When scanning over the words ‘please respond to RFP’ in an email, I cringe a little and shift uncomfortably in my chair because I know what I have to do next – explain why we simply do not and will never respond to traditional requests for proposal.
Why, you ask?
One very BIG reason…
The traditional RFP process is broken.
A Request for Proposal, commonly referred to as RFP, is a process businesses typically use to ask vendors to bid on the business’ upcoming project. We understand that many times this process is required by companies and your hands are tied – you have to send out an RFP. We get it. You’re doing your job and that’s okay, however the traditional RFP may not yield the quality vendors you need for your project.
Usually, RFPs are disorganized and lack context about the people involved, as well as the underlying business problems that need to be addressed. What happens time and time again during the traditional RFP process is the response with the best presentation or the lowest cost is selected. For custom software projects, where the normal failure rate is 60-70%, do you really wanna gamble your project on a broken process?
LACK OF TRUST-BUILDING
The traditional RFP processes doesn’t naturally facilitate partnerships. In fact, they put parties at odds with each other and attempt to commoditize a process that requires trust. Trust is something that has to be earned by the software development team and the client (you) over time. Simply replying to one document with another document doesn’t help develop that trust. Time must be committed by both parties to build rapport and get to know each other. Without allowing the time up front to talk and understand your business, you’ll end up spending more time later on trying to fill in the holes that were missed or headed down the wrong path, ultimately leading to project failure.
Speaking of time, there’s really none to waste in software development. When requirements for a system are based on guesswork and unclear, responding to these traditional RFPs puts our team and our clients’ time at risk. From our point of view, taking talented team members away from client projects to spend unpaid time trying to pull together estimates for these fuzzy requirements doesn’t make business sense.
FrogSlayer receives over 300 new project inquiries a year, in addition to recurring work from our existing clients. Responding to these simply isn’t worth our time. We’ve spent over a decade assembling one of the most talented teams in the industry and honing our way of doing things to a point that allows us to deliver more value faster than any other team. Our clients understand the value of upfront discovery and consulting – they know that FrogSlayer always delivers significantly more value than the fees we charge.
RFPs don’t give an apples to apples comparison. You’re not buying widgets. Firms have unique capabilities and differentiators. For instance, FrogSlayer has a reputation for delivering working, reliable custom software faster than any other team. We’re not the cheapest, we don’t use an offshore model, we don’t build-to-spec, etc. Other firms take different project approaches or have different capabilities. You have to tease this sort of information out of the companies you’re looking at. This is difficult to do in an RFP. Your best bet is to pick up the phone, have a conversation, ask questions, and let the firm ask questions back.
So, what does an effective RFP look like?
This might sound crazy, but effective RFPs actually ignore project details, cost, and schedule.
To select the best partner, you should focus your RFP on understanding the vendor’s company and their team. Below is a sample outline:
Understanding a company’s background will give you a better look at the individuals you’ll be working with. Knowing why and how a company was created can tell you a lot about their values, beliefs and motivation. Additionally, employee stats will help you determine how long people have worked together; teams that have experience together tend to be higher performance teams.
Financial and client stats, on the other hand, will give you a good idea of the health of the business. Profitability is a good indicator of stability, usually indicating lower rate of mistakes or project failures and a strong ability to capture new work. Growth is also a good sign of stability and health.
Not many vendors will be willing to give this info to you, but you’ll quickly see who takes transparency seriously.
- Brief History
- Years in Business
- Ownership Structure
- Are owners employees?
- Are they active in running/managing the firm?
- Years of Experience
- Retention Rate
- Financial Stats
- Revenue per employee for past three (3) years
- Profitability compared to peers
- Working capital
- How cash rich or cash poor are they?
- How much debt do they have?
- Growth rate for past 3-5 years.
- Total Clients served in past three (3) years
- % of Revenue from largest customer for the past 12 months
Find a company that stands for something bigger than themselves. Companies that invest in their people and get recognition mean that they care about their people. When you have happier people in creative-based work, they are more productive and innovative. Unhappy people is an indicator of “death march mentality” and bigger issues related to ongoing project failures.
- Best Practices
- Hiring/Recruiting Approach
- Professional Development
- Learning Program?
Past performance is the best predictor of future success. Including this section is a direct way of asking about their past performance rather than asking them to speculate about the details of your project. You want to make sure the vendor really understood and addressed the business goals of their client, not just able to spout a bunch of technical jargon.
- Size of Project
- Client References
- What was their most successful project? Why was it successful?
- What was a project that failed and why?
- What was the final outcome?
- What actions did they take to correct the failure?
- Was further work done for this client?
Proposed Project Questions
Finally, make sure the vendor understands your problem. This section will reveal their thought process, as well as how they approach projects.
- What is the risk?
- Any assumptions?
- Who is the proposed team?
- What is their approach?
- What are their technical practices?
- Do they offer support?
- Future Features
- Bug Failures
- Response Times
- Hosting & Monitoring
Don't forget to check references.
I cannot stress this enough. Always check references before moving forward with a team.
Ask the reference the following questions:
- Who did you communicate with on the team? Look for regular, effective, direct communication with the people that did the work. An account manager intermediary can be problematic.
- How often did you receive a new release that you could evaluate? Once things are rolling, a weekly release is totally possible but often rare. Monthly is the longest you should tolerate.
- How was your feedback on handled? Was it documented and then acted on?
- Were you able to steer development and influence features? The team should be able to accommodate new ideas and refinement of features as you go.
- Were you given regular status reports that included the amount of work accomplished and the work remaining?
- Were you surprised at any point during the engagement?
- How often did you hear things like “we can’t do that because you didn’t tell us earlier?”
- Did your project run over-budget or was their initial cost estimate accurate? Budgets aren’t always fixed, so this may be a complicated answer.
- How did the team make estimates? Were those estimates accurate overall? Any single task estimate may be off, but in aggregate, over a larger body of work or longer period of time, estimates should be pretty accurate.
- Were you actively encouraged to limit the scope of your application? Clients usually err on the side of wanting to build too much. Building less and getting a product into customer’s hands earlier is often a better strategy.
Are they the right fit?
Honestly, knowing if a vendor is the right fit comes down to trust and comfort. Do you communicate well with their people? Do you feel that they understand your business and your challenges? Do they ask good, smart questions? If you answer yes to all three of these questions, it’s safe to say they are likely a good fit for you and your company.