Are RFPs Still Important?
At the recent ABC Financial Management & Information Technology Workshops, ABC members discussed working on projects to implement or upgrade their software applications, ranging from typical upgrades to complex system conversions and implementation of new systems. These discussions caused me to contemplate the relevance of the request for proposal (RFP) process and if it is still critical to project execution.
A RFP is a document used during the procurement process by organizations to solicit proposal or bids from interested vendors. Even though RFPs have been extensively used in public and private organizations, non-profits have only recently utilized them to their full capability. The creation of a RFP may seem daunting, time consuming, and a resource intensive task, but it has many benefits. The RFP process ensures alignment between the key stakeholders from business and information technology silos and promotes collaboration towards defining and prioritizing business requirements. It helps organizations understand the resource requirements and project timeline ahead of implementation. RFPs provide organizations an objective method to evaluate vendors and products based on meeting requirements rather than relying on their biases. It also forces the vendors to really understand customers’ requirements and provide the appropriate product that will fit their needs. The identification of any gaps in requirements early in the process is another benefit and allows a mechanism for both customers and vendors to negotiate prior to commencing the project.
Many misconceptions about RFPs exist and there is a general notion about requiring them only for projects involving implementation of new software applications. However, projects involving existing applications and their conversion/upgrade to different products or vendors can still benefit. No matter the size of the organization or the project complexity, ensuring project success still outweighs the effort required. One pitfall to be aware of is using a RFP for every procurement project. At times, a simple business case and vendor evaluation is sufficient. Organizations need to define their criteria and adopt a policy based on their needs to identify when RFPs are needed. The most commonly used criteria for utilizing RFPs is making it dependent on projects having the most impact on the business operations that are cross-departmental in nature.
Several new affordable web-based tools are available in the marketplace that can help with RFP creation and simplifying the overall process. Such tools can also move beyond RFP creations into assisting during RFP evaluation by scoring the bids and streamlining the communications both within and outside organizations. Consultants and firms are also available that can provide assistance during this process for organizations that are resource constrained. I still believe that RFPs are an important, critical tool that organizations can use to increase their chances of successful project execution. Now I must know—when is your next RFP going out?
Sameer Ughade; Director, Information Technology & Business intelligence