Hands-On Guide to Creating a Successful RFP

Transcript

Slav Maslyanchyuk:

Welcome! What we’d like to do is just share a few tips that we learned along the way. RFP will be different depending on what industry or company you are in, but you know some of the steps that will help you make a successful RFP, or closing on the company that you’re looking for and also make the process of implementing your project or your solution that you would like. Just a quick introduction to the data. Our department is located in Spartanburg, South Carolina. Currently, we also have our headquarters in Portland, Oregon, and then the global headquarters in Germany. So, let’s start with the basics and just what is an RFP: Request For Proposal.

Slav Maslyanchyuk:

So, you’re inviting the vendors to meet the solutions or the requirements that you have set up for could be an automation project or another project. What you’re going to find is companies will try to distinguish themselves as much as possible, and if you don’t have a good RFP in place, they will try to set themselves apart as much as they can, use other criteria. The impact of a poor RFP could be two to three different things, a low bid could be from companies that are just setting out, they don’t have the obvious solutions to the issue they are requesting. Maybe they’re just trying to get their hands on the project but the solution that you’re looking for is not there, so you have to be watching out for those low bids, as well as the high bids. They could be looking at it and say, “Hey, I don’t know what they want”, and it costs them money to go in to review what the RFP requirements are, have their sales team and the development to look at the RFP. Specifically, if you have a detailed RFP, it takes a lot of time and effort on their part. So what they do is just go with it without questioning or putting the time and effort and save the money. So you have to watch out for the high bids, but I think what you want to watch out for is the no bids at all.

Slav Maslyanchyuk:

There are plenty of examples where the procurement team or the one who handles the RFP process for your company didn’t receive any responses and so you got to go back to the giant board and say, “Hey, what do we have to change or what do we have to do?” There could be a different bunch of things involved in why a company wouldn’t be responding to your RFP. Number one is if they look at the RFP quickly and see that there’s some other vendor competitor that was involved in creating the RFP they’re going to be like, “Well, we’re working on the backfoot already so we don’t want to put all the time and effort into it.” Number two is the fact that they just don’t want to spend the time and effort and because you have it so detailed and now you’re just not looking for the automation process to make the process that you’re currently doing and make it better or create a solution. So you have to watch out for some things.

Christopher Land:

Some real-world experience with RFP processes, what I’ve seen is on the low bid side of things. You’re going to have customers that are new or trying to penetrate the market and solution they’re providing. I’ve seen that, where they brought that bid in, when this has moved on to a procurement department, they don’t care what you need as a business, per se, they’re looking at the dollars. You have some competitors because we globally work on this as a company and when we do that, there’s some in the markets whose prices meet the need for them but it doesn’t meet the need for other areas in our business. So be careful with those low bids.

Christopher Land:

On the habits, I’ve seen this personally too, the company comes in and it’s because they’re looking at the RFP and realizing that it is a lot of work for them and they are going to drop a bunch of resources from our company on this. So, what they are going to do is make it worthwhile. You need to have those conversations with those vendors as well and ask them to come with the best prices, come in with something reasonable and look out for those because if not, you can end up with a solution and not have an option anymore.

Slav Maslyanchyuk:

So looking at the roadmap and the RFP process a little bit in detail. Because we’re a global company, we have to take into consideration what are the local and global requirements and know requirements from different companies so what we go through is that we define the efficiencies the customizations they added, the use cases pretty much for each country and not the only country but depending on what the project is going through in a department and define the steps that you’re taking now and bringing everybody together because what you don’t want to do is start automating something without realizing that it is going to involve this company, and then you’re going to have an issue at the end where you need to to do those changes, so what we have is the blueprinting stage which involves these different departments and what we need and what the solution that we will require. So once we do the blueprinting stage, and we write the RFP process, it goes to the procurement and the procurement is independent so they’re looking at that cost and the value. So that’s why it’s really important to have that RFP exactly the way that you want it so that you get the solution that you wanted to.

Christopher Land:

It is important to have conversations with procurement because, sometimes, you have a relationship with a vendor and the issue that I’ve seen personally, is that they work with you and they’re always giving you a fair price and procurement sometimes have those conversations and let them know your relationship completely with these companies and be open and honest and what you experience in the past with those because we do have a level where we need to take this RFP. If it’s over a certain dollar amount, we have to do it locally. Sometimes, procurement can come back and hurt your relationship with your vendors. So just make sure you’re open and honest with these procurement teams. Let them know, this is the relationship I have and that they need to understand that. We know what your job is to go back out there, try to get as many savings as you can, but just make sure that relationship is well known with procurement so they don’t hinder that relationship at all with your vendors.

Slav Maslyanchyuk:

That brings us to the next slide which is to have communication between the procurement and the vendor because what we’ve seen sometimes is that there could be some miscommunications. They could send out an RFP to a company and maybe they had some chances and they didn’t even respond, but, you know, a company that would have been responding and then there’s just no communication that also makes, making sure that the communication is there. If the vendor has any additional questions, if they’re interested in, have somebody that they can reach out to ask, if there are any questions that they have and guide them through and clarify the communication that you have with them. The clarification will result in a better solution in the end. And also making sure that they follow the guidelines that you set in the RFP is important, so that you can compare one product to another product. You want to compare the same solutions out there that you’re looking for. So, going out and researching beforehand, and what the solutions are out there, being as knowledgeable as you can is helpful. Before this process, requesting information from different departments, from people that did an RFP process in your company is helpful. And what the other thing, what you want to do is making sure that they make a presentation to the whole team, to all the decision-makers once they submit their proposals.

Christopher Land:

Communication is really simple and it sounds very elementary but we’ve had an instance where we were already using a product. So we send out the RFP for these vendors to respond to us. And when the time has come for it, it was to a stage where we’re going to start seeing the presentations that we realized that our current vendor had not even sent the RFP because the email was incorrect and it was kicked back, but our procurement didn’t even come back to us and say, “Hey we got an invalid email”, they’re doing their job. They’re sending our fee. They’re not telling you about the miscommunication, they just tell you there’s no response and that’s what we received.

Slav Maslyanchyuk:

That’s exactly right. Because what you’re looking for at the end of the day is the business demands and the solutions that you require. And they might kind of be different a little bit than what procurement looks at, which is just cost dependent so you want to make sure that you get both of those in your request. So, our selection process roadmap looks like this. Establishing beforehand the management team, all the stakeholders that you want to require is necessary for making sure all the voices are heard. Analyzing the current process. I mean, we cannot stress this enough but you should know the basics and see what the current process is. And again, communicate with the procurement, with the companies involved with the vendors as much as you can, understand the product. A lot of companies will go into presentations to present you a nice golden key to them but at the end of the day, you have to get information from companies that are utilizing their services, maybe information from other companies that have done business with them.

Slav Maslyanchyuk:

So doing your research is kind of what is most important that you want to do before you go in. And once the vendors present the product the solution they are offering, making sure everybody’s involved because specifically if you’re using an ERP system, SAP is out of all of those themes. And I don’t know if your companies like that but our IT team is really like you can’t touch anything or make any changes, they don’t want anybody going in there and messing around so making sure that they’re involved in the process as well. And then, making sure that the team makes the decision and it’s a unanimous decision depending on what process we have set up either by voting, or, giving a score to everybody just making sure that every voice is heard.

Slav Maslyanchyuk:

And then begin the implementation, either phased implementation is what we were looking for, or, you know, everything at once. Our standard T’s and C’s, we consider this is one of the variables because, in our view, the vendor that is providing the service has to agree to our legal work ethic. It’s okay if the company wants to change a little bit something, but it just postpones the whole process of making, choosing the vendor to go with and it could be a little bit cost expensive to make those changes. So, when we provide them the terms and conditions, this kind of sets the foundation to the contract because we have a set standard that we would like to you to agree to and so that kind of gives them at the end of the day is like, “Hey you know you have to follow some of these rules that we have set in place and accommodate them if need be.”

Slav Maslyanchyuk:

The vendor qualification is just making sure that the vendor that’s applying is capable of solving your problems and bringing in the solution that you would want. So you want to make sure that you do the research beforehand, making sure that they’re well established in the industry, making sure that they are capable of going and following through with the solution that they provide and, you know, fitting the company’s standards and aligning with your business ethics is also important because you don’t want some backlash from there. On top of the day, you would want them to offer reasonable pricing that meets the procurement needs.

Slav Maslyanchyuk:

So the scope of requirements is another variable that we have and this sets the ground for the contract, as well as kind of goes away through if there’s any questions or anything like that about the selection process, the transparency, making sure that everybody is on the same page if their information is needed to be shared with anybody, making sure that everybody’s in the same stage and that there is no you know funny business going on so this is having a legal standard is one of the important things as well. And this is the meat and the bones of the RFP process. So this is where you describe what you want the deliverables to be, what you want the solution to involve, the resources that you wanted to have, and then the plan in the schedule, how long it takes them to accomplish what you set out.

Slav Maslyanchyuk:

So, this is where you’re looking for the vendor to actually put in their time and effort and in describing and specifically if you have a few vendors that came to the reply to your RFP process, you want to compare what’s it’s vendor is offering so the description of all the deliverables is what you don’t want to have is just a standard reply from the vendor is like, “Yeah, we can do that”, what you want to do is have is a set template that they read, and as many questions, you ask them and as many things that you can kind of describe what your process is, the more that they can go into detail what they can solve for you, the better you will be in the contract portion and once the actual work is complete because what you don’t want one happening is you went through the RFP, you signed the contract, and then when you get the invoices like- “Well, I guess you know, you did some work, but that’s not what I wanted.”. So making sure that they described the deliverables that they will be offering for you. The resources are really important as well for making sure that they’re, you know, they’re a company that has been doing what they are doing for a few years, they’re established in the industry, making sure that there are any risks or assumptions on the table that you can review with the whole company, making sure that they have the skills to complete the process and then really the plan and the schedule is what can you choose, how long you want this to be accomplished for. So depending on how big of a project is, and what is the deadline that you want them to accomplish, you might set out a kind of like many deadlines as you go along so that you can meet them as you go, instead of just waiting for the end and say, “Hey, okay, this is done and not going through with what you want to be done.”

Christopher Land:

I’ve had some conversations in here, the RFP process, and I’ve heard some responses that, “Hey, we sent out our RFP and was sent to 25 and nobody responded.” And that gets into the deliverables. There’s a difference between documenting your processes and making demands. Documenting those processes is what you deliver. So that way that vendor is going to look at this and say, “Okay, I see what you’re doing and this is how we resolve that for you”, instead of saying, “I have these demands from you, you meet all of them.” It’s a different thing. Because if you come out with all these demands, and you’re not giving your current processes, what you’re going to end up finding is you may not have any responses at all. And that’s not a good thing because now you have to go through that process, you’ve got to go back to the table and rewrite your RFP. Now, you need to document your processes for this to understand because they need to see and you never know what it has been, they may have technology that is coming in the next quarter or the next two quarters and they can let you know that and say it will meet this need, potentially following two years to your project deadlines.

Questioner:

So do you document your product, your processes and then do you give a little bit more deliverables? Because it seems like you’re not saying what you’re looking for.

Christopher Land:

What we’re giving are our processes. This is what we require as a business and we have teams that document exactly what we do within our process.

Questioner:

Okay.

Christopher Land:

So we’re going step by step, A to Z. Everything that we do for accepting payment, for offsetting an invoice, there are processes and guidelines we are following, and those processes are easily handed over. So when you’re creating, if those are development front, it’s easy to integrate them into your RFP if required. But there’s a fine line between how much you give someone and if they are going to look at this RFP and say, “This is too much money and I won’t even respond to it.” And then you start getting into the pricing issues, or you’re giving them enough to their understanding, they’re not coming because what you’ll find is if you don’t give them enough information, your resources are going to be used so now you are going back to that process of understanding like, “This is our process, this is what you’re looking for.” So now your time is wasted and you could have done that upfront. So, if you get to those deliverables with some detailed steps of processing, at least get at a level to where they know what you need and what your processes are.

Slav Maslyanchyuk:

So, now that we have the processes established, and the RFP has been written, we’re done. The hard part is pricing. Sometimes, everything that you want may not be easy or may require a lot of work. So, pricing is where you find how driven the vendor is to do what you request them to do. So, you want to avoid the premium prices and the low prices, you want to be somewhere in between. And so if you follow through with the RFP correctly, and you can do those comparisons, the pricing should be straightforward. You want to make sure that when companies submit the RFP prices, the prices should be consistent throughout, and then that would make it easier for you and the procurement team to select the vendor that you would like because the pricing is pretty much on the same level. Usually, vendors still leave a little bit of space to kind of negotiate because they are also in that contract portion of the negotiation. When you negotiate with procurement, they leave that buffer zone a little bit because they know the next step so you want to go into the midsection of the pricing.

Christopher Land:

Communication with your vendor is necessary. I have had this happen where the vendor came back after the selection process and said, “Oh, I didn’t give you my best price. That’s half.” And it’s just because they’re looking at it they have a confidence level that you’re going to pay this price. And our procurement says, “we’re not even selecting you, you’re out of this”, and when they came back to us, it was too late and the selection was made. It depends on your roles within your organization. You might not be able to directly go to that vendor but at least know the RFP process. So always try to communicate, anybody that you’re having a conversation with say, “just come with your best honest price”, because if not, it’s very easy to be left out.

Slav Maslyanchyuk:

So, the lessons learned here are making sure that starting the foundation or RFP is the blueprinting stage and having as much information as possible on the solutions that are available out there. It’s probably one of the most important things because if you have set the correct foundation, when you start to implement after you choose the vendor, you’ll have all of that already made and you already know when to begin and what steps to take. So, the key to setting up a good foundation is a blueprint and making sure that you involve all the different departments that are going to be affected by this change. You’ll want to document everything once you start making those changes and making sure that at the end of the day, the solution that you have picked is capable of answering all of your needs, there’s going to be things that you’re gonna have to make changes onto because you’re going to learn from the process, or from the solution that you already implemented. You may kind of wear off from the RFP which you requested through the requests for changes, but that foundation is already set.

Christopher Land:

We’ve been in situations where you get to your assumption like reporting things. Now you get into proof of concept. Sometimes, a proof of concept is a waste of time for a lot of companies. Some people love to do it and they want to see it. But it can’t help you in the end, if you’re not familiar with dealing with the RFP process, we get to the end and we always have a solution. And we realize that “Oh, your reports are not built the way we need to be built.” You have to dig into the details. Sometimes you don’t even know what you need and you need others around you to help with that to determine what we need as a company, what reports you need for different areas like what you need, what your AR department needs, what your collections and claims are, etc. Because sometimes you don’t know what some groups may be doing on a day to day basis and they don’t answer. And your vendor had no way to get that out of the system. So, now they have to build something. And that’s where it becomes difficult in your RFP process because now your price just goes up and going up is never a good thing. And you have to go after more money. You’ve already made the selection process and it just becomes a difficult situation. So just ensure that you always have those requirements. You can find yourself in some trouble if you don’t. Especially in small detail.

Slav Maslyanchyuk:

Yeah, I think what is important is before you get what you want, you have to meet what you need first. And so making sure that all of those needs are successfully taken care of first before you get to automation because you’re going to hear a lot of different key buzzwords and things like that about automating everything but it doesn’t meet the artist requirements or meet the basic requirements that your day to day job requires. So, in the end, this is what one of our recent RFP templates looks like. It goes all the way up to page 22 and more. So your RFP obviously could be different than this one. But this is what worked for us. And I think this template is going to be available at the end of the app so you can take a look and see. Any other questions?

Questioner:

What value does procurement bring to this? Because my challenges internally were the seasoned treasury. Right? And our procurement group doesn’t know how to think about a banking vendor for cash management, treasury technology, or some of these things. So how do you get over that barrier?

Christopher Land:

Well, for me, procurement is there for the negotiations and you don’t want to mess with it. So you’re there for that negotiation on your price and negotiations of terms that we are going to meet. To me, they don’t bring value to business needs. You understand what the procurement is doing if I need to sit down with you and explain to you and show you step by step processes, of why we’re the ones that decide on the tool that’s there for us. You go out and you negotiate the price. And, they’re not bringing any value as a business process. They bring the value of dropping down costs as much as possible.

Slav Maslyanchyuk:

And also if you move up the corporate chain, make sure that the decision-makers are involved in the process, make sure that they understand your needs, then procurement will do their job in negotiating the contract instead of picking the vendor for you.

Christopher Land:

They can have some options for pricing and pull as legal as well. I understand those things that they’re doing but they’re not the ones that are important in making the final decision.

Questioner:

Hey, I’m Karen from Moscow and I’m trying to do an RFP for collection agencies because I get 10 calls a week from people who want my business. So I just had two questions. When do you get the presentations? Like people want to come in and present to me before we have finished RFP and ask us to wait. So what’s the right number?

Christopher Land:

I don’t know. I would ask you not to go over five. You know how many presentations you can see when it comes down to your needs. Usually, three to five is the number. So, you have 25 responses, it’s your time to evaluate that and have those discussions with everyone at the table and determine the final five. The procurements go out for us and communicate like, “Hey, we’re selecting you, this is what we need for the presentation or this is when we need you to present. I’ve sat down in an office and we did it in Germany, all day long or over three days, which every vendor came in, and I’ve done it where it’s been several weeks, that the something else to look at too, is how they’re going to present it to you. There’s something about a company that’s willing to go above and beyond and say I’m coming to you, and we’re going to have some presentations, and you have the ones that are not so awesome.

Questioner:

And if anyone’s done a collection RFP, I’d love to talk to you. And I think I’d like to maybe pick three, actually three employees, so I can continue to benchmark them.

Christopher Land:

Yeah, in that aspect I can see that working.

Slav Maslyanchyuk:

What you want to do is have them drive and see what they want to show you. Make sure you give them an overview so that you can compare at the end of the day, what they’re offering. Any other questions?

Questioner:

So, what is your dollar now for having to put together RFP? Do you have a limit?

Christopher Land:

Our local level changes and then reevaluates. Right now, our local level is around $25,000 to $50,000. And, as you started seeing $100,000 and it moves on. We have a good rule of thumb, we like to stick around $10,000 to $15,000 locally, while we’re doing the selection.

Questioner:

It just seems so painful.

Christopher Land:

It can be painful. But, it all depends on budgeting. If we know something’s coming in for the next year in our potential, we can have better procurement say, “okay, we’re going to involve you in this process, but we’re funding this locally, and it’s at a $95,000 mark where they normally would want to take it over, but we budgeted for it, and we know what’s coming.” So we know we can get into this price range. So we’re sticking to that.

Questioner:

I’m Sally Fenian Anikstir. Do you find that you’ll have some of your vendors, the people that you’ve sent this out to so that they call you? And they start asking questions. And, I think that’s where it starts getting a little bit complicated. It’s like, where do you stop that where it’s like, it seems like there’s a fine line there.

Christopher Land:

The rules need to be set out upfront that there is no contact. No matter the relationship, you have with vendors. Go through that process of who you’re contacting. So you’re coming back through procurement, ask your questions so that it goes to the crew.

Questioner:

Okay. So if they have questions, they need to go back to procurement because, you know, that gets tricky.

Christopher Land:

Are you going to have personal conversations with a vendor that you’ve been working on for 15 years? Is that going to happen? I’m sure it probably will. Keep that to yourself. You don’t want to be answering questions outside of your group and your process because it’s not open and honest and fair to the group. But I understand that you have a long term relationship. So you have probably asked the question, and I would just simply ask to refer to the RFP process, contact the group because we’re going to get your question answered a lot faster than coming to me. I just know I can answer. Am I going to answer? No, because I just don’t think that is the relationship.

Questioner:

Yeah.

Christopher Land:

It’s a difficult one because I think of some of my mentors and friends whom I work with. So you just need to stick to the process, stick to that rule and you’ll be okay.

Slav Maslyanchyuk:

And they want to find out about the other competition instead of what you wanted.

Christopher Land:

They want to know, what did Joe do over here at this company and Sally in this company? What did they give you? And it’s like, I’m not telling you any of this because I told you from the beginning, the only thing I said was to come to me with your best offer and your best price and you have a good shot.

Questioner:

When do they start asking you who else is involved?

Christopher Land:

The thing is if you don’t answer them, they still find out anyway. Just don’t mess around and tell them, “No, I can’t.” What they do is they talk to everybody and they’re going to conferences, and because of the conversations, they find out like if you’re in their selection. They are going to find out anyway, you don’t have to involve yourself.

Questioner:

Okay. Sounds good. Thanks.

Slav Maslyanchyuk:

All right. Thank you.

Slav Maslyanchyuk: Welcome! What we'd like to do is just share a few tips that we learned along the way. RFP will be different depending on what industry or company you are in, but you know some of the steps that will help you make a successful RFP, or closing on the company that you're looking for and also make the process of implementing your project or your solution that you would like. Just a quick introduction to the data. Our department is located in Spartanburg, South Carolina. Currently, we also have our headquarters in Portland, Oregon, and then the global headquarters in Germany. So, let's start with the basics and just what is an RFP: Request For Proposal. Slav Maslyanchyuk: So, you're inviting the vendors to meet the solutions or the requirements that you have set up for could be an automation project or another project. What you're going to find is companies will try to distinguish themselves as much as possible, and if you don't have a good RFP in place, they will try to set themselves apart as much as they can, use other criteria. The impact of a poor RFP could be two to three different…

What you'll learn

Sitting down to write an RFP that clearly defines your project requirements, goals, implementation steps and ensures timely, within-budget execution, can be overwhelming. So before you send any emails, ask for recommendations or make any phone calls, tap into the adidas experience of writing an effective and successful RFP.