What if... request for proposal documents were impartial?

Dale Vile considers how customers choose their suppliers...

Companies looking to make a significant technology investment need some way of assessing the suitability of the products and services. They also need a way of comparing offerings from alternative suppliers. Which all means it is common for them to define and prioritise requirements then lay them out as a series of questions in a request for proposal (RFP).

Such a document is then sent to all prospective suppliers who are asked to respond with answers and provide a commercial bid for the business. All very efficient and straightforward. Or is it?

The reality is that this time-honoured process is often cumbersome, unwieldy and expensive for all concerned. The buyer often pools questions from up and down the organisation to ensure everyone has their say. As a result, it is not uncommon for RFPs to run to hundreds of pages and go into excruciating detail on issues that can appear obvious or irrelevant.

The supplier teams get their revenge by producing a response document that is even thicker than the original RFP. If pushed too far, customers retaliate with a 'supplementary questions' document - and so the ping pong match continues, accompanied by the occasional ker-ching of advising consultants' cash registers.

At times, this all seems a little silly. Think of the multiple teams of highly paid professionals progressively losing sight of the wood for the trees as they get bogged down in the mass of detail.

It is particularly non-productive when new technologies are involved and the customer team puts together an RFP based on limited experience without doing their homework.

There is then the appallingly short-sighted practice of public sector organisations preventing suppliers talking about future offerings. Over the years I have witnessed a huge amount of taxpayer' money going to procure dead-end technology because of this.

But at least the RFP approach keeps everything objective and impartial. Doesn't it?

Well, even this is doubtful. I can't help thinking back to the time when I tried my hand as a software salesman many years ago. I remember sitting there one afternoon, new in the job, flicking through a three-quarter inch thick RFP from a major UK utility company wanting a to buy database management software. My sales manager came up and asked: "Did you know what was going to be in that document before you opened it?"

"No," I replied, to which he matter of factly said: "Then just throw it away and do something more useful."

He went on to explain most RFPs are biased towards the supplier(s) with whom the prospective customer has a good relationship and effective sales activity takes place before the RFP is issued.

Over the years, these views have been shown to be true. Even when 'independent' consultants are facilitating the process, you have to assume that the consultant's relationship with some technology suppliers will be stronger than with others. It is unrealistic to believe this will have no bearing on the construction and interpretation of RFPs, especially when the consultant concerned has invested huge sums in building a practice around a particular product.

Some might say all of this apparent fixing flies in the face of the spirit of impartiality and objectivity the RFP process is designed to create. Suppliers who respond to RFPs that arrive out of the blue then find they never had a hope in hell of winning the business might subscribe to this view.

What if we waved a big magic wand and made it such that all RFPs were completely impartial from this point onwards?

Interestingly, this would probably do more harm than good. Many suppliers invest a great deal of time and effort working with potential customers to help them get their thoughts and ideas straight before the formal bidding process starts. This is especially common when new technology or concepts are involved and organisations are not shy of taking advantage of this 'free' consulting resource.

However, the concept of a free consultant is about as real as that of a free lunch. Suppliers invest in helping customers pre-contract in order to influence things in their favour by building relationships and getting prospective customers thinking their way. It would all be a waste of time if that influence didn't manifest itself in the form of an improved chance of winning the business - through a favourable RFP.

If RFPs had to be impartial, suppliers would have little motivation to invest time pre-contract and customers would then be denied free of charge access to some of the best consultants in the industry during the important formative phases of a project or initiative.

As importantly, customer and supplier personnel would not have the opportunity of spending time together and building relationships. Given that the success of projects is determined more by people than by technology, this would be detrimental to the quality of decision-making. It would undermine the ability of a buyer to qualify a supplier on the basis of culture, synergy and other important intangibles.

In practical terms, relationship building takes time and customers don't have the bandwidth to spend this time with more than a small number of suppliers. Unless they ignore the critical intangibles, which is not recommended, the RFP they produce will be naturally biased towards the supplier(s) they know and trust. This is not corruption. It is a reflection of the importance of courtship in building mutual commitment to a long-term relationship.

So let's not kid ourselves. While the RFP process serves the important role of ensuring that customer requirements and supplier capabilities are properly understood, the existence of an RFP is not in itself an indicator of impartiality. However, in the greater scheme of things, this is in everyone's interests and attempting to force impartiality will lead to poorer quality decisions.

If there is any doubt about this, just look at some of things that go on in the public sector.

What are your thoughts? Post a Reader Comment below or email editorial@silicon.com to let us know - or say what you'd like Dale to cover in future 'What if...' columns.

**Dale Vile is service director at analyst house Quocirca. His C.V. boasts years at Nortel Networks, Bloor Research, SAP and Sybase and his job now involves working with vendors and users wanting to tap the business benefits of technology. For more information see: http://www.quocirca.com

Past columns:
What if... we didn't have modern communications and IT?
http://www.silicon.com/a53871
What if... everyone always knew where you are?
http://www.silicon.com/a52368
What if... the sales and marketing director was put in charge of IT?
http://www.silicon.com/a51814
What if... 3G was available right now?
http://www.silicon.com/a51156