I’m not knocking dating web sites. Lots of people use them to find true love. But the idea that the best way of finding a soul mate is to specify a series of partner preferences based on what you already like? And then apply those choices to a tiny universe of candidates? I’m not buying it.
But that’s exactly the approach the majority of companies apply when they’re looking for an IT outsourcing partner. The request for proposal (RFP) and tender process is a time-honoured way of describing what you want from a supplier.
But it’s also a resource-hungry way of creating the illusion that you’re managing risk; and tracking down the ideal IT partner. No wonder 65 per cent of outsourced deals fail to meet their promises and finish early. So what’s gone wrong?
The core problem is that an RFP is usually just box-ticking. It’s almost designed to rule out a coherent, strategic conversation with suppliers. And if your RFP turns out to be biased in favour of big brand suppliers – well, that’s a safe mistake to make.
But it’s still a mistake. Less prominent firms, the revolutionary consultancies without baggage around platforms and pre-prepared solutions, might offer approaches much better tailored to your business.
We see companies spend six to nine months just working out what they want to ask. That’s a massive amount of negotiation between business and IT decision-makers – before they even have the first meeting with the people who’ll end up running that part of their business. If the decision rests on only the RFP criteria, why innovate?
Any IT contract ought to have a transformative effect on your people and capabilities. That’s particularly true now that disruptive technology is a defining facet for every business. Companies recognise the need to bring in technology experts to help them become agile. But the RFP is often more focused on a list of outdated prerequisites than open-minded thinking in support of higher-level strategy.
A richer approach sees you locate a supplier who can understand your transformative journey, instead of spending the majority of your time debating the RFP internally, you spend 10 per cent of your time articulating what you need internally, 20 per cent sharing ideas and innovating with the supplier and the maximum time actually working together. (It’s like flat-sharing with your partner before you get married). If the supplier doesn’t hit their targets? Well, you’ll have experimented in delivering immediate tangible value that no traditional RFP would generate. Both parties walk away wiser.
And if it’s working well? You’ve had meaningful time together – not just a few hours of tender pitches – to understand the personalities and see the delivery on each other's promises.
The year-long RFP, like the dating site questionnaire, helps you tick some due diligence boxes. But a good IT service deal, like a good marriage, should be based on growing and learning together, not just trying to fix yesterday’s problems or play it safe. If you want real value and innovation, it’s time to revolutionise the RFP.
☛ Anthony Lamoureux is director of IT consultancy Velocity