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No RFPs! Why requests for proposal are bad for business (and how we can stop them)

No RFPs! Why requests for proposal are bad for business (and how we can stop them)



Originally presented at DrupalCon Denver (March 20, 2012).

Originally presented at DrupalCon Denver (March 20, 2012).



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    No RFPs! Why requests for proposal are bad for business (and how we can stop them) No RFPs! Why requests for proposal are bad for business (and how we can stop them) Presentation Transcript

    • No RFPs! Why requests for proposal are bad for business (and how we can stop them)Crystal Williams, Brian Skowron, Todd Nienkerk, and Zach ChandlerDrupalCon Denver | March 20, 2012 #NoRFPs
    • Who we are #NoRFPs
    • Who we are• Crystal Williams• Brian Skowron, Lullabot• Todd Nienkerk, Four Kitchens• Zach Chandler, Stanford University #NoRFPs
    • Who we areFavorite RFP memories #NoRFPs
    • Why RFPs? #NoRFPs
    • Why RFPs? ➜ Good reasonThe Good ReasonThere’s work to be done, and a customer is lookingfor vendors to help #NoRFPs
    • Why RFPs? ➜ Bad reasonsThe Bad Reasons“That’s just how we’ve always done it” #NoRFPs
    • Why RFPs? ➜ Bad reasons“I think I’m supposed to write an RFP” #NoRFPs
    • Why RFPs? ➜ Bad reasons“It’s a standard requirement” #NoRFPs
    • Why RFPs? ➜ Bad reasonsRequired to gather competitive bid for projects oversome amount of money #NoRFPs
    • Why RFPs? ➜ Really bad reasonsThe Really Bad ReasonsPricing a project to gain leverage over an existingvendor #NoRFPs
    • Why RFPs? ➜ Really bad reasonsFree consulting: Get a blueprint, take it in house #NoRFPs
    • Why RFPs? ➜ Really bad reasonsRisk aversion: Displace responsibility to the vendor #NoRFPs
    • Why RFPs? ➜ Really bad reasonsQualifying new vendors #NoRFPs
    • Why respond?Best-case scenario #NoRFPs
    • Why respond? ➜ Best-case scenario (Crystal Williams)Small shops, big projectsIt’s not common (or easy), but it is possible for anexceptionally well qualified team to break throughto the “Big Leagues” with RFPs #NoRFPs
    • Why respond? ➜ Best-case scenario (Crystal Williams)Practice “safe RFP”Appropriate Complexity to the Size of Project?Prior Relationship or Internal AdvocateIf you can’t afford to lose this project, you might notbe able to afford to win in #NoRFPs
    • Why respond?Adjacent benefits #NoRFPs
    • Why respond? ➜ Adjacent benefits (Lullabot)Sending a bigger messageWe knew there was a chance we’d lose a recentRFP, but we also knew the potential of otherprojects from the clientRFP response was a way to demonstratecapabilities in a more comprehensive way to a wideraudience #NoRFPs
    • Why respond? ➜ Adjacent benefits (Lullabot)If you assume you’re going to lose, is there still anupside? #NoRFPs
    • Why respond?Product analysis #NoRFPs
    • Why respond? ➜ Product analysis (Lullabot)Using RFPs to test a new serviceWith Lullabot’s new Videola service, RFPs helped usencounter questions we hadnt thought of, in a low-pressure settingWe were able to perform product and businessanalysis driven by actual client needs #NoRFPs
    • Why respond? ➜ Product analysis (Lullabot)RFPs can teach you about your strengths andweaknesses relative to a new market #NoRFPs
    • Why respond?Maybe you shouldn’t #NoRFPs
    • Why respond? ➜ Maybe you shouldn’t (Four Kitchens)30-40 hours per RFP response$5,000-7,000 opportunity costWon only 22% of the RFP-driven proposals wesubmittedOnly 16% of work resulted from RFPs #NoRFPs
    • Why respond? ➜ Maybe you shouldn’t (Four Kitchens)On the flip side...84% of work involved no RFPs — just personalconnections and word-of-mouth #NoRFPs
    • Why respond? ➜ Maybe you shouldn’t (Four Kitchens)ConclusionsRFPs have driven a small, but not insignificant,amount of businessIt costs less for us to send a team to meet apotential client than responding to an RFP #NoRFPs
    • Why respond? ➜ Maybe you shouldn’t (Four Kitchens)Collateral damage:Word’s gotten out that Four Kitchens “doesn’trespond to RFPs”At least one client did not send us an RFP as aresult #NoRFPs
    • Try this at home #NoRFPs
    • Try this at homeCalculate your “hit rate”List all RFPs you’ve ever replied to, and mark thoseyou won #NoRFPs
    • Try this at homeCalculate how reliant you are on RFPsList all projects you’ve ever “won,” and mark thosethat actually followed an RFP-proposal process #NoRFPs
    • Try this at homeCalculate the cost of responding to an RFP time spent writing proposal, communicating with client, etc. × your blended rate opportunity cost + travel expenses cost of responding #NoRFPs
    • Try this at homeNow weigh that cost against• Project’s revenue • Will you actually make money?• Likelihood of RFP win • Are there other projects you are more likely to win? #NoRFPs
    • Meanwhile, on the client’sside... #NoRFPs
    • The client speaksClients like RFPs because they creates a sense ofrigor around the selection process...and it’s familiar... #NoRFPs
    • The client speaksWe can build a betterprocess #NoRFPs
    • The client speaks ➜ Build a better process• personalized invitation to bid• expository sketch (not a specification)• presentations• Q&A period• documented vendor review process• executive summary• SoW should be collaborative and iterative #NoRFPs
    • The client speaks ➜ Build a better processThis results in more work, but a better result, for theclient and the project #NoRFPs
    • Advice to clients #NoRFPs
    • Advice to clientsRequire speaking to the people who are going towork on the projectSalespeople should be facilitators, not themouthpieces of the vendor #NoRFPs
    • Advice to clientsBeware of low bidsThey are often too good to be true #NoRFPs
    • Advice to clientsPre-select, research, and vet vendorsNo open bids #NoRFPs
    • Advice to clientsDo not create an exact specification in advance #NoRFPs
    • Advice to clientsCheck referencesWord of mouth is not always right #NoRFPs
    • Advice to clientsBe open about your budget, and ask vendors if theyfeel it is feasibleYou may be wasting many vendors’ time only todiscover your budget is way off the mark #NoRFPs
    • Advice to vendors #NoRFPs
    • Advice to vendorsAsk clients how many other vendors they’re invitingto bid #NoRFPs
    • Advice to vendorsBe open: Ask if it’s really worth your time torespond #NoRFPs
    • Advice to vendors ➜ Ask if it’s worth your time“Why were we invited to bid?”“Are vendors with existing relationships underconsideration?”“How did you find out about you us?” #NoRFPs
    • Advice to vendorsAsk if another vendor had been hired to write anRFP or evaluationIn these cases, it’s likely that vendor will get the job— not you #NoRFPs
    • Advice to vendorsAsk about the selection process #NoRFPs
    • Advice to vendorsRequire a phone, video, or in-person meetingEvaluate client consensus around requirements,goals #NoRFPs
    • Advice to vendorsAsk if the client has ever embarked on a project likethis beforeIf not, their expectations in terms of cost anddifficulty may not be realistic #NoRFPs
    • Advice to vendorsDoes the client respect your work and industry?Or are you just a bunch of “techies”? #NoRFPs
    • Advice to vendorsOffer alternatives to the RFP-proposal processAs part of any sales or negotiation process, theevaluation system itself is often negotiable #NoRFPs
    • Advice to vendors ➜ Offer alternativesOffer to write an evaluation rather than a proposalSee “Stop Writing Project Proposals” by JonathanWold, Smashing Magazine: cog.gd/3l2 #NoRFPs
    • Advice to vendors ➜ Offer alternativesSuggest RFI instead of RFP“Do you want to proceed?”“Not sure if we’re a fit. Let’s tell you more aboutourselves.” #NoRFPs
    • Where do we go fromhere? #NoRFPs
    • Where do we go from here?• Crystal Williams• Brian Skowron, Lullabot• Todd Nienkerk, Four Kitchens• Zach Chandler, Stanford University #NoRFPs
    • Where do we go from here? ➜ Final wordsResponsible bid process #NoRFPs
    • Resources #NoRFPs
    • Resources• Stop Writing Project Proposals Jonathan Wold, Smashing Magazine http://cog.gd/3l2• RFPs: The Least Creative Way to Hire People Greg Hoy, A List Apart http://cog.gd/28b #NoRFPs
    • Resources• 6 Steps to Writing a Better Request for Proposals Confluent Forms http://cog.gd/3l3• Buying Wins Joe Rinaldi, Cognition http://cog.gd/30p #NoRFPs