As an online benefit administration vendor, we respond to thousands of inquires about products and services. These requests come in all shapes and sizes, ranging from a single question to a lengthy Request for Proposal (RFP). Regardless of the method used, the goal is the same – to determine if a vendor’s product and services meet the needs of a company prior to making a commitment to purchase.
But not all methods are equal.
Before embarking on a journey to solve a problem, it is critical to clearly define the issue. A shocking number of companies conduct evaluations without truly knowing the problem(s) they need to solve. Other times, they know the core problem, but during their evaluation discover features and functionality which distract their attention.
Benefit From Our Experience®. Before you ask vendors how they can help, start by answering this critical question:
What problem are you trying to solve?
While the question is simple, the answer is often not. In fact it can be downright scary. But without defining it, the likelihood of wasting time, money and resources increases and the odds of success decrease. Solutions are not a one-size-fits all and it’s important the solution you ultimately pick solves your problems.
We’ve assembled the following recommendation for companies and consultants to help get to the root of the problem and yield better and faster results:
Skip the Formal Request for Information (RFI)
An RFI is a fishing expedition to determine if a vendor is worth engaging in further conservations. In today’s world of digital information, skip this step and look at the content on a company website. If you’re still unsure, see step 2.
Begin with a Conversation
Start by having a dialog with several different vendors. You may be at a disadvantage not fully knowing the problem or the solutions available, so take advantage of the knowledge this “Product Expert” can provide. A good sales person should ask the right questions and help you get to the root of the problem that needs to be solved. These conversations help focus both sides and vendors will often direct you to products which are the best fit, not necessarily their own.
If the person you speak with doesn’t take the time to ask you questions about your company, culture, benefits, disparate systems and processes to get a full picture - run and run fast. If they can’t take the time to learn about your unique challenges and provide an objective education, will they be a good long term business partner? Make them earn YOUR trust by proving THEIR knowledge.
Dig a Little Deeper
If you haven’t selected your vendor by this point, you at least have a better idea what you’re looking for in your ideal solution. Now it is time to issue an RFP.
Here are some tips for dos and don’ts with RFPs:
The Kitchen Sink RFP: There is nothing wrong with using an off-the-shelf RFP as a starting point, but cookie cutter RFPs are extremely broad and don’t maintain focus on any one problem. Important considerations get buried in mass questionnaires and vendors unknowingly provide too few details about important processes or services.
DO: Take some time to tailor it to your situation.
The Near Sighted RFP: Don’t focus your search on finding a vendor that solves a problem a certain way. Vendors have a good reason for engineering a process a certain way. It’s better to focus on the destination than a specific path to get there.
DO: Ask your vendors for a map. You might find there’s a faster or easier route.
The Unorganized RFP: Some questions are straightforward, others are not. When it’s not clear, vendors look to surrounding questions to give them context. Without this context, the best we can offer is a generic response, which doesn’t benefit either party. It’s impossible to gauge how one vendor can do a process better than another, if the right questions aren’t asked in the right way.
DO: Organize questions into sections by topic and think of the order of questions as an outline.
The Due Diligence RFP: An RFP is an investment in time, money and resources from both sides. As a vendor, nothing is more frustrating than spending countless hours on a proposal only to find out there was a pre-selected winner.
DO: Tell the “due diligence” vendors you need pricing comparisons to negotiate price or justify costs. You may be surprised at the response.
The Apples to Oranges RFP: Final decisions often come down to price. Not all vendors pricing models are the same. Without structure, it is difficult to make apples to apples comparisons.
DO: Include a pricing matrix in the RFP, especially if this is THE critical decision point.
Once you’ve collected all your RFP responses, don’t be shy about seeking clarification again and again until you are satisfied you have all the details you need. While nobody wants to drag a process out longer than it needs to be, companies that make decisions solely on written responses may make assumptions about product and service capabilities which are later proven untrue (see recommendation 3d). Again, the goal is to find the right solution for the problem and by skipping this step, you might rule out the best solution.
Bigger Isn’t Always Better
Take the time to become familiar with prospective vendors’ business profiles. The history of a company, including whether they are public or private, impacts business practices. What motivates the vendor? Is it system growth? Is it recognizing results for shareholders of the company? Is it coming up with creative solutions to their unique client needs? Weigh this information against what’s important to your company. If you want the prestige of working with a big name company, that’s one thing, but if you’re looking for partner who takes pride in being nimble, responsive and service-oriented, that’s something different.
Selecting a vendor partner may feel like a daunting task. After all, your neck and your reputation are on the line. Rather than stress about it, go into the process as you would if you were purchasing something for your home or family. Don’t hold back on asking questions or providing important details for the sake of preventing a sales pitch. Seize the opportunity to utilize expert resources to create greater clarity about the problem being solved and the potential solutions available. The evaluation process is a test drive so you feel confident you have a clear understanding of how a vendor’s product and services are going to make your situation better. In the long run, being more forthright and organized upfront can save you time, money, resources and frustration in the end.