP Requirements

Steps 2.1 Define and classify the technical, business, financial, legal, and support and security requirements for your business.

This phase involves the following participants:

• IT
• Legal
• Finance
• Risk management
• Sourcing/Procurement
• Business stakeholders

Outcomes of this phase

A detailed list of required business, technical, legal and procurement requirements classified as to absolute need(s), bargaining and concession need(s), and “nice to haves.”

Define Business Requirements

Define RFP Requirements

Key things to consider when defining requirements

• Must be inclusive of the needs of all stakeholders: business, technical, financial, and legal
• Strive for clarity and completeness in each area of consideration.
• Begin defining your “absolute,” “bargaining,” “concession,” and ‘”dropped/out of scope” requirements to streamline the evaluation process.
• Keep the requirements identified as “absolute” to a minimum, because vendors that do not meet absolute requirements will be removed from consideration.
• Do you have a standard contract that can be included or do you want to review the vendor’s contract?
• Don’t forget Data Security!
• Begin defining your vendor selection criteria.
• What do you want the end result to look like?
• How will you manage the selected vendor after the contract? Include key VM requirements.
• Defining requirements can’t be rushed or you’ll find yourself answering many questions, which may create confusion.
• Collect all your current spend and budget considerations regarding the needed product(s) and service(s).

“Concentrate on the needs of the organization and not the wants of the individuals when creating requirements to avoid scope creep.” (Donna Glidden, ITRG Research Director)

Leverage the “ABCD” approach found in our Prepare for Negotiations More Effectively blueprint:
https://www.infotech.com/research/ss/prepare-for-negotiations-more-effectively