Injecting greater objectivity into your evaluation process for IT investments
A Qual IT whitepaper
RFPs remain a necessary evil in the procurement process
Request for proposals (RFP) remain at the heart of the modern tendering system for software products, and are often filled with stress for all parties. Many of us would prefer not to labour through these long, complicated and protracted experiences, but if anything they are becoming more important.
The need for competitive tendering is obvious in a government context, as crown agencies must show a transparent decision-making process and follow best practice. Principles enshrined in the Ministry of Economic Development’s ‘Mandatory Rules for Procurement by Departments’ require attention to be paid to “best value for money over whole of life; open and effective competition; full and fair opportunity for domestic suppliers; improving business capabilities, including e-commerce capability; recognition of New Zealand's international trade obligations and interests; and, requiring sustainably produced goods and services wherever possible, having regard to economic, environmental and social impacts over their life cycle.”
In the private sector, governance requirements in most large organisations simply make an RFP unavoidable. Everyone from the board to your legal department needs proof of a commercially objective decision, and a process designed to deliver competitive pricing.
The electronic age is also putting a premium on transparent decision-making. Electronic audit trails and the ease of discovery make any selection, no matter how commercially sensitive, potentially open to the media, stakeholders and other interested parties.
Real attention has to be paid to running a comprehensive and transparent evaluation and selection and negotiation of software solutions. Running an effective process can remove the emotion from the decision, gets the best possible match to business needs and avoid being unduly influenced by the slickest sales people. For vendors, they are getting an “apples with apples” evaluation against their competitors’ products, and are willing to invest time and effort competing for your business.
Reducing your RFP stress
Realising the elusive goal of the completely transparent and even-handed RFP process is complex and challenging - involving a mix of IT strategy, software standards, legislative requirements in the government context, normal contractual issues and of course the financial imperatives.
Where organisations can gain real transparency in the assessment of products and matching those to business requirements is by introducing testing into the RFP process from the earliest possible stage.
That usually involves getting an independent view of the business requirements you have developed for the RFP. Independent testing professionals see a myriad of systems, providing all sorts of business solutions, and have a well-developed sense of what works and what is impractical.
An independent analysis of your requirements can highlight issues and clarify requirements. It also reduces the volume of vendor questions during the process, and contributes to a better outcome at the end of the project.
Getting what it says ‘on the label’.
Armed with a clear and consistent RFP, customers can confidently invite vendors to show their wares. Enabling a consistent analysis of the proposals will be aided by including an independent audit.
The requirements review process provides a platform for a functional testing approach in your evaluation. Testing professionals develop test cases for each requirement, or combination of requirements, as needed. They are then able to judge the performance of a vendor demonstration against a set of objective test cases.
Test cases are provided to vendors at the time of publishing the RFP and ahead of their system demonstration, enabling them to identify and explain areas where they can’t meet the requirements, and adequately show where they can. This creates an environment of openness and transparency – vendors know straight away how closely they can deliver to the RFP.
The test cases can also be loaded into a test management tool so they are ready for use during the implementation phase of the project. Ultimately this increases the speed and accuracy of the system testing process.
What does it mean to vendors?
Vendors also see independent testing as taking some of the pain out. Expectations are clear and they have confidence that there is a more level playing field on which their products and services can be compared.
Vendors are typically very positive about introducing a more structured testing approach into the process. It avoids the typically mistaken impression that a customer has already made a decision and is going through the motions, and assures them that their technology is being assessed objectively against their competitors.
It leaves them with no real grounds to complain about the process – the scorecard will speak for their suitability to deliver against the RFP.
For vendors it creates one of the first opportunities for them to build trust with the client as an environment has been created where they can demonstrate how effective their solution is and what they would be able to deliver to the client.
Having this vendor perception helps ensure you get the best possible response to your RFP, with all quality vendors in the market willing to invest time and effort with a fair chance of succeeding.
Return on the independent testing investment
Introducing testing into the RFP process does add cost up-front, but the returns on that investment are considerable.
It is an excellent decision-making tool, as you get an objective and consistent analysis from an independent third party professional of the vendor proposals, and a clear view of how well their applications will meet your business needs. While there are many other factors that influence the final decision, from proposal costs to vendor stability to contractual issues to IT strategy requirements, an independent audit is an important contribution.
Risk reduction is the benefit of any testing approach. Conducting an independent audit during the RFP process decreases the likelihood of expensive IT mistakes, unanticipated customisation costs and time-consuming and expensive process reengineering.
‘Plugging’ testing into your RFP process
Testing in an RFP process can be delivered by an internal resource in many organisations, but doing so raises questions. The loyalty (or even familiarity) of internal testers to incumbent vendors could be seen as prejudicial in assessing test cases.
Best practice dictates being able to ‘plug-in’ a qualified, independent, third party professional. They have established skills and methodology around appropriate testing approaches and will not be owned or influenced by a bidding vendor organisation.
Aside from working through a structured process it provides assurance against the required features and the demonstrated capabilities of the application. This also gives you a flexible resource that can be introduced into the RFP process as needed, which is respected by all vendors in the process and can deliver reliable results trusted by both customer and vendor.
RFP with an assured difference
Fairness is not just about keeping vendors and auditors happy. Fairness is about meeting the expectations of users within your business; of finance in terms of return on investment, of legal in terms of reasonable risk, and of senior management in terms of being able to deliver strategic value from IT.
Applying some standard testing methods as early as possible in your RFP process could make the dreaded acronym actually stand for ‘really fair process’ in your organisation.