Making the Most of your RFP Process — Part II
In this series of articles, we discuss a couple of steps that customers can, and should, take to improve their RFP process when sourcing complex services, such as business process outsourcing or multi-vendor services.In the previous instalment, we looked at the different types of RFP processes and the varied approaches to terms and conditions. In this piece, we discuss two additional factors that impact on the success of an RFP process: timing and staffing.
Timing — Less is not More
Your executive sponsor has approved the project and wants the RFP awarded and the project underway in 90 days, with an update for the next quarterly board meeting. Three months sounds reasonable, but do resist the temptation to commit to any firm timelines until you have a few planning meetings with the deal team and have turned a couple of drafts of the RFP. You will then have a good sense of the complexity of transaction and the potential timelines required for proponents to submit responses and navigate the negotiation process.
Our clients consistently remark that getting to the final contract seemed to take longer than anyone anticipated — and there are a variety of reasons for this:
- business needs were not properly identified at the beginning and the scope was modified throughout the RFP process;
- the customer realized that it had not given proponents sufficient time to prepare and submit quality responses, so had to extend the RFP submission deadline;
- the proponents raised valid questions about the RFP that needed to be answered, so the customer had to extend the RFP submission deadline (again);
- key stakeholders in the RFP process were on vacation and another unanticipated delay was encountered.
Investing, and accounting for, sufficient time during the planning phases of your RFP process is perhaps the best thing you can do to help ensure the success of your project. And meeting or exceeding a realistic timeline will be better received by your executive sponsor than failing to meet an overly ambitious deadline.
Build in appropriate time for each phase of the RFP process to avoid multiple delays — each extra week added to the process adds significant cost to the project, both from your organization’s perspective and that of each participating proponent.
The more time spent at the front end, establishing business requirements and defining scope, the higher the probability that you will attract the right vendors and receive responses that meet the stated requirements of the RFP.
Establishing the Team — Getting Participation from Business and Legal
It goes without saying that the participation of key stakeholders is required throughout the RFP process. This is easier said than done with multiple demands on everyone’s time. All key stakeholders should be identified during the initial planning phase, and their commitment (along with the commitment of their bosses) to the RFP process, which may be full-time for long periods, should be secured up front.
Important participants include the business and technical people who will own the project, as well as the legal team who will support the RFP process and ongoing contract management functions. It is difficult to make meaningful contributions to a complex RFP process where a key player is jumping in and out of the planning, assessment and negotiation phases.
It is critical that the business people who will be charged with the day-to-day management of the project be present at every contract negotiation session so that they can pass along essential deal knowledge to the contract management team going forward.
As well, your executive sponsor needs to be available for certain sessions, to be an escalation point for unresolved items, and to enable her to "buy in" to and support the project as it unfolds.
Your legal advisor(s) offer valuable insight into whether certain terms will be acceptable from a risk management perspective, and their input will help temper enthusiastic technical team members who may not have the experience to know whether an innovative idea is workable from a legal perspective.
It is also important that there are a number of participants from each key area to ensure the RFP process is not delayed in the event of a vacation or job change.
Allocating the appropriate time and resources to the RFP process can be the difference between the success and failure of your project. Having discussed staffing and timing, we’ll look at the budget in the last instalment — and the importance of accounting for all the costs of carrying out an RFP process.