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Your RFP should not take more than two months

Correctly identifying the problem and the expected benefits is the true challenge


RFPs, Request For Proposals, as their name states are here to solicit detailed information through a controlled, competitive process, usually controlled by the procurement department.

The goal is to gather information from potential suppliers to determine the best fit for the purchasing organization. It should place the burden for analyzing product functionality questions on the seller rather than the buyer. Other reasons may include market screening, renegotiation of existing contracts, or purely hygienic factors as the solution may already seem obvious.

What are the challenges?

  1. Correctly identifying the problem and the expected benefits is the true challenge

Way too often, Asset & Wealth Managers rush into solutioning, and want to immediately shop for what's available on the market. The problem is not the RFP process itself.

Asset & Wealth Managers miss a crucial step, which is to identify the benefits they expect in the next 5 to 10 years from their platform.

Often enough, issues that appear on the surface of a system or tool, find their cause more upstream. Your portfolio management system may not be the sole reason why you have inaccurate portfolio holdings, instead this could be due to middle office, data processing issues, start of day load issues, late data delivery by custodians, etc...

Don't issue an RFP if you don't know what you are looking for, because the solution proposals you will receive will not fit your true needs.

2. The RFP template is only a template and not tailored to the problem statement

Assuming you have clearly identified what you are looking to address, it's time to issue a questionnaire to the providers. Given the size of the task, consultants are often hired to do the leg work and often come with a standard RFP form that they send to the providers, and handle the questions the providers may have, but also capture and summarize the answers from the providers on behalf of their clients (the buyers).

The RFP template often contains thousands of questions, and may look impressive to their clients. There may exist a conflict of interest of the consulting firm to sell a complex and lengthy process to their clients, as they charge based on time and material. However, making an informed decision requires focusing on the right information.

Nobody reads a standard thousand lines RFP document.

Providers on the other end receive on a regular basis those large templates to fill in, requiring them to allocate time and resources to answer to generic questions or unclear requirements. This can create a wrong basis for the relationship between the buyer and the seller. Providers are not clear on what the clients really want, and may over promise on their capabilities in the hope to win the RFP, or sometimes do not even respond to those anymore. In the end, it is a lose-lose for the buyer and the seller, but creates income for the consulting firm.

How to do it right?

The recipe is quite simple but often forgotten:

  1. Identify your true problem and objective: you need to spend time and effort on clearly narrowing down the problem you are trying to solve, or the objective you are trying to achieve, before even thinking about issuing an RFP. It could be that you do not even need to issue one in your situation, and if you know which provider you want, just ask for a quote.

  2. Take strategic decisions before an RFP: you need to decide if you are going to build or buy, keep internal operations or outsource, host on premises or on the cloud... By first identifying your problem and objective, you are able to compose a platform strategy. Providers need to understand your strategic decisions, to better address your needs and offer the right solutions.

  3. Make the RFP document relevant and concise: in order to get the full value out of the RFP, it is key to match properly clients and vendors. There are key criteria, questions, use cases and requirements in your template that will accelerate the selection process and sharpen the short list. If the providers do not understand what you are trying to achieve, they will not be able to propose you the right solution. A thousand line RFP document will not help them understanding what you are looking for, and will not help you deciding on the right one.

  4. Remember that one of the providers you are talking to will most likely be your new partner: as such, you want to establish the basis for partnership. Through your RFP process, you want to identify the provider that will solve your true problem, that will deliver on your key objective, and that will work as partner with you and that will not overpromise. It's also about respecting each other's time, you do not want to waste yours and the providers' time.

Conclusion: Request for Proposals or for Problems?

An RFP is a good tool to receive proposals once you have clearly defined your business strategy and objectives, and identified the obstacles to achieve those. Failing to clearly state your needs, can derail you at a very early stage, with the risk of escalating costs the further you go down this route. We can't emphasize enough on how important it is to get it right from the start. This often requires people with an outside view to help you sharpen that problem statement.

At TGGC, we master the task of identifying the true problem statement, and when an RFP is required, we are able to strongly cut the duration of the overall process. We look after your business as if it was ours.

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