Breakthrough Project Success: 2 of 4, IT Vendor Proposal RFP

While we won’t cover a detailed breakdown of RFP sections or RFP strategies in this part, we will hit on some of the high points. These high points, together with a few ways to neutralize some of the vendor sales strategies, ensure you are getting the best vendor or resources for the job.

The stage of finding a vendor is probably the most intense for any company. The company needs to prepare extensively to get a solid RFP that can set the stage for breakthrough results and solid payback for your technology investment.

The key foundational activities for a good RFP include a solid business case, a clear statement of scope and then the development of the RFP itself. Some guidance can be found here in this article: ERP and SAP business case for ROI, business benefit, and success.

What Type of IT Vendor, System Integrator, or Implementation Model

One other thing to consider during the RFP process is what type of vendor or implementation model you are looking for in your proposal. You have a variety vendor options available, each with their own strengths and weaknesses.

You may wish to employ a well-established system integrator or a “boutique” consulting firm, or you may decide to completely manage the project with your own selected staff of contractors. Alternatively, you could consider a hybrid approach. If you are considering the contractor route of staffing a project yourself, you might wish to review the screening methods to find the right consultant in Part 1 and Part 2 of a separate series.

You will also need to determine your project implementation model. Will you take a pure time and materials approach, or you will use a fixed fee, or time and materials with penalties for under-delivery (over budget, over time) and rewards for over delivery (under budget, early), or time and materials with cost controls, or a blend of these approaches?

You may wish to include what experience you want in the consultants for your RFP as well. For example, you might insist that the team leads have small- and mid-sized business (SMB) implementation experience and production support experience. Why are those important? From what I have seen, the SMB consultants have the deepest module and troubleshooting experience. Consultants with production support experience understand ahead of time some of the problems a company will face after go live and can address these issues during the implementation portion of the project. At the end of this post, I have included a list of articles from my experience doing production support about the areas I have seen over the years that cause the most pain after you go live.

Since consultants will be guiding your business, dealing with sensitive company information, and helping to set a new direction and focus, you need to ensure that you are getting the consultants you are paying for and not the fakes, frauds, or con artists.

Dealing with System Integration Vendor Proposal Methods

Bigger system integrators tend to rely on the “wow” factor of fancy customer lists, huge size and scope, and other factors that may not always translate into a better solution for your business. In the end, you have to ask yourself what really matters to you as a company. Is it flashy presentations that show off how great the vendor is, or is it delivering real results for your business with the people they bring to the table? Sometimes the large vendors or system integrators will be the ones to deliver results, but sometimes they won’t. The real question then is how do you ensure you are getting what you pay for, whether you are looking at a “Big X” vendor, a smaller boutique firm, or even staffing and running your own project?

Here are some steps you can take to neutralize some of the sales pitches and focus on what really matters:

1. 1. Determine in advance a list of business requirements you. These should be the guiding reasons for the technology spend and basis for your whole project. Understanding the business goals which are behind any of your company KPIs helps focus technology investment.

1. 1. Develop a rational scoring protocol that addresses how well a vendor adhered to your RFP. Score the vendor by section, and weight the score to what is important for your company.

1. 1. Set a slide presentation limitation. For example, no more than fifty total slides for the actual presentation and no more than another fifty slides for an Appendix of supporting information. If a vendor cannot capture the important items to your company and its results in fifty slides (rather than touting how great they are), they may not be the best fit.

1. 1. In your RFP, you should explicitly state that customer qualifications and customer references can only come from the specific resumes of the consultants being proposed for the project. If the customer list doesn’t represent the skills and talent they are proposing for your project, why do you care who else they have done business with? You may also wish to note that any deviation from this will be scored harshly. After all, who really cares if the company has worked with every one of your competitors if none of their consultants will be working on your project?

1. 1. During the Vendor presentation, require an actual demo of some of the system functionality. This demo ensures that the vendor will bring actual knowledgeable consultants to the proposal, because they have to take the time with some of their internal resources to set the demo up. Additionally, they need some of their knowledgeable consultants on site to show you the system functionality and answer questions.

1. 1. Ensure that the vendor provides the implementation tools and samples of each of the templates and resources they use for the project. Offer to sign an NDA to eliminate any of their arguments about proprietary information.

1. 1. Include a provision in the RFP that unverified or unverifiable claims of business benefit will be scored harshly. You may wish to note in the RFP that if a statistic or a reference to benefit is noted anywhere in the vendor’s presentation, whether on paper or during any oral presentation, the vendor must support this claim with an authoritative or verifiable source. Otherwise, the claim will count against them. Unfortunately, vendors routinely promote questionable or unverifiable results and statistics to try to persuade you. The practice is fine so long as it is legitimate. If a vendor claims they helped company “X” gain “Y” benefit, then insist that you need a verifiable source for the benefit, how the baseline for the benefit was established, and how the change was measured. You may even wish to include such a provision in your RFP to the vendor, so they know your expectations up front.

1. 1. Require that the system integrator or staffing firm provide an affidavit attesting to verification of consultant skills and background. Many attorneys can draft a sound verification affidavit that covers the due diligence used for screening project resources. If you are a public company, your executives have to sign off on financial statements under penalty of the Sarbanes-Oxley legislation (in the U.S.), so you might as well have your implementation vendors do the same. If they refuse to do solid background checks or verifications, why do you want them at your company?

1. 1. Have an explicit contract provision that your implementation vendor may only provide contract resources from the vendor’s direct staffing partners. That contract agreement should state that those staffing partners may not use additional, more distant staffing partners. As you move further away from the immediate implementation vendor, and as each partner takes their “cut” of the rate, you end up with more and more fakes. After you begin to move further away from your prime vendor, everyone’s “cut” reduces the final rate to much less than a normal market rate to the end contractor, and any contractor with real experience will only go so far in rate concessions even in a down economy. As a result, you only attract fakes, cons, and liars.

1. Include a provision in the RFP that asks the vendor to describe their process for handling less than ideal or less than optimal consulting resources. Ensure that the provision includes specific language noting that you would like to know their approach and policies on credits as well. In this provision of the RFP, explicitly state that this section will be scored heavily, so an inadequate policy may affect the overall decision process. You may even go so far as to note that even if the vendor scores well, they could be disqualified for not having a reasonable policy here.

These techniques are designed to set a clear expectation about the quality of resources the vendor provides and the quality of the project you expect. By using these techniques early on, you set the stage for success and have the greatest opportunity to achieve breakthrough results with your technology investment.

These techniques heavily emphasize finding the right resources. After all, the people delivering the project and influencing or affecting the direction of your business are more important than the vendor behind them (so long as that vendor is reputable).

After developing your RFP, the next stage is to determine the list of vendors you wish to submit to. You may even wish to throw in a couple of wild cards to the normal vendor selection, just to get a different perspective from another type of vendor on how they would do your project. The more knowledge you gain early in the process, the more sophisticated of a client you become. The more sophisticated you are as a technology customer, the better your results will be.

To achieve those breakthrough results, ask yourself what is important to you as a business, and what you need to achieve that. Be sure to build those expectations into your RFP somewhere and score them accordingly. In the end what really matters is that you achieve the results you expect.

Some of the Biggest Production Support Problems with Your SAP Project to Avoid:

Planning For a Smooth SAP Go-Live: Part 1

(Introduction, Security and Authorizations)

Planning For a Smooth SAP Go-Live: Part 2

(Master Data, Data Transformation Methods

Planning for a Smooth SAP Go-Live: Part 3

(Process Issues, Blueprinting, Testing, and Change Management)

Planning For a Smooth SAP Go-Live: Part 4

(Custom Development, Costs and Consequences of Inexperienced Developers)

Four Part Series:

Achieve Breakthrough ERP, SAP, or IT Project Success: 1 of 4
Breakthrough Project Success: 2 of 4, IT Vendor Proposal RFP
Breakthrough Project Success: 3 of 4, Vendor Selection and Contracts
Breakthrough Project Success: Part 4 of 4, Last Low Risk Chance for Results