Organisations are becoming more adventurous in the way they integrate technologies. Digital transformation is the new normal – data analytics, machine learning, IoT, collaboration and wider use of APIs are now on the must-have lists of the majority, not just the experimental trailblazers. Architected and integrated effectively these technologies allow consumer facing organisations to improve business processes, add new services and make their internal teams more efficient all while inspiring loyalty in their external audiences.
Such fundamentally transformative objectives for modern IT require an outcome based approach to procurement. However, there are still an alarming number of companies that rely on the traditional capability check list approach to securing external IT providers rather than taking the opportunity to ‘audition’ potential partners and truly test their expertise.
On the whole, IT procurement has remained function-orientated rather than outcome-based. Assessment of vendors is still focused on technical metrics, not their ability to satisfy specific corporate and commercial objectives. In many cases, by the time a potential partner sees the requirement, the link between the business objective and the IT objective is lost. There’s so much focus on the IT objective that suppliers can’t see the context of the business challenge being posed in traditional RFP documentation. Without that strategic view of the big picture, how can we design the most elegant solution for the entire organisation?
As we showed in our investigation The Enterprise IT RFP: New dogs, old tricks, rather than ripping up the RFP process and starting again, it needs to be amended. There are three key focus areas that will help organisations ensure business outcomes remain at the heart of supplier selection:
1. Project sponsorship
Sponsoring a project is about more than securing budget and being responsible for updating the business on progress. Being a project sponsor should also involve engaging with the suppliers to discuss, confirm and possibly adapt the project’s stated objectives. In our experience the best results are achieved when the IT sponsor (usually CIO or IS Director) is available throughout the procurement to delivery phases of a project. Their access to senior decision makers across the business (not just in IT) ensures that clarity about what expected IT outcomes will achieve are understood by all stakeholders.
2. Think outside of the IT silo
To respond to the brief in the most additive way, suppliers need to fully understand business objectives. This means having access to not only a sponsor, but also the business heads for whom this project will be most impactful. Crucially, this access must come early in the process, not just the evaluation stage. It is only through inclusive discussion that the project can move from a simple deployment of technology to an initiative that brings tangible commercial outcomes to the organisation.
3. Scoring– are you measuring the right things?
All this access and focus on outcomes is for nothing if suppliers’ adherence to them and ability to meet them is not part of how they are evaluated. Too many RFPs currently put more weighting on technical metrics than whether the supplier can deliver on the organisation’s core objective. When evaluating proposals, we would recommend the following weighting:
|20%||Demonstration that the supplier understands of the objectives and has tailored their approach to meet them|
|20%||Recommendation of practical solution including design, delivery, implementation and management|
|25%||Practical evidence that the supplier can produce the expected results; not just in terms of deploying similar technology, but also showing where they have helped organisations meet similar strategic goals|
|15%||Futureproof innovation – how will the supplier regularly demonstrate innovate thinking throughout the term of the contract, not just at the beginning?|
|20%||Commercials. Look out for a willingness to share risk|
|0%||Corporate due diligence. Corporate elements are important but should be considered ‘hygiene’ to an RFP response|