Why Companies Are Doing Requests for Proposal (RFPs) All Wrong

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Posted by: briansittley Comments: 0 0 Post Date: May 3, 2018

An ERP software provider called Abas (abas-erp.com) recently released a paper called “Writing a Better RFP” intended to advise companies on what’s wrong with most of their RFP processes, and how they might do better.  While we have no affiliation or relationship with Abas, we thought their advice was very wise and up-to-date in tackling the old paradigm for software selection.
Abas points out two flaws in most companies’ current Request for Proposal strategies:

  1. Putting excessive internal resources into filling out unnecessarily long RFP templates, and
  2. Paying third-party RFP specialists to create complex RFPs.

They make the point that these methods do little more than to make the process very expensive and bog down the selection process – and are of little help in selecting a vendor anyway.
The article’s author goes on to point out that today there are a great many common core functionalities across ERP packages.  Your goal should be to “reveal areas of competitive differentiation between potential vendors.”
So skip the generic questions they advise (which virtually all of today’s modern packages can handle) and cut to the questions that really matter to your company’s work, and how you run the business. They give the example of: “Is the ERP system capable of recommending an available-to-promise date or hard allocating inventory at order entry?”  You get the idea: ask the questions that are truly your choke points, or that relate to your competitive differentiators, to understand how the solution could improve your workflows.
Also, they advise: ask questions that seek to determine whether the vendor has experience and domain knowledge in your particular industry.  In this regard, all systems – and all vendors – are definitely not the same.  You want not just software fit, you want implementation expertise.
Abas points out – and we could not agree more – that RFPs are far too lengthy, and we too often find them filled with hundreds of largely irrelevant, or at least ‘generic’ questions that waste everyone’s time, and do nothing to help you establish clear winners or losers.  They further advise to give more ‘weight’ to the more important questions (to your business) and to the perceived expertise of your provider, and less weight to many of the generic components that most any system can handle, so you’re weighing in a manner that’s relevant to your most important needs.
What’s the right number of questions?  Believe it or not, Abas suggests (and again, biased or not – we prefer to think of it as ‘experienced’ – we couldn’t agree more…) that about 10 to 15, industry-specific  questions will tell you all you need to know to differentiate among vendors. 
Your RFP should be proactive, not reactive.  It should ask the questions most critical to the issues your business faces – and not just short-term, but down the road as well.  What emerging technologies might cause you disruption?  How well will your solution scale, or morph to fit your possible future needs?  Can it be changed and modified easily, and by whom?  All good food for thought.
And finally, ask yourself: Are you looking at cost, or value?  Sure, cost is important and the bottom line matters.  But focusing on cost alone is short-sighted.  Look at the bigger picture: total cost of ownership (TCO), along with the value proposition to your business over the next ten years, not the next two or three.

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