The RFP Grind

For a long time now I have answered Request for Proposals (RFP) in the Identity and Access Management space.  I have sequestered myself for days, nights and weekends more times than I would like to say all in the name of winning a contract against a plethora of competition.

In the landscape of the Technology world the RFP represents a method of differentiating the Wheat from the Chaff, or does it?  Let’s face it; an RFP is a heck of a lot of work to both create and to answer.  On the answering side more times than not the RFP is “throw away” work, meaning a prospective vendor has to carve out a significant amount of time, effort and know how into a packaged application of sorts for no fee only to compete with a dozen or more other companies.  Assuming a one in ten hit (I have seen statistics by Solution Selling stating 15% is the norm at best) then does the cost outpace the success?  A two week process involving 2-3 resources might run you 40 hours total or more and if your resources average 100K than you are looking at a roughly $4000 hit for every RFP you answer.  Of course this doesn’t include site visits and follow up presentations that can take the cost easily over $10,000.  If you manage to succeed on one RFP out of 7 then you had better hope the profit margin exceeds $70,000 just to break even.

It is for these reasons and the very fact that responding to an RFP is a real pain in the @$$ that I truly loathe the RFP process.  It reminds me of the SAT.  Prep for weeks for the 4 hour exam that will determine your future as opposed to the years of work in school getting decent grades.

The difference I see in many RFPs is timing and influence. If you happen to write the RFP for the customer and happen to also be allowed to answer it, if you happen to have already been to the customer’s site and had a pain point identification session or if you just so happen to be neighbors with the deciding members then you can walk in to the process with head held high and a much stronger feeling than going in “blind”.  Unfortunately many times, in this and most businesses, it is who you know much more than what you know.

Better to be the company that gets in front of the customer before an RFP comes to fruition thus stacking the odds in your favor.  If not, then the best thing is to gauge who and what you know about the customer so better to judge whether there really is a shot at winning the Bid.  Don’t get me wrong, we have had success with the blind approach before, it is just not a high percentage hit.

So I recommend the following checks before answering:

  1. Is this for real? Meaning does this RFP have an actual path to award spelled out in the RFP itself.
  2. Is the writer of the RFP also answering it?  This is paramount to understanding if there is an “inside track” and your response simply fills the quota.
  3. How many companies has the RFP been released too?  100 companies whittles your chances to 1% or less if there are influencers already involved.
  4. Understand the decision making process.  This should be well documented within the RFP.  Be on the look out for “gotchas” that involve preference for in-state suppliers, minority owned companies or flatly stating the “lowest” dollar bid will win (as offshore resources are hard to compete with).
  5. Do you know anyone internally at the company?  Always a bonus to place a phone call before the RFP process starts (always before it starts so as not to violate the rules).

Agree?  Disagree? Thoughts? Comments?

Let IDMWorks know by sounding off below.