The RFP is History

And no one will miss it.

The Request for Proposal (RFP) has been a staple procurement process for many years. They are used as part of the formal bidding process to gather information from various providers (products, services, etc.) so the process is open, transparent and fair.

Unfortunately, writing an RFP is like walking to work stepping on nails. You have to meet with all of your stakeholders and listen to everything they can dream up. You have to take the piles of feedback and sort them into something resembling order and then you need to burn a seal of reality into it. Then you have to polish it and send it out to a group of vendors who about are as enthusiastic as a bunch of cats asked to swim across a river for their dinner.

From the vendor side, an RFP is a different kind of nightmare. There are all sorts of rules. There are pages and pages and pages of data to go through. Then you need to push that pile of pages uphill internally just to get the go-ahead to assemble a big enough team to tackle Everest. Oh and it’s your butt on the line if you don’t get the win. Everyone will hate you and speak about it behind your back for months. “There goes Chad … he’s the one who lost the ArcLoft deal. How is he still employed here?”

Brian Wallace, founder and President of NowSourcing nails it. “The truth is, the RFP just doesn’t fit in with modern business operations.”

In 20 years I have stood on both sides of the dreaded RFP. As an IT Director at a major public institution, I was directly responsible for their creation, delivery, and management. As an Account Executive and Sales Director, I have also had to stare down the barrel of whether or not to respond. I have answered many of them spending long hours into the night wording the responses carefully.

So what have I learned?

RFPs suck. No one likes them and no one needs to use them.

I know. Those are fighting words. Many of us see the RFP like a trusted and faithful old friend. RFPs are outdated relics of the past. Like a battleship in an age of drones, they lumber along ineffectively. While many organizations continue to drop powder kegs into their long guns and fire RFPs out into the ocean hoping to score a hit others are innovating and seeing the future. I say park those battleships in a nice harbor and sell tickets to show how people used to do procurement. Not even huge purchases need them. Not even government procurement. Yes, I said it. Not even the government.

As Bjorn Molster at Alpha Solutions in Norway puts it “large organizations end up as victims of their own RFP processes (and best intentions) — choosing either the wrong partner, the wrong technology, the wrong approach or sometimes all of these combined.” So why are RFPs so bad? Let’s start with the costs of creating one, starting with time.

According to newmediacampaigns writing an rfp for a website is easy! There are just 15 simple steps. Yup. 15. For a new website. Good luck with your RFP for that new ERP system!

Let’s examine the experience of the issuer:

1. Collecting information. It takes hundreds of hours of peoples time to build an RFP. Let’s assume for a big-ticket item (1M+) you need to meet with 50 people to collect data. Each person requires 2–3 meetings of about an hour to communicate their needs. They come up with a list of 10 things they need. You now have a list of 500 things you need to understand, research and communicate on. You need to organize them, rank them and track their progress in the process. Ballpark is that you are spending 300 hours of staff time to collect your data. People forget how much salaried time costs. Assuming your staff is making a paltry $50 an hour you have spent 15K just collecting data.
2. Research and more research. “What do you think our key requirements are Bob? [directed at Bob who runs the risk assessment committee]? Bob looks important and answers that the risk assessment system needs to have realtime updates from the news and social media sent to first responders through an app. Cool idea! Lots of the things people ask for do not exist or are too expensive to create but unfortunately, at the start, they often appear reasonable. You cannot sit in a meeting and tell Bob that something he wants doesn’t exist or that it is too expensive. Bob might not appreciate that. You have to do a load of time-consuming research before you can determine its feasibility or you can drop it into the ever-expanding RFP and see what happens. So you save the 100 hours of time / 5K of salary expenses and you offload the work to responding vendors.
3. Project management costs. Writing an RFP is a project in itself. You have a swarm of scheduling, RFP related tasks, and a team of people who are writing it. Like the EDS Cat Herding commercial from the early 2000s you become the master change agent. even if you are not the originator of the need for the new solution you become the face of it. Project management is the evil twin of the sweet angel that sits on your shoulder and tells you how beautiful the future will be. It is the burning voice that yells you awake at night and tells you that you have to tell Bob and the committee your progress on researching his mobile risk assessment feature. It is the beast that sucks up almost all of your time for months with meetings that go nowhere and boxes and boxes full of bagels. Let’s add another 400 hours of time to get that done. 20K more on your budget. Cha-ching.
4. The other stuff. Travel, office supplies, phone calls, contractors, meetings and more meetings about things that are somehow related to the process like Jim in accounting who wants to know why you have spent $1000 on coffee, bagels, and donuts in a month. Add at least another 5K worth of stuff depending on the size of the RFP.

At the end of the days and days, the whole purpose of all of this activity was to determine needs and then find the best vendor to provide those needs. But have you really done that? Have you really tracked down the elusive perfect vendor/partner? Probably not. A number of awesome vendors have already run for the hills. But why?

As Mike Walker at Citisoft puts it “There is a real risk of missing an innovative solution or potential partner by forcing an exhaustive RFP. Some quality players have decided to opt-out.”

Let’s examine the perspective of the vendor:

1. Many vendors do not respond to “blind” RFPs. A blind RFP is an RFP that shows up without them knowing about it beforehand. They assume that another company is already column A and so they walk away. Ian Altman explains in his article for Forbes “you have as much chance of winning that deal after submitting a blind RFP as Mitt Romney had in beating Evander Holyfield in the charity bout on May 15” RFPs take time and energy to read and process. Vendors that are on top of their game often have enough business already so they can afford to be choosey. They will skim over the RFP and make a very quick determination if they want to submit. Unless you have made it really attractive you will lose them.
2. Even companies that do want to respond will have to decide if they have the resources to respond. Remember that although many companies have an RFP or proposal team, they are often swamped, overworked and behind schedule. A lot of RFP issuers think that everyone will be tripping over themselves to follow the process but sometimes it is a resourcing issue. At one large tech company, I worked for we implemented a rule that we would not reply to any blind RFPs simply because of our resourcing constraints. We were one of the top 3 providers in the global market.
3. Savvy Companies know that an RFP is not a commitment to buy. It looks like one but I have personally seen several RFP issuers make “no decision” after a lengthy and brutal process. They decide that the options are not good enough or they are too expensive and they leave every vendor that took the time and energy licking their financial wounds.
4. They are a formality. The RFP issuer wants to provide a veneer of transparency and openness but in reality, they are going to pick their existing provider via the seal of an open bid process. The only winner will be the existing provider barring some suicide hail mary provider that is willing to meet all of their needs for 50% of the price.
5. The RFP process will return to bite you again. Many organizations that abide by an RFP process will return with a new RFP when the contract renewal comes around. All over again you need to spend time and resources to prove that you deserve the business when you should have already done that from your years as their partner. Nope! They might be able to score a new deal or get a shiny new object. John Warrillow makes a great case for this in his article for Inc. He bluntly points out “Even if you win the work, the same rules that forced the company to tender the RFP in the first place will kick in again and force them to host another beauty contest next time, no matter how good a job your company does.”

As a result of this vendors are very anti-RFP at two key levels:

The Executive. Executive teams within vendors, in general, hate RFPs unless their company helped write them. Too many years of watching resources get sucked out the window responding to RFPs have made them very sour to the process. Many a young sales rep has been eaten for lunch for requesting resources to respond to an RFP. Executives feel that if you did not know the RFP was coming then you are not truly connected to the prospect and you should not respond to it. That effectively takes away the argument that RFPs are unbiased. If you tell a vendor that you are releasing an RFP and hint here is what the questions will be OR even worse what should I ask? What is the point in using one? It is a sham designed to mask your true intentions. Executives know this which is why they don’t want to spend resources on something they stand a good chance of losing. When you understand this point … why would you want to work with an executive team that is blind to those facts?

A New Boston Creatives study that found on average a vendor spends more than $5,000 before even winning the bid. Executives hate wasted money and time.

Account Representative. Sales reps love and hate RFPs. They suck up a huge amount of time and they carry huge risk but in general, they don’t have to do the grunt work. The sales engineers, the proposal team and the specialists in the company do all the work. All that said losing a high dollar RFP haunts your sleep especially if you are the runner up. Even if the team doesn’t blame you for the loss, the stench of failure lingers for quite some time. Sales reps, in general, want to avoid RFPs unless they have an inside track because they greatly increase visibility. Sales reps look at the opportunity cost of not getting the win after spending so much time AND the visibility of the failure. They know that time is the most valuable commodity in sales and where you spend it determines your success. Sales reps hate missed opportunities and severe meetings with executives.

Now that we have examined both parties … remind me again what is good about an RFP?

Okay fine … but what is the alternative to using an RFP?

There are a lot of systems that can better effectuate the process of vendor/solution selection. While your peers at another company are Fedexing a huge stack of papers around that no one wants to read you can be sealing the deal with the best vendor.

So what do you need to do?

1. Gather requirements in your PJs by using a requirements gathering platform like casecomplete. A system like this will help you easily collect the data you need from stakeholders, keep track of how that connects and enable you to explain in detail those requirements to your list of vendors.
2. Use a team collaboration platform like Slack or Microsoft Teams. Create a community in Slack designed around the purchase. Create sub-threads for each area of the purchase (features, technical, legal, etc.)
3. Use a task management platform like Monday.com or Trello to ensure that everyone can see what needs to be done, who needs to do it and how important it is.
4. Use a shared calendaring system like Calendly or Doodle to schedule stakeholder and follow-up vendor meetings.
5. Leverage social media listening tools like Brandwatch or Talkwalker to better understand large groups of users without needing to meet with them or survey them in person. Social listening tools can tell you what people are talking about and even things like sentiment analysis.
6. Use peer review sites (Trust Radius, G2Crowd, etc.) to understand capabilities of vendors, pricing and what customers say about them. Start free trials, etc. to examine functionality.
7. Use a vendor screening bot like Warmcall to screen prospective vendors using a bot that will ask them questions and rank their responses based on your key requirements or criteria. Because this is a much lighter approach to an RFI or RFP that is more convenient for vendors it will quickly sort an unlimited number of vendors based on your unique needs and match you with the best ones. The bot will also immediately schedule meetings on the spot. This is super convenient for you and it is a great experience for vendors. It is also a way to vet vendors to show them it will be worth their time if, in fact, you must deploy an RFP.

This process will save you hundreds of hours of time and it will ensure full participation from vendors. You will be able to assess vendors you have never even heard of before. You will also save your organization an enormous amount of time, money and stress.

So should I ever use an RFP?

There are still uses for an RFP … BUT … even if you are forced to use one there are tools that can make the experience better for you and the prospective vendors. I understand that processes take time to change but for the love of all that is holy in this world each of us needs to try. It’s time to anchor the RFP and hang some pretty flags on it. It’s a piece of history after all. Good luck!

Thanks for reading.

Phil Chatterton is the Co-founder and President at Warmcall, Inc. a screening bot company for hiring (warmcall.com). If you are interested in learning more about warmcall you can watch a quick video here.