Post on 28-Jan-2015
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Crystal Williams, Brian Skowron, Todd Nienkerk, and Zach ChandlerDrupalCon Denver | March 20, 2012
No RFPs!Why requests for proposal are bad for business (and how we can stop them)
#NoRFPs
Who we are
#NoRFPs
• Crystal Williams
• Brian Skowron, Lullabot
• Todd Nienkerk, Four Kitchens
• Zach Chandler, Stanford University
Who we are
#NoRFPs
Favorite RFP memories
#NoRFPs
Who we are
Why RFPs?
#NoRFPs
The Good Reason
There’s work to be done, and a customer is looking for vendors to help
Why RFPs? ➜ Good reason
#NoRFPs
The Bad Reasons
“That’s just how we’ve always done it”
#NoRFPs
Why RFPs? ➜ Bad reasons
“I think I’m supposed to write an RFP”
#NoRFPs
Why RFPs? ➜ Bad reasons
“It’s a standard requirement”
#NoRFPs
Why RFPs? ➜ Bad reasons
Required to gather competitive bid for projects over some amount of money
#NoRFPs
Why RFPs? ➜ Bad reasons
The Really Bad Reasons
Pricing a project to gain leverage over an existing vendor
#NoRFPs
Why RFPs? ➜ Really bad reasons
Free consulting: Get a blueprint, take it in house
#NoRFPs
Why RFPs? ➜ Really bad reasons
Risk aversion: Displace responsibility to the vendor
#NoRFPs
Why RFPs? ➜ Really bad reasons
Qualifying new vendors
#NoRFPs
Why RFPs? ➜ Really bad reasons
Why respond?Best-case scenario
#NoRFPs
Small shops, big projects
It’s not common (or easy), but it is possible for an exceptionally well qualified team to break through to the “Big Leagues” with RFPs
Why respond? ➜ Best-case scenario (Crystal Williams)
#NoRFPs
Practice “safe RFP”
Appropriate Complexity to the Size of Project?
Prior Relationship or Internal Advocate
If you can’t afford to lose this project, you might not be able to afford to win in
Why respond? ➜ Best-case scenario (Crystal Williams)
#NoRFPs
Why respond?Adjacent benefits
#NoRFPs
Sending a bigger message
We knew there was a chance we’d lose a recent RFP, but we also knew the potential of other projects from the client
RFP response was a way to demonstrate capabilities in a more comprehensive way to a wider audience
Why respond? ➜ Adjacent benefits (Lullabot)
#NoRFPs
If you assume you’re going to lose, is there still an upside?
Why respond? ➜ Adjacent benefits (Lullabot)
#NoRFPs
Why respond?Product analysis
#NoRFPs
Using RFPs to test a new service
With Lullabot’s new Videola service, RFPs helped us encounter questions we hadn't thought of, in a low-pressure setting
We were able to perform product and business analysis driven by actual client needs
Why respond? ➜ Product analysis (Lullabot)
#NoRFPs
RFPs can teach you about your strengths and weaknesses relative to a new market
Why respond? ➜ Product analysis (Lullabot)
#NoRFPs
Why respond?Maybe you shouldn’t
#NoRFPs
30-40 hours per RFP response
$5,000-7,000 opportunity cost
Won only 22% of the RFP-driven proposals we submitted
Only 16% of work resulted from RFPs
Why respond? ➜ Maybe you shouldn’t (Four Kitchens)
#NoRFPs
On the flip side...
84% of work involved no RFPs — just personal connections and word-of-mouth
Why respond? ➜ Maybe you shouldn’t (Four Kitchens)
#NoRFPs
Conclusions
RFPs have driven a small, but not insignificant, amount of business
It costs less for us to send a team to meet a potential client than responding to an RFP
Why respond? ➜ Maybe you shouldn’t (Four Kitchens)
#NoRFPs
Collateral damage:
Word’s gotten out that Four Kitchens “doesn’t respond to RFPs”
At least one client did not send us an RFP as a result
Why respond? ➜ Maybe you shouldn’t (Four Kitchens)
#NoRFPs
Try this at home
#NoRFPs
Calculate your “hit rate”
List all RFPs you’ve ever replied to, and mark those you won
Try this at home
#NoRFPs
Calculate how reliant you are on RFPs
List all projects you’ve ever “won,” and mark those that actually followed an RFP-proposal process
Try this at home
#NoRFPs
Calculate the cost of responding to an RFP
Try this at home
#NoRFPs
time spent writing proposal, communicating with client, etc.
your blended rate×
travel expenses+
opportunity cost
cost of responding
Now weigh that cost against
• Project’s revenue
• Will you actually make money?
• Likelihood of RFP win
• Are there other projects you are more likely to win?
Try this at home
#NoRFPs
Meanwhile, on the client’s side...
#NoRFPs
Clients like RFPs because they creates a sense of rigor around the selection process
...and it’s familiar...
The client speaks
#NoRFPs
We can build a better process
The client speaks
#NoRFPs
• personalized invitation to bid
• expository sketch (not a specification)
• presentations
• Q&A period
• documented vendor review process
• executive summary
• SoW should be collaborative and iterative
The client speaks ➜ Build a better process
#NoRFPs
This results in more work, but a better result, for the client and the project
The client speaks ➜ Build a better process
#NoRFPs
Advice to clients
#NoRFPs
Require speaking to the people who are going to work on the project
Salespeople should be facilitators, not the mouthpieces of the vendor
Advice to clients
#NoRFPs
Beware of low bids
They are often too good to be true
Advice to clients
#NoRFPs
Pre-select, research, and vet vendors
No open bids
Advice to clients
#NoRFPs
Do not create an exact specification in advance
Advice to clients
#NoRFPs
Check references
Word of mouth is not always right
Advice to clients
#NoRFPs
Be open about your budget, and ask vendors if they feel it is feasible
You may be wasting many vendors’ time only to discover your budget is way off the mark
Advice to clients
#NoRFPs
Advice to vendors
#NoRFPs
Ask clients how many other vendors they’re inviting to bid
Advice to vendors
#NoRFPs
Be open: Ask if it’s really worth your time to respond
Advice to vendors
#NoRFPs
“Why were we invited to bid?”
“Are vendors with existing relationships under consideration?”
“How did you find out about you us?”
Advice to vendors ➜ Ask if it’s worth your time
#NoRFPs
Ask if another vendor had been hired to write an RFP or evaluation
In these cases, it’s likely that vendor will get the job — not you
Advice to vendors
#NoRFPs
Ask about the selection process
Advice to vendors
#NoRFPs
Require a phone, video, or in-person meeting
Evaluate client consensus around requirements, goals
Advice to vendors
#NoRFPs
Ask if the client has ever embarked on a project like this before
If not, their expectations in terms of cost and difficulty may not be realistic
Advice to vendors
#NoRFPs
Does the client respect your work and industry?
Or are you just a bunch of “techies”?
Advice to vendors
#NoRFPs
Offer alternatives to the RFP-proposal process
As part of any sales or negotiation process, the evaluation system itself is often negotiable
Advice to vendors
#NoRFPs
Offer to write an evaluation rather than a proposal
See “Stop Writing Project Proposals” by Jonathan Wold, Smashing Magazine: cog.gd/3l2
Advice to vendors ➜ Offer alternatives
#NoRFPs
Suggest RFI instead of RFP
“Do you want to proceed?”
“Not sure if we’re a fit. Let’s tell you more about ourselves.”
Advice to vendors ➜ Offer alternatives
#NoRFPs
Where do we go from here?
#NoRFPs
• Crystal Williams
• Brian Skowron, Lullabot
• Todd Nienkerk, Four Kitchens
• Zach Chandler, Stanford University
Where do we go from here?
#NoRFPs
Responsible bid process
Where do we go from here? ➜ Final words
#NoRFPs
Resources
#NoRFPs
• Stop Writing Project ProposalsJonathan Wold, Smashing Magazinehttp://cog.gd/3l2
• RFPs: The Least Creative Way to Hire PeopleGreg Hoy, A List Aparthttp://cog.gd/28b
Resources
#NoRFPs
• 6 Steps to Writing a Better Request for ProposalsConfluent Formshttp://cog.gd/3l3
• Buying WinsJoe Rinaldi, Cognitionhttp://cog.gd/30p
Resources
#NoRFPs