The IT RFP process may not be replaced entirely but it can certainly be improved.
Digitisation is rapidly transforming, and in some respects, threatening the ways in which companies operate. From comparison websites to self-service utilities and commoditised insurance, customers of all sectors now expect access to brands through whichever channel they choose at any given time.
These disruptions need not be a threat however, if handled correctly. The common thread through all of these examples is that customer experience has become key. Rather than a hygiene factor or best practice objective, it is now the primary differentiator that organisations must organise themselves around, and often the only one remaining in commoditised markets.
Such a fundamental objective brings with it multiple stakeholders. Heads of customer experience, COOs, CMOs, CCOs and contact centre heads are all just as likely as each other to investigate how to improve the customer experience – and if the challenge is precipitated by technology, then so must be the solution.
Suddenly, responsibility for enterprise technology is no longer solely the responsibility of the CIO. But if technology becomes the solution to a broader range of problems, and an investment that so many stakeholders depend on, then how should this affect the way it is selected and procured? And how does this compare to the reality?
During the internal planning phase, many businesses will be highly creative, collaborative and objective. The individual consumer will rightly be the focus of the decision-making and the plan will be meticulous in remaining true to the end goal and the overall business objectives.
Progression from the RFP
However, once the plan is built and the precise need is identified, it has to be forced into an outdated process that undermines these good intentions: RFPs. All the strategy and concept requirements that have been identified by the company’s leadership team simply can’t translate into a traditional RFP format.
The firm adherence to the traditional structure of RFPs results in the organisation’s strategic ideals being quickly diluted, as the obsolete way in which IT services are typically procured cannot reflect the modern, integrated thinking required by both the enterprise and its potential suppliers.
This inevitably results in underperforming enterprise IT projects that damage trust in technology and impact the appetite for future investment and development – and clearly this has to change.
Sources of the problem
Earlier this year, I was involved in a research project, looking at all RFPs received for strategic IT projects over the last 18 months. The analysis set out to determine the degree to which modern day enterprise RFPs encouraged innovation, established a platform for future technology developments and supported overall business goals such as improved customer experience. In essence, to what degree is the RFP process stifling the creativity and collaboration that has rightly become part and parcel of the modern enterprise’s ambition and IT function?
The RFPs examined were briefs for strategic, complex technology projects from UK enterprises across several verticals. The projects covered a wide variety of solutions, ranging from telephony and contact centre technology to cloud migration, managed service contracts and API design and development.
The findings were surprising, and found that RFPs are overly IT-focused, neglect wider business goals, stifle partner innovation and fail to guard against the future. In fact, they revealed that the enterprise IT RFP process requires urgent review if it is to enable organisations to use technology to meet business challenges effectively.
In particular, it aimed to quantify the adherence to four key tenets that I believe to be essential to successfully scoping an impactful technology initiative.
1. A firm focus on the enterprise’s end customer and core business
The figures were revealing from a customer-facing perspective. Only 30 per cent of RFPs for customer-focused projects required measurement of how the IT project would materially improve the customer experience, with the remainder focusing on IT metrics instead. Uptime and ISO certifications were deemed more important than whether the project actually improved customers’ journeys.
From this, it’s clear that the overwhelming majority of RFPs are developed in ‘IT isolation’, with no one ‘from the business’ overseeing whether the ultimate objectives are being met by the RFP.
2. Collaboration throughout the wider organisation and with strategic suppliers
Related to the above, amongst the key findings was that just 14 per cent of RFPs showed any evidence of collaboration between IT and the wider organisation in their construction. This then leads to less appetite for innovation as the RFP makes the project entirely IT-focused and functional. Indeed, just 18 per cent of enterprise IT RFPs permitted or were truly seeking innovation, and even fewer permitted a strategic partnership.
3. Establishing a platform for the future
Inevitably, three-quarters of the RFPs had inherently future-looking objectives, such as replacing legacy technology or enabling new strategic initiatives. Ironically however, despite these RFPs clearly being triggered by issues arising from outdated technology, fewer than half (43%) gave any credit to respondents outlining how they would future-proof their proposed approaches and provide best value. This would certainly have been discussed by the business at the planning stage, but once the need was forced down an RFP process, this element is seemingly lost.
A way forward
Put simply, the current enterprise IT RFP process is not fit for purpose. Discussions with CIOs and others in similar roles make it clear that although modern strategic thinking is there, it is constrained by antiquated processes such as the RFP, which has barely evolved in decades.
Business strategies that focus on collaboration, customer centricity and future proofing are remarkably underrepresented in a typical RFP. The process is too rigid, restrictive and defensive for business ambitions to be reflected, or for the supplier to act as an innovative partner, jeopardising the ultimate success and commercial benefit of the project.
For many industries, customer experience is one of the last differentiators available to them, so enterprises can ill afford to limit the potential of technology projects intended to enhance this service delivery.
Realistically, the IT RFP process is unlikely to be replaced wholesale. But it can be improved. Over-specifying technical requirements, restricting dialogue with prospective partners and an over-reliance on a scorecard procurement process all create excessive focus on the IT elements of a project.
Rather than restricting potential respondents from demonstrating innovation and thought leadership, enterprises must now make strong steps to adapt the current outdated RFP process, without jeopardising impartiality, legal protection and cost controls.