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




Crystal Williams, Brian Skowron, Todd Nienkerk, and Zach Chandler
DrupalCon 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 are




Favorite RFP memories



                    #NoRFPs
Why RFPs?



            #NoRFPs
Why RFPs? ➜ Good reason




The Good Reason

There’s work to be done, and a customer is looking
for vendors to help




                                             #NoRFPs
Why RFPs? ➜ Bad reasons




The 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 reasons




Required to gather competitive bid for projects over
some amount of money




                                             #NoRFPs
Why RFPs? ➜ Really bad reasons




The Really Bad Reasons

Pricing a project to gain leverage over an existing
vendor




                                               #NoRFPs
Why RFPs? ➜ Really bad reasons




Free consulting: Get a blueprint, take it in house




                                                #NoRFPs
Why RFPs? ➜ Really bad reasons




Risk aversion: Displace responsibility to the vendor




                                               #NoRFPs
Why RFPs? ➜ Really bad reasons




Qualifying new vendors




                                 #NoRFPs
Why respond?
Best-case scenario


                     #NoRFPs
Why respond? ➜ Best-case scenario (Crystal Williams)




Small shops, big projects

It’s not common (or easy), but it is possible for an
exceptionally well qualified team to break through
to 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 Advocate

If you can’t afford to lose this project, you might not
be able to afford to win in




                                                       #NoRFPs
Why respond?
Adjacent benefits


                   #NoRFPs
Why respond? ➜ Adjacent benefits (Lullabot)




Sending a bigger message

We knew there was a chance we’d lose a recent
RFP, but we also knew the potential of other
projects from the client

RFP response was a way to demonstrate
capabilities in a more comprehensive way to a wider
audience



                                             #NoRFPs
Why respond? ➜ Adjacent benefits (Lullabot)




If you assume you’re going to lose, is there still an
upside?




                                                 #NoRFPs
Why respond?
Product analysis


                   #NoRFPs
Why respond? ➜ Product analysis (Lullabot)




Using RFPs to test a new service

With Lullabot’s new Videola service, RFPs helped us
encounter questions we hadn't thought of, in a low-
pressure setting

We were able to perform product and business
analysis driven by actual client needs




                                             #NoRFPs
Why respond? ➜ Product analysis (Lullabot)




RFPs can teach you about your strengths and
weaknesses 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 cost

Won only 22% of the RFP-driven proposals we
submitted

Only 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 personal
connections and word-of-mouth




                                                     #NoRFPs
Why respond? ➜ Maybe you shouldn’t (Four Kitchens)




Conclusions

RFPs have driven a small, but not insignificant,
amount of business

It costs less for us to send a team to meet a
potential 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’t
respond to RFPs”

At least one client did not send us an RFP as a
result




                                                     #NoRFPs
Try this at home



                   #NoRFPs
Try this at home




Calculate your “hit rate”

List all RFPs you’ve ever replied to, and mark those
you won




                                              #NoRFPs
Try this at home




Calculate how reliant you are on RFPs

List all projects you’ve ever “won,” and mark those
that actually followed an RFP-proposal process




                                              #NoRFPs
Try this at home



Calculate 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 home




Now 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’s
side...


                      #NoRFPs
The client speaks




Clients like RFPs because they creates a sense of
rigor around the selection process

...and it’s familiar...




                                             #NoRFPs
The client speaks




We can build a better
process



                        #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 process




This results in more work, but a better result, for the
client and the project




                                                #NoRFPs
Advice to clients



                    #NoRFPs
Advice to clients




Require speaking to the people who are going to
work on the project

Salespeople should be facilitators, not the
mouthpieces of the vendor




                                              #NoRFPs
Advice to clients




Beware of low bids

They are often too good to be true




                                     #NoRFPs
Advice to clients




Pre-select, research, and vet vendors

No open bids




                                        #NoRFPs
Advice to clients




Do not create an exact specification in advance




                                            #NoRFPs
Advice to clients




Check references

Word of mouth is not always right




                                    #NoRFPs
Advice to clients




Be open about your budget, and ask vendors if they
feel it is feasible

You may be wasting many vendors’ time only to
discover your budget is way off the mark




                                            #NoRFPs
Advice to vendors



                    #NoRFPs
Advice to vendors




Ask clients how many other vendors they’re inviting
to bid




                                             #NoRFPs
Advice to vendors




Be open: Ask if it’s really worth your time to
respond




                                                 #NoRFPs
Advice to vendors ➜ Ask if it’s worth your time




“Why were we invited to bid?”

“Are vendors with existing relationships under
consideration?”

“How did you find out about you us?”




                                                  #NoRFPs
Advice to vendors




Ask if another vendor had been hired to write an
RFP or evaluation

In these cases, it’s likely that vendor will get the job
— not you




                                                  #NoRFPs
Advice to vendors




Ask about the selection process




                                  #NoRFPs
Advice to vendors




Require a phone, video, or in-person meeting

Evaluate client consensus around requirements,
goals




                                               #NoRFPs
Advice to vendors




Ask if the client has ever embarked on a project like
this before

If not, their expectations in terms of cost and
difficulty may not be realistic




                                                  #NoRFPs
Advice to vendors




Does the client respect your work and industry?

Or are you just a bunch of “techies”?




                                             #NoRFPs
Advice to vendors




Offer alternatives to the RFP-proposal process

As part of any sales or negotiation process, the
evaluation system itself is often negotiable




                                              #NoRFPs
Advice to vendors ➜ Offer alternatives




Offer to write an evaluation rather than a proposal

See “Stop Writing Project Proposals” by Jonathan
Wold, Smashing Magazine: cog.gd/3l2




                                             #NoRFPs
Advice to vendors ➜ Offer alternatives




Suggest RFI instead of RFP

“Do you want to proceed?”

“Not sure if we’re a fit. Let’s tell you more about
ourselves.”




                                                #NoRFPs
Where do we go from
here?


                      #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 words




Responsible 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

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

  • 1. No RFPs! Why requests for proposal are bad for business (and how we can stop them) Crystal Williams, Brian Skowron, Todd Nienkerk, and Zach Chandler DrupalCon Denver | March 20, 2012 #NoRFPs
  • 2. Who we are #NoRFPs
  • 3. Who we are • Crystal Williams • Brian Skowron, Lullabot • Todd Nienkerk, Four Kitchens • Zach Chandler, Stanford University #NoRFPs
  • 4. Who we are Favorite RFP memories #NoRFPs
  • 5. Why RFPs? #NoRFPs
  • 6. Why RFPs? ➜ Good reason The Good Reason There’s work to be done, and a customer is looking for vendors to help #NoRFPs
  • 7. Why RFPs? ➜ Bad reasons The Bad Reasons “That’s just how we’ve always done it” #NoRFPs
  • 8. Why RFPs? ➜ Bad reasons “I think I’m supposed to write an RFP” #NoRFPs
  • 9. Why RFPs? ➜ Bad reasons “It’s a standard requirement” #NoRFPs
  • 10. Why RFPs? ➜ Bad reasons Required to gather competitive bid for projects over some amount of money #NoRFPs
  • 11. Why RFPs? ➜ Really bad reasons The Really Bad Reasons Pricing a project to gain leverage over an existing vendor #NoRFPs
  • 12. Why RFPs? ➜ Really bad reasons Free consulting: Get a blueprint, take it in house #NoRFPs
  • 13. Why RFPs? ➜ Really bad reasons Risk aversion: Displace responsibility to the vendor #NoRFPs
  • 14. Why RFPs? ➜ Really bad reasons Qualifying new vendors #NoRFPs
  • 16. Why respond? ➜ Best-case scenario (Crystal Williams) Small shops, big projects It’s not common (or easy), but it is possible for an exceptionally well qualified team to break through to the “Big Leagues” with RFPs #NoRFPs
  • 17. Why respond? ➜ Best-case scenario (Crystal Williams) Practice “safe RFP” Appropriate Complexity to the Size of Project? Prior Relationship or Internal Advocate If you can’t afford to lose this project, you might not be able to afford to win in #NoRFPs
  • 19. Why respond? ➜ Adjacent benefits (Lullabot) Sending a bigger message We knew there was a chance we’d lose a recent RFP, but we also knew the potential of other projects from the client RFP response was a way to demonstrate capabilities in a more comprehensive way to a wider audience #NoRFPs
  • 20. Why respond? ➜ Adjacent benefits (Lullabot) If you assume you’re going to lose, is there still an upside? #NoRFPs
  • 22. Why respond? ➜ Product analysis (Lullabot) Using RFPs to test a new service With Lullabot’s new Videola service, RFPs helped us encounter questions we hadn't thought of, in a low- pressure setting We were able to perform product and business analysis driven by actual client needs #NoRFPs
  • 23. Why respond? ➜ Product analysis (Lullabot) RFPs can teach you about your strengths and weaknesses relative to a new market #NoRFPs
  • 24. Why respond? Maybe you shouldn’t #NoRFPs
  • 25. Why respond? ➜ Maybe you shouldn’t (Four Kitchens) 30-40 hours per RFP response $5,000-7,000 opportunity cost Won only 22% of the RFP-driven proposals we submitted Only 16% of work resulted from RFPs #NoRFPs
  • 26. Why respond? ➜ Maybe you shouldn’t (Four Kitchens) On the flip side... 84% of work involved no RFPs — just personal connections and word-of-mouth #NoRFPs
  • 27. Why respond? ➜ Maybe you shouldn’t (Four Kitchens) Conclusions RFPs have driven a small, but not insignificant, amount of business It costs less for us to send a team to meet a potential client than responding to an RFP #NoRFPs
  • 28. Why respond? ➜ Maybe you shouldn’t (Four Kitchens) Collateral damage: Word’s gotten out that Four Kitchens “doesn’t respond to RFPs” At least one client did not send us an RFP as a result #NoRFPs
  • 29. Try this at home #NoRFPs
  • 30. Try this at home Calculate your “hit rate” List all RFPs you’ve ever replied to, and mark those you won #NoRFPs
  • 31. Try this at home Calculate how reliant you are on RFPs List all projects you’ve ever “won,” and mark those that actually followed an RFP-proposal process #NoRFPs
  • 32. Try this at home Calculate 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
  • 33. Try this at home Now 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
  • 34. Meanwhile, on the client’s side... #NoRFPs
  • 35. The client speaks Clients like RFPs because they creates a sense of rigor around the selection process ...and it’s familiar... #NoRFPs
  • 36. The client speaks We can build a better process #NoRFPs
  • 37. 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
  • 38. The client speaks ➜ Build a better process This results in more work, but a better result, for the client and the project #NoRFPs
  • 39. Advice to clients #NoRFPs
  • 40. Advice to clients Require speaking to the people who are going to work on the project Salespeople should be facilitators, not the mouthpieces of the vendor #NoRFPs
  • 41. Advice to clients Beware of low bids They are often too good to be true #NoRFPs
  • 42. Advice to clients Pre-select, research, and vet vendors No open bids #NoRFPs
  • 43. Advice to clients Do not create an exact specification in advance #NoRFPs
  • 44. Advice to clients Check references Word of mouth is not always right #NoRFPs
  • 45. Advice to clients Be open about your budget, and ask vendors if they feel it is feasible You may be wasting many vendors’ time only to discover your budget is way off the mark #NoRFPs
  • 46. Advice to vendors #NoRFPs
  • 47. Advice to vendors Ask clients how many other vendors they’re inviting to bid #NoRFPs
  • 48. Advice to vendors Be open: Ask if it’s really worth your time to respond #NoRFPs
  • 49. Advice to vendors ➜ Ask if it’s worth your time “Why were we invited to bid?” “Are vendors with existing relationships under consideration?” “How did you find out about you us?” #NoRFPs
  • 50. Advice to vendors Ask if another vendor had been hired to write an RFP or evaluation In these cases, it’s likely that vendor will get the job — not you #NoRFPs
  • 51. Advice to vendors Ask about the selection process #NoRFPs
  • 52. Advice to vendors Require a phone, video, or in-person meeting Evaluate client consensus around requirements, goals #NoRFPs
  • 53. Advice to vendors Ask if the client has ever embarked on a project like this before If not, their expectations in terms of cost and difficulty may not be realistic #NoRFPs
  • 54. Advice to vendors Does the client respect your work and industry? Or are you just a bunch of “techies”? #NoRFPs
  • 55. Advice to vendors Offer alternatives to the RFP-proposal process As part of any sales or negotiation process, the evaluation system itself is often negotiable #NoRFPs
  • 56. Advice to vendors ➜ Offer alternatives Offer to write an evaluation rather than a proposal See “Stop Writing Project Proposals” by Jonathan Wold, Smashing Magazine: cog.gd/3l2 #NoRFPs
  • 57. Advice to vendors ➜ Offer alternatives Suggest RFI instead of RFP “Do you want to proceed?” “Not sure if we’re a fit. Let’s tell you more about ourselves.” #NoRFPs
  • 58. Where do we go from here? #NoRFPs
  • 59. Where do we go from here? • Crystal Williams • Brian Skowron, Lullabot • Todd Nienkerk, Four Kitchens • Zach Chandler, Stanford University #NoRFPs
  • 60. Where do we go from here? ➜ Final words Responsible bid process #NoRFPs
  • 61. Resources #NoRFPs
  • 62. 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
  • 63. 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