RFPs a necessary evil in procurement process
Request for proposals (RFP) remain at the heart of the modern tendering system for software products, and are often filled with stress for all parties. Many of us would prefer not to labour through these long, complicated and protracted experiences, but if anything they are becoming more important.
The need for competitive tendering is obvious in a government context, as crown agencies must show a transparent decision-making process and follow best practice. Principles enshrined in the Ministry of Economic Development’s ‘Mandatory Rules for Procurement by Departments’ require attention to be paid to “best value for money over whole of life; open and effective competition; full and fair opportunity for domestic suppliers; improving business capabilities, including e-commerce capability; recognition of New Zealand's international trade obligations and interests; and, requiring sustainably produced goods and services wherever possible, having regard to economic, environmental and social impacts over their life cycle.”
In the private sector, governance requirements in most large organisations simply make an RFP unavoidable. Everyone from the board to your legal department needs proof of a commercially objective decision, and a process designed to deliver competitive pricing.
The electronic age is also putting a premium on transparent decision-making. Electronic audit trails and the ease of discovery make any selection, no matter how commercially sensitive, potentially open to the media, stakeholders and other interested parties.
Real attention has to be paid to running a comprehensive and transparent evaluation and selection and negotiation of software solutions. Running an effective process can remove the emotion from the decision, getting the best possible match to business needs and avoiding being unduly influenced by the slickest sales people. For vendors, they are getting an “apples with apples” evaluation against their competitors’ products, and are willing to invest time and effort competing for your business.
To find out more about how to inject objectivity and fairness into the RFP process, download our white paper “Can RFP stand for ‘really fair process’?” here.