Why ERP RFPs don’t work

There are thousands of RFP’s issued every day through a variety of mechanisms, websites and organizations.  Sometimes they are created internally, more often than not specialist selection companies are hired to assist in the creation, publishing and scoring of the process.  Those companies promise a deep dive into existing processes, shortfalls and requirements and offer to invite, rank and help select the best solution based on their content.  So why do they almost always fail to deliver on expectations?

  1. RFP’s do NOT identify the best solution.

Based on sometimes thousands of functional questions related to existing business processes, the tendency from all respondents is to answer yes to everything and work it our later.  With no connection between one question and the next, context and business process are usually missing from the evaluation and the response.  RFP scoring is often weighted just as much if not more on price as it is on functionality, and even then it’s functionality that meets existing business processes a best.  Everyone responding knows that and will never give an accurate reflection of cost, especially not while they are still competing for the business for free.

  1. The process is boilerplate.

Firms that offer RFP selection services typically have a predefined template of functional requirements created over many years.  Often these requirements do not take into consideration changes in technology quickly enough (remember the last time you read an RFP that asked “What is your solution’s overnight batch posting process?”).  Rather than do deep dive into the reasons for change and the needs of the business in the future, they validate their checklist against current business processes.

  1. There is no room or reward for creativity or innovation.

A set of functional questions supporting existing business process documentation does not invite or encourage innovative business solutions. Quite the opposite in fact – it requires all respondents to think and be evaluated the same way.  With little to no customer facing time and no incentive to invest expensive resources in a bidding war, respondents are unable to challenge business models and processes and suggest completely new ways of solving real business problems collaboratively with the customer.

  1. Speed dating is not a good way to start a relationship. 

With little time to get to know each other, the respondent and the customer do not often create a valuable business relationship through an RFP process.  With a third party in the mix, battling for the cheapest price and the most features, the relationship is often strained before it even really begins.

  1. You may not even find the right partner.

Most quality providers refuse to answer RFP’s because the process is flawed and the investment outweighs the benefits even if they win.  Where an RFP process is a requirement there’s probably an incumbent and everyone else invited is cannon fodder, and they know that.  Outside parties tend to invite their favorites every time, and may even have a preferred relationship with one of them.  At best, there’s a good chance you will only get responses from organizations desperate for the work, rather than those with the best team, innovative solutions and relevant experience.  Desperate will probably also be cheap, so it will look great on paper.  The  business outcomes will almost certainly reflect those values.

Save money, save time, and instead find a trusted partner that really knows your industry.  Chances are they already have a far better solution than your RFP will ever uncover, and because they know your world already their pricing is likely far more accurate and won’t vary as much as the desperate RFP responders when they realize what they didn’t know and couldn’t find out.