About a month ago I posted why the typical software-vendor ROI story should be filed under "fiction" and signed off by threatening to go after the RFP process next.Along the way to writing this I experienced one of those moments of clarity where all the complex and overlapping ideas I'd started out with just sort of fell away, leaving behind a single explanation, elegant in its simplicity:
RFPs are like job descriptions, and RFP responses are like resumesEvery day HR departments terminate employees whose resumes met every stated requirement on the job description. In many cases, the job description and the resumes it attracts all deserve to be filed under "Fiction."
As a buyer, the purpose of an RFP process is to allow you to differentiate between a selection of products to solve a particular need. By giving everyone a list of standardized questions, you're able to make decisions on a more objective basis. (If you work for one of our competitors, you can stop laughing now and just email me a copy of your resume--it'sckingsbury@hrmdirect.com.) Problem is, that's just not how it works.
The typical RFP either asks the vendor to respond to a series of "can your product do X" questions, or, in some cases, asks them to rate themselves on a scale of 1-5 or some such. About a year ago in When Bad Features Feel Good I wrote, "Successful vendors are successful because they build products that people buy. That's obvious but what's more often ignored is that people often don't buy the 'best' product objectively speaking." So let's add another item to the list:
Successful vendors are successful because they're better than everyone else at convincing people to buy their product.Just as a person putting "Java" on their resume serves as no guarantee that they are any good at programming in it, a vendor giving a positive answer on an RFP serves as no assurance that you'll actually like the product. You might think your RFP is so cleverly-written that we'll actually be forced into giving candid, clear responses--but remember, two can play at this game, and vendors get a lot more practice. After all, 80% of peoplethink they're in the top 30% in terms of driving ability.
My advice is to look at the RFP for what it is: a prenuptial agreement that should be taken seriously by no one except the purchasing department. It will not help you to differentiate in terms of vendors' abilities to deliver a satisfactory solution. It will help to differentiate between those vendors who have large sales departments and/or teams of proposal writers to respond to every RFP that hits their inbox and pass that cost along to you. Salesforce.com is illustrative in this regard: their most recent annual reportshows that in 2006, they spent 5 times as much on marketing and sales as they did on research and development. This represents an improvement actually, considering that the gap in 2005 was a factor of ten.
Just as requiring a Master's degree for a job which doesn't require one can have an adverse impact on your applicant pool, sending an unqualified, 30-page RFP out to two dozen vendors pretty much ensures that the responses you get will be composed mostly of the costly and the desperate.