Consider the Source

Set the Stage Early to Get the Best Out of Your RFP Process

by Ian Watt, Director, TPI

Issuing a request for proposal (RFP) and selecting a service provider partner is a big deal, especially for services that can materially affect the way — or even whether — you do business. You want the investment in time and focus to be worthwhile, resulting in the right services with the right partner at the right price.

When you issue an RFP, you’re signaling that you are willing to pay for certain services. Lots of service providers will be interested, especially in the payment part. You’re interested in the services part. A good RFP lets both parties align their interests.

Here are the TPI Top 5 guidelines for getting your RFP process started on the right foot:

1.  Have a sober discussion about what you really want to buy — and be sure to include the business. Generalities in an RFP increase the price a service provider will bid, especially if you are asking for a fixed price. The rigor of writing down exactly what you want to buy will improve the RFP result and sharpen your own thinking. Deciding on scope is not something you can delegate down the organization. If the services are going to affect business operations, your discussions should include business operations.

2.  Make a schedule and stick to it. From the moment you signal your intention to issue an RFP you are negotiating with your service providers. The single best way to remain in charge of the discussion is to set a schedule for the whole process and stick to it. Your providers will know that you are serious and organized. You will also drive a better response because they will be able to plan their internal staffing around dates they know will be honored.

3.  Provide the richest set of data possible. In this area, like no other, you get what you pay for. If you develop solid data to go with your RFP, you have a right to expect high quality responses in return. Reliable data also provides insurance against unpleasant discussions with your service provider after contract signature (when your leverage is roughly zero). You don’t want to hear: “When we bid that price, we assumed A, B, and C; but now we see D, E, and F, so our price will double …”

4.  Be willing and able to walk away from bidders who don’t play by the rules. When the prize has been big enough, bidders have been known to walk around the RFP process, spread fear, uncertainty, and doubt among executives, and perhaps ask for “another bite” at the process if the first attempt was rejected. If they can’t work as a partner during the courtship phase, what chance do you have for a long-term relationship? Brief your executives ahead of time, and make sure you’re able to walk away if you have to.

5.  Give yourself a structured decision process. If the RFP is a big deal, it should have players to match. Form an empowered team who will make decisions at pre-defined checkpoints (e.g., downselect, negotiations …). Involve the business, procurement, and legal counsel up front — not as a last minute check off. Above all, don’t allow “tourists” at the table. It should be clear from the beginning that nobody gets to swing into a meeting, offer criticism, and leave.

Remember the old story about the pig, the chicken, and bacon and eggs for breakfast? The hen is involved, but the pig is committed. Likewise, everyone on your team should be committed to the whole process.

TPI CIO Services experts can help you achieve your organizational goals through objective advice, knowledge of your industry and experience with arrangements from simple to complex.

Contact Ian Watt, Director, TPI, to learn more.

Risk and Organizational Change at the PMI Global Congress – Part 2

By Cynthia Batty, Global Competency Lead, Service Management, TPI

 

 

At last month’s Project Management Institute’s Global Congress there were many sessions on risk management. PMI has long considered risk to be a critical factor in project management. We were treated to a number of very sophisticated risk workshops, by very thoughtful educators and consultants. I had some very useful takeaways from these sessions; this is one.

 

Outsourcing has risk that needs identification as well – both from the project perspective and from the ongoing service and relationship management perspective. In my practice, I generally see interest in risk management up front, but the interest in maintaining a risk management and mitigation plan wanes after the outsourcing project is completed and services begin. In our view, this is the time when risk management is most important.

 

I’ve wondered for some time why managers are so reluctant to engage on risk, and I’ve come to believe that it’s because risk is boring – unless you’ve got a “live one” in front of you. So when I signed up for the session “Deadliest Catch: Risk Identification in the Vast Bering Sea,” I was hoping for something different – and I got it.

 

The instructor, from The Persimmon Group divided up the room into groups of about 15, and asked us to watch some film clips from the Deadliest Catch program and identify all the risks we could see in 10 minutes after the films. We had about two minutes to organize ourselves (the groups were complete strangers to each other) and were told that the group that identified the largest number of risks would win a prize.

 

Then he rolled the tapes of the dangerous, wet, cold, frightening footage of men catching crabs off the Alaska coast. We made notes and collated our risks afterwards in an atmosphere of fun and excitement. Granted crabbing is a bit more immediate and obvious than managing outsourced services risk, but the very short process focused everyone’s minds wonderfully! Our team identified over 100 risks – but we still lost to a group who did a better job of creating their categories.

 

It was an eye-opening way to push a team to quickly take stock, which forced immediate identification of key categories, and an excited atmosphere to literally call out the risks large and small without rationalizing. When I told the instructor I planned to use the technique with my teams from now on, the room exploded in applause. It was a smart, interesting way to drive people to think fast (and in a relatively fun way) about risk. I’ve used this already with a client, just focusing on their own risk, and giving them a head start by identifying categories such as Reputational Risk and Geopolitical Risk to help them. It worked like a charm; they identified nearly 200 risks in eight categories in two ten-minute sessions, which has lead to subsequent risk workshops to follow up.

 

This is a real keeper of an idea, and now part of our overall Risk Management methodology in our Service Management & Governance practice.

Next time: Innovation and Organizational Change Management

Organizational Change and Risk at the 2009 PMI Global Congress

By Cynthia Batty, Global Competency Lead, Service Management, TPI


I attended the Project Management Institute’s Global Congress this month, in Orlando, Florida. I am particularly interested in Organizational Change Management and Risk Management, so I selected sessions primarily focused on these things. Many of the sessions focused on what I call “voodoo” change management – communications, feelings, and so forth – but not an operational expression of change. Though there was one outstanding and remarkable presentation by an interesting team from the State of Oregon and George Fox University. I think their work provides some very practical and operational insight on how change management should be integrated into both project and outsourcing management.

What the State of Oregon Department of Human Services Process Center of Excellence has done is take a look at all the thinking in organizational change management, codify and examine it, and create a methodology that shines the cold light of operations on the problem of providing concrete actions to bring about effective change – especially when the change is not one that stakeholders will ever like or embrace. Outsourcing presents such a challenge.

I’ve been bothered for years by the lack of completion in most change management methodologies. While it’s clear that changes have to be communicated and winning hearts and minds is important, the hard fact of organizational change is that sometimes it’s hard to like the change regardless of how it’s packaged. So there has to be a more operational expression of change.  A way to ride herd on the outcomes, often over several years, is to ensure that the change really “took.” This takes an organizational bent of mind, a will to see it through, and a strong methodology that supports this kind of institutionalization of change – something that corporations sometimes lack. It’s refreshing for an American to think that a state government would support and nurture such an obvious and valuable approach.

Like so many major advances in project management, this United States Government contribution to the ongoing discussion of project management is published. Go take a look at their review of change management methodologies for an instant primer on change in management thinking, and what is missing: States Of Change: An Inquiry Into The Nature Of Organizational Change.

There’s a lot to mine on this subject. I realized (paradoxically, I suppose)  that innovation could only thrive in an organization where change management was actively practiced – I’ll write about that in the future. I felt that our Service Management & Governance operating model methodology was validated. Outsourcing is the kind of change that challenges organizations; it’s good for the corporate entity, but hard for people. Walking that tightrope has implications for both the human capital of a company, and its bottom line.

Next time: Risk and The Deadliest Catch!