As organisations become more agile, they are able to respond faster to customer expectations. Creativity and a more collaborative approach are being actively encouraged throughout the enterprise to improve customer experience. This means that multiple stakeholders are now responsible for delivering customer-centric innovations where technology is the key enabler. So has the way in which we procure IT products and services changed to reflect this new integrated thinking?
Not according to our new report, The Enterprise IT RFP: New dogs, old tricks. In fact, after analysing all the RFPs we’ve received for strategic IT projects over the last 18 months, we’ve identified some worrying signs that the IT RFP process is so outdated that it’s no longer fit for purpose:
1. The IT RFP process doesn’t encourage suppliers to innovate
Initial internal discussions about customer initiatives tend to be very receptive to new and different approaches. However, this open-minded attitude is not being taken forward into the IT RFP process.
Over 60% of all the RFPs included in the research either made no mention of innovation or actively sought to restrain the supplier from being creative. Instead, technology frameworks were scoped out upfront, meaning that suppliers were unable to suggest alternatives. Of those RFPs that did require innovation, over half mandated such a formal client-supplier relationship that the opportunity to demonstrate a more creative approach was severely restricted.
2. The IT RFP process doesn’t include enough customer-centric metrics
The majority of projects were customer-facing, so it’s no surprise that 74% had a clear customer-orientated objective. However, fewer than half of these provided formal metrics to benchmark improvements to the customer experience. This means the RFPs only encouraged suppliers to work to the technical brief, rather than deliver tangible benefits for the end customer or meet strategic business objectives.
3. The IT RFP process is being driven by the IT team alone
Everyone gets involved in the internal planning phase of the project. All relevant departments, stakeholders and managers agree business objectives and solution outlines. However, as soon as the RFP process starts, this collaboration stops. Only 14% of the IT RFP’s analysed showed any evidence of wider consultation with other business units. So instead of productivity, cost efficiencies and service delivery improvements, the RFPs focused on technical design and IT metrics.
4. The IT RFP process isn’t future proofing technology investment
Ironically many of the projects involved updating legacy technology to enable new initiatives but fewer than half the IT RFPs asked suppliers how they would future proof their approach to ensure it stayed relevant and valuable going forward.
The full findings of the research reveal that while organisations are doing all the right things to develop customer-first operations and services, the current IT RFP process is letting them down. It is not capable of supporting the IT innovation required to transform customer experience.
What’s more, the fact that the process is broken could be stifling opportunities to collaborate in the cloud on more forward-looking and strategic initiatives. As a fundamental and well-established process in IT procurement, the RFP isn’t going anywhere but it must adapt to keep pace with the needs of organisations, especially those looking to make customer experience their key differentiator. The second half of the report suggests how this can be done without jeopardising the legal and other protections the process offers and provides a checklist of areas to consider when procuring enterprise IT projects.
The nature of enterprise IT projects has changed, but the processes used to procure IT products and services have not.
The current RFP process is too restrictive and prescriptive to allow suppliers to innovate and demonstrate a more creative approach.
The RFP process is often led by the IT team in isolation from the rest of the business. This means that it tends to focus on technology requirements rather than business transformation.
IT RFPs need to include more customer-centric metrics to ensure that technology projects meet business objectives rather than just the technical brief.
IT RFPs need to protect the long-term value of the technology investment by asking suppliers to demonstrate how they will future proof solutions.
Download the full report and find out how to update your IT RFP process