Wednesday, February 20, 2008

The RFP is Dead! Long Live the RFP!

There has been an interesting thread on the CM Professionals mailing list discussing the efficacy of an RFP. Many participants cited frustration with an RFP process that wastes people's time with unnecessary formality and the pretension of an even contest. I think everyone who has been in business has witnessed the act of an RFP being distributed after the contract has been awarded. The RFP process, as it is commonly practiced, suffers from four major flaws:

  • Buyers make their choices harder by forcing suppliers to submit identical proposals. I hate the expression "comparing apples to apples." What if you would prefer an orange? You want the vendor to show their individuality.
  • Vendors are suspicious of the RFP process and try to limit their exposure by expending energy qualifying the deal and their chances rather than investing in their proposal. You don't get anything but canned demos and copy-paste responses until you have reached a short list.
  • Companies with good products are too busy to respond to blind, widely distributed RFPs. The issuer of these RFPs tend to be flooded by responses from marginal companies with struggling products.
  • The RFP process is, by nature, adversarial and not a good way to start a partnership. Imagine finding a spouse with an RFP.

That said, you need some kind of process to keep you from falling in love with the first pretty user interface you see. There are some good aspects of an RFP that are worth keeping. You need some kind of document that communicates your requirements and your selection process. It is important that all the candidates have the same baseline information to tailor their sales process. My process for selecting a CMS uses an RFP in this way. I don't send an RFP to more than three vendors that I think are a good match for the requirements. I am sure to communicate this fact to the candidates. Vendors that have worked with me before know that if I contact them, they should jump right to the short list stage of their sales process when victory is in sight.

While the RFP contains the baseline, vendors should be invited to ask questions to help them produce more compelling and tailored proposals. Their ability to ask the right questions (and actually listen to the answers) is a differentiator. I want them to understand as much as they can about my client so they can put together a great proposal.

The required written response to an RFP should be lean. Less time invested in the written response means that the vendor can put more work into preparing a customized demo that will resonate with the audience. The goal is not for the client to lock themselves in a room and read proposals. You want to engage with the vendor. If you have been selective about who is participating, you can spend the time with each vendor that you are evaluating and get to know each other.

While the RFP itself is not dead, the old RFP process has certainly outlived its use. The RFP should not be a restrictive conduit for communication. It should be a starting point for a dialog. The RFP should not be an open call for the market to stand forward and identify itself. The issuer of an RFP should already understand the market and be selective as to who it invites.

Software selection should be an active process, not a passive one. It takes investment and education from both sides to meet in the middle.