Technology procurement has followed the same well-trodden path for decades. It harks from a time when IT procurement could move slowly - because it could. When technology projects could take years rather than months or weeks, and when investment decisions were multiple times higher than they are today. It's time for a change and a time to rethink one particular part of the process - the RFI. Here's why you should rethink the RFI process and the RFI template and do something better.
What is an RFI?
An RFI (also known as a Request for Information) is a common document issued at the start of a technology procurement exercise - often before the project has been signed off or any funding has been allocated. It's a mechanism to ask vendors for an initial approach to solving a specific business issue.
Why does the RFI process need to change?
The RFI process is commonly used at the start of a selection process - but it has some faults. Here are six reasons why we think the RFI needs to be rethought:
1) An RFI adds unnecessary delays to your project.
At a time when businesses are crying out for agility, adding an RFI process slows down the speed of solution deployment and ultimately to business benefits. A stereotypical RFI process has become a mini-RFP. It can take weeks and sometimes months for an RFI template to be found and approved for issue and distributed to the vendor community. It can then be a number of months before the RFI process is completed as vendors need to review and respond to the document and the internal team needs to review and select the vendors to progress to the next round.
2) A percentage of your preferred vendors will not respond.
An RFI can damage your chances of finding the right solution as a percentage of the potential candidates will fail to respond or will qualify out of your RFI process. This is also more common for the larger and more popular vendors - meaning that there is a chance that one of your key vendors will 'no bid'.
Why do some vendors choose not to bid? The exciting vendors, the ones who are growing fastest, simply might not have the team available to bid. The most prominent vendors might not feel the need to bid on an RFI and are too busy working on more advanced opportunities.
3) An RFI does not meet the usual sales qualification standards - so watch out!
An RFI is what it is - a request for information. It tends not to have a real project behind it at the time of issue and perhaps no executive support or funding - meaning that it fails to address most sales qualification criteria. If a sales team cannot qualify the opportunity - they will likely not gain the support of their management team to bid for the project - meaning no resources to complete the process.
Even the most basic sales qualification - BANT (budget, authority, need, and time)- will struggle to demonstrate why a vendor should bid:
Budget - there will be none.
Authority - there will be no executive leading the business case just yet.
Need - there is only a theoretical need - that's why the RFI is being issued.
Timing - there may be an intention to select a vendor, but no firm timing really exists.
4) An RFI response demands significant vendor investment.
Although this is often not appreciated by the issuing team, almost every RFI is a significant investment for the responding company. Even the most basic RFI process will need a number of the extended sales team to invest time if they wish to respond - these might include the salesperson, pre-sales consultant, technical architect, lawyer, sales manager, admin/response writer, and many more.
For small vendors, this is likely a really significant cost - both financially and operationally. They will consider bidding on the RFI but weigh this up against other opportunities or areas where the bid team might be able to spend their time more usefully.
5) Too much time is taken preparing the RFI.
One of the most googled procurement questions relates to finding an RFI template or how to write an RFI template. Multiple team members from across numerous departments can spend time writing and negotiating what goes into the RFI before it can be issued to the market. We have seen this process take months.
6) Asking for a solution rather than posing a problem.
Although the phrase 'request for information' might sound like a question - invariably the RFI is written with a solution in mind. As such, it is posing less of a question to the vendors, and more of a request. In other words, it is becoming more like a smaller version of an RFP (request for proposal).
At the early stages of technology procurement, it's really important to conduct a simple and honest market assessment. It should be all about posing a problem and asking for ideas to solve that problem with a technology solution.
A time to rethink the RFI
At Viewpoint Analysis, we act as a Technology Matchmaker and help businesses to find and select technology to meet their needs. We never suggest that a customer issues an RFI - for all the reasons above. Our suggestion is to keep it really simple and issue a problem statement (take a look at our Project Matchmaker). Work with your local vendor community as a partner. Tell them why you are looking to speak to them and what challenges you face. Issue a very short problem statement - no more than 3 or 4 pages including the background to your business.
By keeping things simple and working with your vendor as a partner and not as a supplier, you gain so many advantages. Will they want to help? Yes. Will they see this as a difficult process? No. Will they need lots of resources? No. Will they qualify the opportunity still - yes, but they will understand that this is something worth looking at because it might spark a real project.
By ditching the RFI (or rethinking what an RFI might mean to you), you can see the following benefits.
Dramatically reduce the time to vendor selection.
Have your vendor contribute new ideas and suggestions.
Ensure that 100% of your potential partners respond to you.
Find solutions and ideas you had not thought of.
Reduce the amount of time your extended team needs to spend on the process.
Impress your leadership team as they see the process moving at speed.
An RFI process should never play a role in technology procurement - there are alternative approaches. At the early stage of the selection process, when you are looking for ideas and inspiration and seeking to understand what's out there, try something different. Stop hunting for the RFI template on Google and start hunting for how you can improve and shortcut the process for the benefit of your team, your department, and your company.
Here at Viewpoint Analysis, we know the RFI process from the point of view of the seller, and from the procurement side - it's not pretty. If you want to look at how we do things, take a look at the Project Matchmaker service for a really different approach to an RFI and either let us know if you need our help, or go ahead and it a try and see how you can replace that RFI.