Spoiler alert: It’s not. Despite many pundits’ posts and rumors to the contrary, the request for proposal is alive and well. But if the RFP lives on, why have so many obituaries been written for it? I have seen several articles over the last decade that have encouraged or predicted the end of RFPs. Some may have been wishful thinking after going through another grueling round of soliciting or responding to one, but most who advocate the RFP’s dismissal do so after seeing the abuses of the RFP.
In my experience, some of the failings of the RFP have been clear:
Some vendors and service providers don’t respond. 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. These may be great prospects who have decided to focus their resources on their customers rather than costly RFP exercises or they are busy with referral business and chose not to respond. You may have to adapt your RFP process and not be rigid in its application if you want to determine if one of these companies is the right partner for you.
The RFP doesn’t always distinguish between a legitimate offering and showmanship. More than once I have seen the situation where an investment company selected a product based on a rigorous RFP but once the selected package was painfully and expensively implemented it became clear that the vendor had exaggerated the system’s capabilities. The vendor had promised everything and provided impressive software demonstrations during the RFP review, but did not deliver in the real world. This leads to another costly effort to change out the failed software or significant effort to work around its failing. A proof of concept with the initial winner could have helped reveal the truth instead of counting on the RFP to make the final decision.
The RFP should not be used to force a false competition between the preferred vendor and hapless contender. If a company already has a strong sense of a preferred vendor or process to pursue, the RFP can delay forward progress. Again, engaging the preferred partner in a proof of concept is the better way to go.
The RFP should focus on core requirements and key differentiating functions, not long wish lists of everything one has ever wanted or ever might want. RFPs do require a significant level of detail, but they must focus on core needs so that a mediocre package with a broad set of functions doesn’t beat out a simpler package that really meets core needs well.
The RFP is not well suited for starting or ending a procurement process. Selection should start with soliciting advice from peer companies, industry news, and trusted consulting partners. If you’re unfamiliar with the tools available and vendor landscape, a high-level request for information (RFI) can narrow the field. After these steps and the issuance of a RFP, ideally a proof of concept should complete the process. Most legitimate complaints about RFPs come from trying to force them to do everything in an involved process when they should fulfill one specific role.
So, with all these problems with RFPs, why not join the chorus who wish for the demise of the RFP? Simply put, if used correctly, the RFP still has a proper place and is a viable tool in the procurement process.
If your initial analysis and your current architecture doesn’t confirm which way you should go, the RFP can be extremely useful in learning more about your potential partners and working towards the right solution. Just make sure to avoid the pitfalls listed above or you might find yourself jumping on the bandwagon to banish RFPs.