Is the Bake-Off Really Necessary?
Why Rigid, RFI/RFP Evaluations can Lead to Suboptimal Results
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Selecting a solution provider can be a tedious endeavor. A company has to not just recognize that a specific process is sub-optimal, but must also pinpoint the root cause of the problem. Then, the executives have to make the decision to pursue an external solution rather than build their own (or try to power through the issue). And those are just the preliminary steps.
There isn’t just one process for evaluating solution options. The traditional process is of course a Request for Information (RFI) followed by a Request for Proposal (RFP). This process is designed to reduce risk by having a “bake-off.” We at o9 have certainly participated as a potential vendor in more than a few RFI/RFP processes. There is something to be said about undergoing a structured evaluation process as part of a scheduled buying cycle.
But there’s also something to be said about taking a more innovative approach. An alternative process for assessing a potential solution is to interact with a solution prototype. Instead of casting a wide net like in the conventional RFI/RFP process, a company enlists in more in-depth consultations with one solution provider willing to build a tailored prototype, enabling the company to interact first-hand with the solution. This alternative process means considering fewer solution providers, but it returns a more comprehensive picture of the solution capabilities provided. Moreover, it significantly reduces the risk of developing a solution which doesn’t meet the end user requirements, isn’t adopted, and ultimately becomes shelf-ware.
The o9 version of this process is called the Visual Process Prototype (VPP); we designed our process in response to companies seeking a solution with faster time-to-value than typically allowed in the RFI/RFP process. Recognizing that many companies do not have full visibility into what’s possible in the areas of supply chain, revenue management, etc., we also wanted to offer companies more insight into what they could accomplish with a next-generation platform.
A Tale of Two Companies
I will compare two fictional Consumer Products companies—both are based on a combination of companies we’ve consulted for, and worked with, over the years. Let’s say both companies are seeking to improve how they talk about demand planning: managers have low visibility on the assumptions behind the numbers, which leads to a lack of trust in forecasts. Moreover, there’s low user adoption of the current systems used in demand planning.
To start, both companies must have an internal conversation about the organizational needs related to demand planning. During this internal conversation, the companies also discuss the organizational structure around solving the series of demand planning problems and what they need to resolve those issues. Both companies determine that they need to integrate a new demand planning system.
Due Diligence Company
Though they may have similar organizational needs around demand planning, the two companies have different approaches and priorities for assessing solution options. The first company, Due Diligence, has a set buying cycle and always follows a formal approach to selecting systems and platforms, sending out an RFI and later an RFP. Executives at Due Diligence want to ensure they cover all of their bases when considering vendors.
The other company, Time-to-Value, is seeking to implement a solution sooner rather than later; they’re more concerned with identifying thought leadership and understanding what’s possible with a demand planning solution.
Despite sharing the same goal—a better demand planning process and system—the Due Diligence Company and Time-to-Value Company have quite different stories because of the divergent paths they’ve chosen in pursuit of a solution.
The Due Diligence Odyssey
In order to cover their bases, the Due Diligence Company assigns a team to compile a list of vendors who offer solutions for improving demand planning. The team compiles a list of a dozen vendors, and the company sends an RFI to that list, requesting information on the vendor’s recommended solution, its value to the Due Diligence Company, and an overall timeline. This is part of the discovery process. Vendors schedule meetings with the Due Diligence Company and submit a response to the RFI. Due Diligence then discusses the RFI, eventually creating a shortlist of three vendors.
The company then sends an RFP to that shortlist. Compared to the RFI, the RFP is a formal proposal, requiring a more structured deal and proposed price. This process includes iterative internal conversations; because of the numerous stakeholders involved, there are many different perspectives on priorities, delaying the final selection.
The company finally approves one of the proposals. Before this, Due Diligence has seen somewhat configured demos, but not a true prototype. It is only after a proposal is approved that the project actually starts and the vendor begins creating a working model tailored for the Due Diligence Company.
This two-stage process—the RFI and then RFP—takes roughly 5-6 months, the usual timeframe for this process. After being approved by the Due Diligence Company, the solution provider takes another 3-12 months to produce a deliverable (again, a pretty typical timeframe for such a process). If the solution actually meets their needs and is adopted, Due Diligence Company starts to see a return on their investment 9 months—at the earliest!—after they started compiling their RFI list.
An unexpected complication with the long search process, however, is that over the span of time necessary for the RFI/RFP and then implementation, the requirements for the solution changed as the company and its market changed. Because Due Diligence did not revisit the initial list of needs created prior to sending out the Requests for Information, the solution was based on a snapshot of the company created almost a year ago. Consequently, the final platform did not fully address the company’s current demand planning needs.
The Time-to-Value Journey
The Time-to-Value Company’s story begins with a project manager contacting thought leaders in the industry, including o9 Solutions, in order to discuss the possibilities for demand planning. The company’s executives have a sense of the demand planning obstacles in their organization, but they do not know if their checklist of requirements for a solution will address the root causes of their slow, siloed demand planning process. o9 proposes an all-in-one demand planning system with a user-friendly interface, that provides greater visibility into the drivers affecting forecast numbers. The executives at Time-to-Value want to interact with the solution model before finalizing a deal, so they decide to request a Visual Process Prototype (VPP) from o9.
The VPP process is more consultative than the traditional RFI/RFP process. Rather than just tailoring the prototype to a checklist from the company, o9 consults with future users to better diagnose the core issues and ensure the solution integrates with users’ existing processes. That allows the o9 team to configure a scalable solution that can adapt to the needs of Time-to-Value Company as it grows.
o9 completes the prototype in approximately 3 months. The Time-to-Value users engage with the working model and can see their own world reflected in the prototype. Being able to interact with the platform beforehand leads to early buy-in among users, resulting in higher adoption of the platform once the solution goes live.
A Final Comparison
The Due Diligence Company sees first value in 9 months, whereas the Time-to-Value Company sees first value in 3. Assuming both companies needed an additional month for system integration, training, and other fine-tuning, that is 10 months versus 4 months for the Go Live. While the Due Diligence Company is still debating over the final solution vendor, Time-to-Value is engaging with a tangible piece of technology that represents their particular demand planning needs.
o9’s VPP process was designed for companies dedicated to a faster time-to-value and a less risky approach, but the process also enables a closer adherence to the changing needs of the company. The lengthy RFI/RFP process can result in a solution that cannot adapt to a company’s growth; the VPP process, in contrast, entails an ongoing conversation to ensure the solution develops in the right direction.
Like at Due Diligence, the people at Time-to-Value thought they captured all of their requirements for a solution at the onset of their search for a solution provider; unfortunately, their list was limited to what they knew the day it was compiled. One of the main differences in these two stories is that the list from Time-to-Value evolved to capture new ideas and demand planning possibilities during the VPP consultations and engagement with the prototype.
Although the Due Diligence Company considered more solution providers, Time-to-Value took the opportunity to engage with a tailored prototype before committing to the solution. It’s like buying a car: You do your research online, select a small numbers of dealerships to contact, and then communicate with them online about specifications. You finally choose your car and then go to pick it up. Once you sit in the car, though, you discover a litany of concerns you didn’t initially consider until you were in the driver’s seat. You want to kick the tires before committing to the car. Choosing technology is very similar: you need to take it for a test drive.
Think 10x; Take Action:
Augmented Intelligence (A.I.) platforms like o9’s are the next-generation of solutions developed for a world that is changing faster than ever before. With a modern visual-process-prototype like the one outlined above, companies can reduce risk, shorten time-to-value, and obtain a solution that their users will actually love and use. If you are looking for a supply chain or planning solution, take the first step in changing your RFI/RFP process. Contact us for a preview of what’s possible.