Yesterday’s Procurement Methods for Today’s Technology?

Is your business working with outdated IT procurement procedures? And, if so, what can you do to ensure they support, rather than constrain the achievement of your business objectives?

The unprecedented pace and impact of technology change means enterprises need to re-imagine and re-architect their processes, systems and organisational structures. Many still aren’t taking advantage of powerful and flexible cloud based IT to become more agile, more responsive and more focused on their customers’ needs.

Those in the boardroom are demanding creativity, lateral thinking, differentiation, “…make us stand out in a crowded marketplace”, but it’s our observation that even the most forward thinking organisations can be let down by antiquated methods by which to seek proposals for services.

Executives’ open-mindedness and desire for innovation is not translating in the creation of RFPs; somewhere between the internal discussion and the process of seeking potential suppliers, the drive for creativity is lost. Stock questions get rewarded by stock answers, rigid directives that don’t allow for creative solutioning, stifle innovation and mean you get boiler-plate ‘commoditised’ propositions…

Would it surprise you to know that many technology vendors now decline to respond to formal engagements like the RFP if they haven’t been involved in direct, early conversations about the project? Preparing responses to RFPs is not cheap; with many hours of input required from the providers’ sales, engineering, finance, and legal teams. If a supplier considers they are just one in a large field of possible providers they’d rather spend time on opportunities where the chance of winning is higher, or better qualified. Savvy suppliers don’t want to be ‘making up the numbers’ in a beauty parade in which they were always destined to be the bridesmaid and never the bride…

 

Tips to improve the RFP process

Realistically, the RFP process cannot be scrapped altogether. Too many legal and procurement-based imperatives exist for this well-established process to be discarded. There needs to be a method by which to receive bids from prospective technology partners and some common requirements on which to measure their proposal, but the process definitely can be improved.

Are you being overly restrictive?

Enterprise IT projects need to encourage agility and innovation from suppliers, so specifying exact technical requirements should be avoided.

How open to a discussion with potential suppliers can / should you be?

One of the most common complaints from vendors about the RFP process is the inability to engage directly with the customer. Indeed, many say that the worst case scenario is an RFP simply arriving unexpectedly as it can mean other suppliers have been involved already and perhaps influenced its construction.

Are you encouraging suppliers to lie to you?

A scorecard procurement process leads vendors to focus on how to win the numerical battle, rather than meet the strategic needs of the enterprise. This in turn leads to proposals being built according to how many points they may score rather than how well they meet business requirements. In some cases, it may also lead to bidders over emphasising their capabilities for the sake of a high score.

Could you build a better shortlist?

Deeper, more qualitative engagement with a smaller field of credible suppliers ensures you are choosing from a field who are all worthy winners, and will ensure their full engagement with the process.

Why engage with an independent advisor?

The most effective way to improve the outcome of a procurement exercise such as an RFP is to make sure you have the right bidders in the field to begin with.

A smaller field, of ‘right-fit’ bidders, is infinitely better than a long list of also-ran’s, and is much better use of both buyer and seller’s time and resources. But how do you identify who the best-fit bidders are?

  1. Do you give the job to your procurement team? Undoubtedly skilled in the techniques of seeking quotes, vendor management, contract negotiation, but even with specialist technology category managers in larger teams, do they have the necessary experience or knowledge of the field when technology trends shift so quickly? How can they keep abreast of all parts of the technology landscape?
  2. Seek external support? Some people speak to an analyst like Gartner or Forrester, let’s not debate in this article the validity of all the entrants on the annual Matrices (er, how much do those players pay for the privilege of analyst exposure?) Or indeed the sheer number of Matrices themselves… Alternatively you might seek the advice of someone trusted in your professional network… maybe a colleague, past or present, someone in an industry networking group, or an incumbent technology supplier.
  3. Or what about an independent advisor? The concept of ‘trusted advisor’ is not a new phenomenon, having been the holy grail of every sales methodology for the past three decades! But it’s a much-abused self-appointed title for the typical sales journeymen who work for one vendor one year, and their closest competitor the next. How strange that today’s paymaster is the one you should be buying from them as it’s the greatest thing since sliced-bread!

Independent Advisors like Behind Every Cloud spend hundreds of man-hours speaking with vendors, technology buyers, legacy providers and those newer to market; but most importantly, to other IT leaders with the same business problems as our clients… so we feel uniquely qualified to share multiple perspectives on a given problem or need. With so many sources of input, we also know which providers aren’t delivering as well as they maybe once did, and we have absolutely no motivation to put such vendors into our clients’ projects to ultimately make us look bad.

You could say we are like technology matchmakers, bringing compatible buyers and sellers together; but think more match.com than Tinder or Bumble. We’re introducing for long term relationships (a marriage even), certainly not a quick hook up for a short term gains! Our role as this ‘broker’ benefits both parties; the vendor gets well qualified, personal introductions to people with a need for exactly what they provide; the buyer speaks to a field of proven, quality providers who are differentiated from the ‘usual suspects in an RFP process.

The way BEC ‘earn’ the title of Trusted Advisor in our professional circles is by delivering real value, quickly (often in the first meeting, with absolutely no charge at all to the client), and by the vendors we work with delivering on our promise of differentiated service, product and quality.

Originally posted by Paul Boyd on LinkedIn

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