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Is Good Enough Good Enough? Five Steps to Understanding the RFP Process

  

Understanding the RFP ProcessBy Jeff Marshall, Risk Management Consultant focusing on public and education risk management issues. You can follow Jeff through his blog, The Risk Management Guy, or reach him on LinkedIn at linkedin.com/in/jeffreydmarshall.

Back in college, I took a course in rhetoric. I remember walking into class one day and being greeted by a rather rude poster with an image of a pile of fecal matter covered in flies. The caption read, “10 million flies can’t be wrong. Eat [fecal matter].” The lecture was on the use and abuse of numbers and statistics.

I had forgotten (or repressed) the class for the last few decades until about three months ago when I found myself seated in a conference room surrounded by stacks of request for proposal (RFP) responses and a team of less-than-enthusiastic submission reviewers. This was Day One in the selection of an insurance consultant/risk management team, and we were all about to get our instructions on timetables and grading methodologies. As I quickly read the introductory statements of each submission, I noted how each response bragged about their 95 percent-plus client retention rate and their equally high client approval rate. That’s when my Communications 305 lecture slipped from its permanent spot on my memory shelf. I truly believed their claims. What I questioned was, “do these numbers indicate how good the provider is or how naive or lazy the consumer is?” I believe it was the latter.

So as I entered yet another RFP process, I started thinking about the fact that it really is unfair to accuse the responses for being weak, perhaps it’s the RFPs that are the problem. We need to issue better RFPs.

  1. The Answer to Dealing With the Insufferable RFP Process Is to Extend It by Six Months??? Yep. You’ve been living with one service team and one system. When someone starts talking about changing vendors, you start hearing the Don Henley lyrics, "What are those voices outside love’s open door, make us throw off our contentment and beg for something more?" The truth is that when you draft your RFP, you do so based on what you know. Unless you make a serious effort to find out what has changed since you last went out to bid and where it is moving over the next three to five years, your RFP will be shopping for outdated goods and services. The best way to determine what is “the latest and the greatest” and whether your organization will benefit from the changes is to meet with those who may bid on your work before time to find out where they are moving in the marketplace. It also allows you to get to know the people who will be bidding on your program outside the artificial environment of the bidding process. It can also remove the cognitive biases that appear in complex decision making (see point two below).
  1. Heuristics are mental shortcuts that we use for problem solving or decision making. They are based on our own personal biases. Theoretically, a committee approach to decision making should reduce the unconscious biases that control our personal thought process. It doesn’t. The organization, particularly when it is a tight working team, has its own heuristics or Zeitgeist. Taking the time before the release--or even while drafting the RFP--can go a long way towards leveling the playing field so that the incumbent stops being the measuring stick for the process.
  1. Your Present Provider May Not Necessarily Understand “WHY,” but He or She Does Know the “WHAT” of the Process. We all like to think of ourselves as rational decision makers--as Joe Friday used to say on Dragnet: “Just the facts, ma’am"--the reality is that we are not. As indicated above, we all have our mental shortcuts, our personal rules for addressing decision making. Most are deeply flawed.

    Three major flaws in our process are:
    1. If you were involved with the original decision to hire the incumbent, removing the incumbent may feel too much like a self-indictment of your original decision and your personal abilities.
    2. If there is already a perception that our program is succeeding (either by you or by your superiors), you tend to fall back on the old adage, “the devil we know is better than the devil we don’t.”
    3. It’s all about the relationship. As long as there is a comfort level, we will “zero-out” the different technologies and then talk in terms of personalities. This may be the most important factor in the process. EVERY evaluation that I have participated in has eventually focused on personality instead of product or process.
      • “We work really well with her.”
      • “I just don’t trust him.”
      • “She is never available when you need her.”
      • “I just get the sense that he has a better understanding of the environment that we have to work in.”

Now that you understand the both the “What” and the “Why”:

  1. Draft your RFP to Invite Discussions. Does your RFP process invite discussion; that is, does it invite an exploration of issues, approaches, and solutions or is it a scripted dialogue? I have had a number of experiences where bidders had a truly innovative tech-tool that brought real value to the program. Unfortunately, the folks running the process were more interested in staying on schedule than exploring the opportunities that the process could provide. Each time the process resulted in accepting a decade-old solution adorned with a few updates and patches. When I run the drill, I like to start by assuring the bidder that I thoroughly reviewed their bid and that it was good enough to get them into the room. I then ask them where do they see the industry going over the next five or ten years. This leads to the discussion of how the vendor will help position the client to take advantage of those changes.
  1. Think in Terms of the Bigger Picture and the Longer Relationship. Nobody likes to have their time wasted. If the community starts to sense that the RFP is a sham and that you are too lazy to give serious consideration to change, they will not invest their time entering into a rigged beauty contest. This will result in your present provider being able to increase the price and provide fewer services than you may have otherwise been able to get.

I am not advocating changing vendors for the sake of changing. I am merely trying to pull back the curtain on the process so that we are all more sensitized to the process. Hopefully, it leads to more informed decisions.

So how many RFPs have you judged? What percentage of the RFPs have resulted in retaining the incumbent versus what percentage resulted in a change of vendor? If a change from an incumbent took place, did you go into the process looking to change the vendor? Please share your experience.

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