How to Determine the Right RFP Process for Your Company
It’s very common practice to send out RFPs when your organization is looking to make the next evolutionary leap in web technology. But is it really best to send out an RFP to the world?
As the CEO of an enterprise web and hosting firm, what I hope to accomplish in this post is to help bring clarity to whether you are helping our hurting yourself with your RFP process. I will outline the three major ways RFPs are processed and articulate the benefits and drawbacks of each method.
The Completely Open RFP
This process is exactly what it sounds like and if you’re new to the world of sending out RFPs it can seem very appealing. Completely open RFPs are pumped out publicly with the hope of receiving numerous responses for your upcoming project or new relationship. Buyer beware, however, that this strategy can quickly get out of control. Completely open RFPs are actually the least preferred method of finding the right talent to partner with you long term for your wosting needs.
You will discover that your completely open RFP will make it to the far reaches of the universe - hopefully bringing new relationships and awareness to options that you may not have previously thought of. It will also help you get a better understanding of how compelling your RFP is to potential partners and if you are attracting the types of partners that you hoped your RFP would.
The downside to taking this approach is absolutely staggering. First and foremost the number of responses can be absolutely overwhelming. Keep in mind that part of a successful RFP process is getting questions, answering questions, and getting to know the different firms that have an interest in working with you for the long term. Unless you’re the federal government it’s highly unlikely that you’ll have the opportunity to review even a quarter of the responses you'll receive from a completely open RFP.
Secondly, well-positioned web development and hosting agencies will refuse to submit a proposal for the RFP you’ve put out. These firms are typically in high demand and their time is extremely valuable, making an open bid with no intimate knowledge of your organization a complete waste of time.
The groups that will most likely walk away are the ones that you are most hungry to build a relationship with. Be certain to have good reasons for making a completely open RFP when trying to find a new partner that could be with you for the foreseeable future.
The Pre-Selected RFP List
In my opinion, the best way to solicit new long term partners is the pre-selected RFP list. The pre-selected RFP list shows that you’ve already established credible companies capable of offering insight on how to best accomplish your goals on the web. This indicates that you are serious about making real progress on the web.
The pros are plentiful for this method because you are only soliciting the best firms to join you in an opportunity to open a mutually beneficial business relationship. It will encourage those invited to compete for your business knowing that you, as the RFP manager, aren't simply looking for the lowest price. The limited requests show that you are more focused on what the relationship will bring in terms of results. A secondary benefit is that you can include additional firms up until the final submission should you run into, or be recommended to, other firms that you didn’t know about when you initially reached out to the first set of potential candidates.
With this process you’ll be able to do individual questions, in-person meetings, meet the different teams, and put the proposals in full view. The last item is important as some firms will offer unique approaches to partnerships that are worth considering. I highly recommend you limit the number of qualified responses to no more than six firms. This ensures their engagement and it gives you the correct attention with each of the firms you selected.
I’ve seen pre-selected RFP lists with as few as three firms with two being down-selected for their in-person presentations.
There aren’t a ton of cons from a pure business benefit standpoint other than you may miss a firm that could have been a good match in the process. That being said, hopefully, your research led you to alternatives that were just as strong.
If you’re heavily vested in your local community and looking for a partner that’s regionally close you could find yourself in a tight spot with firms you are friends with but don’t intend on letting them bid on the work. This is particularly tough when establishing a long term partner as a larger company. It should be expected that you need a firm that has enough size to scale with you as demand grows from both your marketing and technical teams.
A strong recommendation I make for handling this is to establish minimum staff and financial requirements to be a part of the RFP process. This helps maintain strength with the professional and personal relationships you’ve developed.
Sole Source RFP
The sole source RFP is very powerful if you have a strong trust relationship that is founded on mutual prosperity with a web firm. It’s a common mistake for companies to feel that in order to keep everyone honest they must have a certain amount of proposals submitted - but this is not true. The sole source RFP is for two companies that have a terrific history together with a track record of success. Remember that issuing a completely open or pre-selected RFP right in a trusted partner’s face can definitely damage your relationship with your existing partner.
You will further strengthen your relationship with your partner and the product you will receive will be predictable as you know the benefits of working with your existing partner well. From the proposal, you’ll also have a good determination of what your future planning will cost over the course of the year or within the project scope. If the RFP is not agreeable you still retain the option to do what you wish moving forward.
Sending a sole source RFP out that you end up not accepting can still be damaging to the long term relationship with your existing partner. You need to ensure that you’re looking to get the best terms and price possible from the beginning instead of backtracking in order to secure a better business deal.
RFP Wrap Up
My recommendation is that if you have an existing partner you're happy with to further nurture and grow that relationship. If you have corporate laws or don’t have an existing web/hosting partner then you should submit a pre-selected bidder list. There are very few instances when a completely open RFP yields positive results for the company that puts them out and often times causes fighting within the organization for stakeholders contributing to the decision making process.
Taking one of the two approaches I’ve recommended will also limit the variance from proposal to proposal and show you the true cost of reaching your goals. Opting for a sole source RFP or pre-selected RFP list will yield the most realistic proposals as opposed to weeding through substantial over promise and under deliver scenarios that are found in an open RFP process.
If you’ve got an RFP to get out the door Unleashed Technologies is happy to help you work out the details and put out a document that’s going to get you the best responses possible. Just drop us a line.