As we stated at the beginning of this series, an RFP creates a clear historical reference to what a client and a vendor thought was needed at a point in time. Since the investment may be put on hold and then have to be re-started at a later date in time, an RFP provides a viable means of going back to the key vendors without losing too much time or money. An RFP, combined with a detailed statement of work, provides a clearer way to hold client and vendor staff accountable for the original goal.
There are a lot of permanent IT artifacts in IT. For instance, we spend a great deal of time standardizing approaches to software development and IT operations in order to be able to support and maintain the integrity of our work for years to come.
Nevertheless, many IT professionals look at RFPs as a one-time artifact. However, just as you stop and start software development, firms stop and start capital investments or start over when they lose confidence in the winning vendor.
We recommend paying attention to three important qualities that have to be included in an RFP to manage that start and stop behavior.
1. Create traceability of requirements to benefits in your RFP
Every RFP with a significant ROI should have a business case with details, line-by-line, requirement-by-requirement, that illustrate the marginal benefit of that business element.
Those details are captured in a spreadsheet that ties back to the business case. If you`ve already issued a RFI (see our last step article), your focus on this ‘requirements spreadsheet` is on the features and risks of the specific business problem or opportunity that this RFP will solve.
You`ve moved beyond what should be in a standard insurance solution to what needs to be in your unique value proposition to policyholders and agents.
2. Standardize the parts of your RFP that reflect how your business operates
Yes, you can have a consultant do that for you each and every time you issue an RFP. However, that`s more expensive and means every RFP managed by different outside experts is unique. In addition, you`re paying for work that you generally don`t need outside help to entirely originate. The terms we`re addressing are items like payment, intellectual property, the standard description of how your firm operates, and so on.
We do feel that it is good to adopt consultant scoring methodologies, RFI feature templates and setting up your RFP to reflect what is commercially available without a lot of customization. Your consultants and advisors should have more diverse and current information than you have on these topics.
3. Define your project as phases that build on each other and issue an RFP that reflects that approach
Long programs are the cause of many balance sheet write-offs. Staff changes, business priorities shift, and the vendor selected may move their focus away from the investment you made in the total solution.
Frankly, in today`s vendor environment, companies are being acquired all the time and that almost always leads to some level of disruption. It may seem more cost-effective to purchase it up front when you have negotiating power, but you can create that same benefit and additional flexibility if you break the acquisition into logical chunks that create value as they are implemented.
Managing these phases is yet another reason to have a standardized approach in your RFP that is tracked back to objectives. It`s less expensive and more agile to re-engage vendors when this type of RFP is the foundational ‘stake in the ground` that represents your firm`s consensus.
Russ Bostick and Donn Vucovich are the managing partners of MVP Advisory Group, a management consulting firm focused on developing and executing superior strategies for business and IT.