Hint: Don’t. Read this instead, and then go demand a promotion for launching a killer app while saving your company [at least] 6 figures.
Before we begin, head to Google and search “why do technology RFPs exist”.
Back? So let me ask — how many results were positive? How many heralded the dawn of the RFP, forever improving the way vendors are solicited, retained and put to task? Yeah … not that many. Instead, most wielded daggers at how they’re insulted to receive them or even refuse them outright. How the entire process is a waste of their talents and everyone’s time.
But it’s just not just vendors that detest ‘em, issuing companies do too. One of our clients commented on their love of the RFP process …
It is time for the RFP to go the way of the PDA, flip phone & beeper — once leading edge, which have now been made obsolete by alternatives that provide more value. Today’s lean business practices demand a more efficient way to move projects forward with trusted vendors. — Rob Moore
True story — Humans dislike RFPs. Can you blame them?
Still, every day, CEOs approve 4–5 of their top earners spending weeks distracted from their traditional priorities to, instead, gather “requirements” for an upcoming project.
They interview stakeholders inside the company — more peoples’ time & company money wasted. They accumulate a laundry list of things wrong with or missing from today’s solution. Then they start expanding bullets into paragraphs and pages with what the new and improved website, app, platform, portal, etc will do differently. In their research, they stumble across jargon like CMS, open source, HTML5, responsive and API which find their way into the Technical Requirements section. Finally, they propose how long the work should take, which they need to guess at since they’re experts in fields other than digital.
It gets worse.
Think private enterprise is bad? Let’s peek in at the US Fed. Our government writes RFPs to get a light bulb changed. OK fine, to build a $10M system that will manage the operations of hiring a vendor to change a light bulb.
According to FedBizOps, in the last 365 days the Fed has issued 53,228 RFPs — shield the eyes of nearby innocents for the math that follows.
- As of 2013, the average federal employee earns roughly $80,000. We can pretend that number is comprehensive.
- Let’s conservatively assume that the average RFP takes 4 weeks to gather, write and have approved; and that it’s handled by 2 fully allocated employees.
- Each RFP then costs $12,307 to generate.
- Grand total spent issuing RFPs in the last year by the US Fed: $655,113,846
Sorta makes you wanna crawl up in your Snuggie and sob for a while.
Remember, your state governments are following the same protocol. In fact, we recently received an RFP from a local county office. It was 58 pages. How long do you think that beauty took to spin up?
The RFP was hand-delivered from a trusted partner, so we took the initiative to read it. 10 pages in and none of us (we do this for a living) had a clue what they were hoping to communicate. So we started cataloging our assumptions that would need to be confirmed and questions to be answered. After 3 hours we had 5 pages of items that needed clarification before we could have an intelligent discussion about what we thought they wanted, and how we might begin to respond.
Bonus fact: In order to submit questions to the county we were required to provide estimated budgets, timelines, documentation on our software practice, resumes of everyone that would work on the project, sign several affidavits, complete 8 pages of forms and a dissertation on quantum gravity. The craziest part? I don’t think they were kidding.
Vendor reactions to RFPs
Offense, confusion and expletives aside, let’s agree that being invited into your RFP process doesn’t solicit the abounding sense of joy and pride you imagined it would.
In the example of the local county above, gathering resources to review their RFP and send an initial response cost New Haircut approximately $2500. What’s worse — we gleaned next to nothing about their goals which meant little value could be delivered in our response. Therefore, our first impressions are that this company will [continue to] be careless with everyone’s time. And since they require a fixed bid, we will need to pad budgets to protect from these unknown unknowns.
Once in a while, though, an RFP hits our inbox that hints at an opportunity to work on something interesting. If we can only get past the bullshit.
To wade through it, we ask these 4 questions upfront:
- What was the very first step you took when starting this RFP? We’ve heard things like, “We found this great template to write up all of our requirements.” Others mentioned how they selected software (like this) to “streamline the entire process.” Yeesh. Needless to say, we respectfully withdraw from businesses trying to capture their unique challenges in a MS Word template created a decade ago by someone in an entirely different industry.
- How many customers have you spoken to? Answers tend to hover between “none yet” and “that comes after this phase.” How on Earth do you write 50 pages about a solution for a customer you’ve never spoken to?
- Which metrics had the greatest impact on your decision to approve this project? Let’s be honest here, most projects have gotten to this stage because of unsubstantiated instincts or an executive’s ego. Or both.
- What kind of budget have you established to complete this project? “That’s what you’re supposed to tell us! [grumbling and high-fiving heard in the background]” Nay. If you’ve done your homework, you know there’s a market for what you’re trying to accomplish and how much you’d be willing to invest in such an opportunity. The vendor’s job is to find the most viable solution within that budget. Minimally, have a range in mind.
Make it all better
So then, let’s summarize what’s broken and then offer up some suggested steps to ensure your team is not only better equipped to identify and hire the right practitioner for your next project, but launch a product that has the best odds of creating market impact.
Broken: War and Peace
At the highest level, there are 3 egregious gaps within classic RFPs:
- They inhibit creativity & innovation. Most RFPs come pre-cooked with the company’s recommended solution, wrapped inside a fixed timeline with a dash of imaginary budget. If you knew what you needed and how long it would take to build, you wouldn’t need to waste your time issuing an RFP to others you consider more experienced, right?
- Customers are not represented. RFPs include assumptions based primarily on internal stakeholder views of the market, with little to any consideration for what your customer personas want and will ultimately pay for.
- Markets have moved on. In the span of weeks and months it takes to write your RFP, your customer behaviors have already shifted or been wooed by the shiny and new, aka the competitor you didn’t see coming because you were busy responding to responses.
If not RFPs, then what?
You probably already have your list of target agencies you were planning to invite into your RFP process. Hopefully those vendors have come highly recommended and are pre-vetted in some way. If not, first step is to do some googling on who you’re inviting in. Don’t just stop by their websites, scout for reviews on sites like Clutch and VenturePact. Look on portfolio sites like Behance and Dribbble. Read the testimonials. Proactively reach out to and speak with their clients.
Next step, set up a 30–60 minute screening with each qualified vendor and ask them to explain their process. In-person is always preferred, but a video chat or phone call will do.
What you’re looking to hear is how their lean approach to launching campaigns and products has enabled them to successfully deliver for companies X, Y and Z, and how you’ll have an equally successful engagement.
How does Lean replace & upgrade the RFP process?
First of all, there are myriad agencies out there, all with their own $10 words. What one calls lean, others call MVP and agile. Some talk about discovery, others call it analysis and research. Google Ventures timeboxed their iterative practice to 1 (or 2) weeks and packaged it as a design sprint.
The core concepts of lean and agile have been in practice in other industries for centuries — long before dudes like Steve Blank & Eric Ries evangelized them within tech. But just in case you’re a little crusty, a lean approach to building technology products harnesses the utility of learn-build-measure.
- Learn by talking to your [prospective] customers to measure their pains and figure out what you should …
- Build. Quickly (think days) prototyping solutions that you share with those customers to …
- Measure their effectiveness, learn more and iterate new builds until you hit product-market fit.
The output of lean product development is a functional solution to meet your customer’s needs in weeks, as opposed to months of spatting over unproven whims in a stale document.
Side-by-side: RFP vs. Lean
Using the previously mentioned local county project, let’s pit the RFP process vs. lean and see how things play out.
RFP: It’s now been 2 months since submitting our initial assumptions and questions. We’ve been told they are still working on gathering responses from vendors, after which they’ll issue an amended RFP (read: rewritten) so that willing vendors can try again. This repeats until vendors have enough information to submit a quote.
- Time: 4 weeks to issue + 8 weeks (so far) revising = 12 weeks
- Cost: 12 weeks * avg. weekly salary * 2 employees = $36,923
- Results: None. Stuck in RFP hell.
Lean: What we’d have proposed during that initial screening call is conducting a 2 week discovery session inside the company’s offices, understanding how their current systems were being used / mis-used and working with those who would benefit from a better experience. We’d arrive at a joint solution that’s not only actionable, but something any additional agency/vendor could quote against. Worst case scenario, the county would have paid 1 agency to construct an informed and feasible plan, which they could then use to shop around for additional quotes.
- Time: 2 weeks
- Cost: $6153 [salaries] + $20,000 [approximated cost of discovery] = $26,153
- Results: Customer + market data gathered. Prototypes built + insights captured. Product roadmap planned, including goals, metrics for success, features, budgets and release schedule.
Summarizing the benefits:
- Time: You’ve rescued at least 10 weeks back to your calendars.
- Cost: You’ve saved the company >$10,000.
- Results: You’re ready to start building the right solution, versus spending weeks or months more time answering vendor queries.
- Hidden savings: These benefits consider only the first couple weeks. What if we keep going for the duration of the project, which often lasts months or years? How much time and money will you have saved by launching the product your market actually wanted instead of spending months building the wrong thing only to scrap and start over? Is it remotely possible for your cost savings to be less than 6 figures?
No brainer? Correct.
Selecting a vendor to go lean with
The foundational goal of any technology RFP is to select a vendor that will give your company the best success of accomplishing its goals. So in the absence of the RFP, how do you decide who to work with?
As we witnessed above selecting 1 (tops 2) vendors to conduct a 2-week discovery / research sprint will not only save your company time and money, but yield real results. Your only job today is to pick that top vendor to engage, based on the screenings you conducted. Again, even if you decide you don’t want to move forward with this vendor after those 2 weeks, you’ll now have your roadmap, you can solicit quotes and pick a legit winner.
RFPs and their cousins, RFQs, RFIs & RFTs had good intentions. But what worked well for soliciting vendors to build another spaceship, has failed miserably for innovating new software products and conceiving creative campaigns.
Should you write things down so you’re prepared to talk? Absolutely. But focus on summarizing market economics, discussions with customers and supporting metrics. (a topic for another post?)
And just remember, the more you make your vendor work to figure out what you’re trying to say, the more they’re going to charge you in the long run. #truth #someonehadtosayit