Original Source: Nearshore Americas
“Tom Young from Information Services Group helps explain why the days of the stringent, 1,000+ page request for proposals (RFP) might be numbered. For many CIOs and sourcing executives, the tried and true “Request for Proposal” (RFP) is no longer serving its purpose as executives wrestle with ways to more nimbly and more accurately communicate complex outsourcing requirements to vendors. We checked in with Tom Young, a partner at Information Services Group (ISG) to find out why the days of the stringent 1,000+ page RFPs might be numbered.
The RPF Strangle
“We often hear complaints that RFPs strangle innovation because they are very prescriptive,” said Young. “They are not dead by any means, they are just not the growth in go-to-market solutions. CIOs know that long and detailed RFPs are not the best way to go when looking for a provider to solve a complex service requirement.” In its place comes the “Request for Solution (RFS)” approach, more suited for programs that have ambiguity or strive to be transformative. Historically, RFPs fluctuate in terms of their detail and rigidity. Also common is working with top bidders to develop collaborative solutions that characterize the formal service level agreement (SLA). Although a looser RFP and collaborative working sessions with top bidders may yield more flexibility for the market to propose solutions to ambiguous problems and for transformative change, the RFP’s dogmatic nature still constricts creativity.
But what does the RFS really do?
“An RFS is much less specific, it still has requirements, but they are more general,” added Young. Essentially, you are asking for more out of providers when you are not prescribing the exact formula for the solution. People behave differently when they are asked instead of told. “If you are unsure about what you want from the marketplace, often when innovation is involved, do and RFS and let the marketplace offer solutions instead of issuing prescriptive RFPs that close off thought.” “You have a lot of solutions that come back that don’t all look the same,” said Young. “That is followed with switching the traditional RFP contracting process with “collaborative contracting” where ISG acts as sort of an arbitrator between the service provider and the buyer.” In terms of bidding the job, the normal formula dictates issuing the RFP to a few approved providers and those few providers spend a lot of time and money to amply respond. The field has to be narrowed because no smart provider would spend a lot of money and resources vying for a contract they had little chance of winning. RFPs change that prototypical condition because providers can respond spending a lot less resources…”
https://www.nearshoreamericas.com/outsourcing-request-for-proposals/
Contributors: Open SourceCategories: Industry Articles, SIG U Resource
SRC Type: eSourcing and Tools, Procurement Operations