Success in outsourcing starts with the RFP



By Mark Atterby

checklist 15The road to engaging an outsourcing partner starts with the RFP (Request-For-Proposal). Many organisations have a structured and rigid approach to the RFP process, which from the very outset can limit the opportunities of developing a relationship based on innovation. It straight jackets providers by limiting what they can offer potential clients.

RFP is a detailed process where the services and requirements of a client organisation are documented and a range of potential vendors are then invited to bid for the contract.

It’s up to the potential vendors to demonstrate their capacity to provide the requested services, specifying time frames and costs. The client selects the winning bid based on  criteria that usually involves some combination of price, timeline, reputation and the proposed solution.

The process creates a standardised structure and approach for creating and analysing proposals. The problem that emerges as highlighted by outsourcing consultant Information Services Group, the traditional prescriptive RFP approach puts providers in a box, limiting what they can offer a potential client[i].

Clients can spend too much time focusing on service levels and price neglecting the broader scope and potential of the project. It’s a risk adverse protectionist approach which limits the possibility of forming a long-term relationship that adds value to both organisations.

Clients can spend too much time focusing on service levels and price neglecting the broader scope and potential of the project.

Providers compete to deliver the best solution within a narrow framework. The RFP process is designed to allow for apples to apples comparison. However, it constrains innovation since the client has dictated the terms and scope of the solution.

Brian Pullen, director for Playground observes, “An over structured RFP document is often too specific about project details. This specificity discourages providerss from being creative and proposing better solutions to the core problem, as companies are often already sold on the solution in their RFP”[ii].

It may not even be in the provider’s best interest to highlight errors in the requested solution. The structured communication policy and strict rules in the submission process can make proposing new ideas a deal breaker.

ISG recommends, rather than dictating specific terms to be adhered to, clients should allow providers the flexibility to propose unique solutions. The relationship can then begin around fresh thinking and innovation

[i] [ii]
May 20, 2015

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