Don’t Shoot the RFP: Your Guide to Better ERP Procurement

Everyone in the industry has a nightmare RFP story. Is there any hope to salvage the process?

Let’s face it: virtually everyone views technology RFPs as a necessary evil.

Your company may be in dire need of a modern ERP, but the thought of diverting productive time to the selection process is no less painful. ERP implementations don’t happen within the same company often, so professionals must learn the intricacies of the selection process in an environment that allows little room for mistakes and demands perfect decisions every time.

If you think that your procurement team has the skills to handle the RFP for an enterprise resource planning software, I encourage you to look again. In most cases, an RFP team includes smart and dedicated professionals who are not ERP specialists. Their starting goal may well be to create a document with an effective selection methodology, but in reality the RFP often turns into a cumbersome and disjointed mix of wishful thinking, outdated user requirements, and points that don’t matter. Wrong questions and focus points start a vicious cycle that won’t empower your team to make the best decisions. No wonder most companies dread RFPs.

Vendors dislike RFPs for other reasons. Poorly-designed documents often penalize experts for going outside the rigid checklist. Instead of approaching the process as a creative, dynamic, and responsive way to apply technology, bad RFPs treat an ERP system like a Lego block structure that’s made of interchangeable parts. Open conversation and dialog with vendors and consultants is often discouraged. Finally, it’s not uncommon to see RFPs that don’t allow sufficient time for a thoughtful response.

Is there any hope for the RFPs process? We believe so. In our experience, it’s possible to create an RFP that helps your team select the right vendor while also giving prospective vendors room to propose a holistic solution that’s powered by top-of-the-line thinking and technology.

Here’s what you need to know.

Your Blueprint for a Great RFP

Make sure you have the right people on the job

This would probably never happen at your company, but we have seen procurement departments struggle with technology RFPs. After all, choosing a software system isn’t even remotely similar to ordering paper towels and pens for the supply room! Make sure you have the right decision-makers in the room, including some future front-line users of the system. Honest user feedback can be invaluable in highlighting possible risks and resistance points. Armed with this information, your company will be in a position to make better decisions and build the optimal post-implementation plan.

Give It Time

ERP selection can dominate people’s schedules and hurt short-term productivity. Nonetheless, be sure to give your selection team time and resources to set up a thoughtful and effective selection process. Shortcuts may look efficient today but consider the cost to the company that may result from a poorly-informed decision.

Evolve Your RFP

Too many RFPs are stuck in the last decade. No matter how tempting this may look, think twice before re-using the RFP you created to pick your last enterprise resource planning system. Use this as an opportunity to re-assess your goals and objectives. Why do you need a new system? Why isn’t the old solution good enough? Provide enough background to give vendors insight into the business challenges you’re solving, so that their responses can be targeted and meaningful.

Don’t Limit the Solution

Resist the urge to build your RFP around a rigid checklist of dozens of must-have features. It may seem like a logical way to streamline your decision-making, but you may disqualify excellent vendors for the wrong reasons. Instead, create a list of must-have functionalities. Define your destination, and let technical specialists suggest ways to get there.

Software vendors are great at making their technology shine. It’s no wonder that most demos include the razzle-dazzle of features and impressive screen shots. In order to ensure you get the information you need to make the best decision, be sure to set clear boundaries on what you want to see. Your demo review team should include representatives from the departments that will be using the new system, as they may ask questions you wouldn’t have thought of.

Allow For (a Well-Managed) Dialog

Many companies limit (or worse, prohibit) communication with prospective vendors during the RFP process. That’s usually done to protect the selection team from being bombarded with phone calls and emails. An unfortunate side-effect is that this approach leaves solution experts out of the conversation. Consider giving your team the tools to manage communications with consultants and vendors instead.

Create a System

Product demos and team meetings for the ERP selection project can stretch over several months. You need a system for capturing your impressions, questions, feedback points, and ideas as you go. Create a tool that will support momentum and minimize loss of ideas and backtracking.

Best Practices in Creating RFPs

It may have been a while since your company has gone through an ERP selection process, but you don’t have to re-learn the hard lessons by making your own mistakes. Be sure to incorporate today’s proven best practices, such as placing the right people on the selection committee. Provide them with time and resources and inspire deep thinking about the problems they want to solve with the new software. Encourage dialog (both internal to your company and external communications with vendors). Finally, create a system for organizing your findings in a way that will support your momentum and capture valuable information.

If your team is considering its options when it comes to the ERP, call our experts at iNECTA. We have assisted dozens of companies with finding and implementing ERP technology solutions with excellent ROI and user acceptance.