Seven predictions for RFPs and RFIs.
Posted Oct 1, 2005
No one knows stress like a proposal manager. Today's proposal professionals are plagued by an onslaught of RFPs and RFIs that seems to be growing in volume and complexity every day. Responding to RFPs involves a myriad of cumbersome tasks that must be performed under extreme time pressures. For example, assembling and compiling content into hundreds of pages of text from various electronic documents and files; collating preprinted documents into custom prepared questionnaires; and making a final mad dash to mail the submission by unmovable deadlines. It's a wonder how few deadlines are actually blown, or that the proposal team somehow manages to provide their best content.
Does senior management care that being in the RFP/RFI response business is like being on an endless, punishing treadmill? Or that proposal teams are stretched to the limit? Not really. From their vantage point, proposals simply, somehow, get done. Despite the fact that RFPs are the lifeblood of commerce, that responding to them is one of the most critical components of the sales and marketing function, many proposal managers feel as if they get no respect. And the proposal tsunami is only going to get worse, not better. What's the answer? Here, seven predictions concerning the future of RFPs and RFIs. However, the proposal tsunami can be not only survived, but mastered. Technology is poised to make that possible.
Prediction #1: RFPs and RFIs are never going away.
Most buyers and sellers are brought together by a middleman. The more complex the purchase, the more intense the process, and thus, the more important is the role of the middlemen. In the case of RFPs, these middlemen are the consultants whom companies hire to advise them on major purchasing decisions. When a corporation signs on a health care insurance carrier for thousands of employees, for example, the costs of a mistake can be huge. To avoid catastrophic errors the largest and most sophisticated companies frequently call in consultants to bring expertise and guidance to the selection process.
How do consultants add value? They do so by having the best market information--by having their pulse is on the market. The more and better market intelligence the consultant can offer, the more insight and value he brings to the client--and the larger the commission or fee he can charge. How he obtains these critical insights, and how he maintains their expert vision of the market, is by using the formalized tool of RFIs.
Prediction #2: The volume of RFPs and RFIs is going to get worse, not better.
There are two major reasons for this:
1. Shorter client relationship life cycle. There is no question that with today's rapid information flow, the virtual world is shrinking. Competition is now global and more intense than ever before. At the same time, the pace of business is accelerating. The life cycle of the average client relationship is much shorter than the business world once relied upon it to be. A shorter client relationship life cycle means that clients are actively open to competing bids from new vendors more frequently. This directly leads to more RFPs.
2. Formalization of the purchasing department. With increased downward pressure on prices resulting from increased global competition, one of the few remaining ways for a corporation to boost profitability is by reducing costs. The pressure to reduce expenses and head counts is enormous. This formalization of supply chain management to reduce costs cuts across virtually all industries.
To respond to these pressures, these supply chain professionals will resort to issuing more, not fewer, RFPs and RFIs over time. This is not news to the overstressed proposal manager. Nor is it welcome news to the sales and marketing senior executive whose least desirable tactic is to add headcount to his overworked proposal team.
Consultants don't seem to care about the RFP respondent, perhaps because they are feeling not only stressed themselves, but challenged. Being the recipients, consultants are submerged in their own sea of RFP and RFI data and paper. The only way to keep from drowning, they are discovering, is through technology, hardly the consultant's strong suit.
Prediction #3: RFPs and RFIs will increasingly move to Web-based questionnaires and forms.
But aren't we already doing this today? What will be different? The answer is XML.
XML will make a world of difference in how consultants and proposal professionals manage the RFP/RFI process. What's different about XML is that it embeds information in every field of every table or form on the Internet. XML allows applications to do things they could not do before, such as allowing applications to work unattended. XML is truly the programming language for the 21st century. Think of it as the GPS--the Global Positioning System--for all future computer programs and Web-based forms.
What this means for RFPs and RFIs is that XML will allow the proposal team's database and proposal assembly tool to communicate directly with the consultant's Web-based RFPs and RFIs. Thus the entire process of responding to RFPs will be vastly accelerated and streamlined.
XML will simplify this process exponentially, because the respondent's XML data base information can be directly linked with the consultant's XML form; one click updates the form with the appropriate data. Just imagine how many man years of time will be saved by the elimination of all that cutting and pasting in Web forms.
Prediction #4: Web Services will emerge as a key proposal management tool.
What are Web Services? Driven by XML, Web Services are programs that will allow two different Web-based applications or computers in different locations to talk to and interact with each other, completely behind the scenes. The importance to proposal professionals of this major technological leap cannot be overstated. Not only will Web Services further automate the RFP and RFI process, they will eventually make today's RFI obsolete.
Prediction #5: Web services will replace today's RFI.
Here is the really good news: RFIs will go away as we know them today. As consultant databases are linked to proposal databases using Web Services, and with the appropriate permissions and security measures, Web forms will automatically update themselves. If this sounds farfetched, it's not. Proposal professionals are already prepared to provide this information today. And proposal database technology, available on the market today, is already equipped to do all of this.
Prediction #6: In the future, consultant and company proposal databases will be automatically linked.
Today consultants and companies are developing their technologies in a parallel evolutionary process. I predict that within five years the technology will have evolved so far that cutting and pasting into Web forms will have gone the way of IBM punch cards. Web Services will allow the proposal team's XML database to automatically link with the consultant's XML database. The result: no need for RFIs.
What should proposal professionals be doing today to meet this profound change in the proposal process? Three simple answers:
1. Companies should build a proposal database using an XML-enabled tool.
2. This database should be automatically updated throughout the enterprise.
3. Proposal professionals and senior management alike should lobby for as much company-to-consultant automation as possible.
Companies that successfully carry out these three steps will be directly poised to reap the benefits of my seventh and final prediction.
Prediction #7: Technology will offset the increase in RFPs and RFIs, keeping headcount flat.
With the increased volume of RFPs a certainty, there is no doubt that everyone will be busier. But technology-driven efficiencies will enable proposal professionals to meet the proposal tsunami head on.
Yes, it's about efficiency. But even more it's about enabling the proposal professional to add value. Because proposal professionals1 tools will be better, the quality of how they spend their time will be vastly improved. Proposal professionals will be focused not on tedium, but on producing quality content. Surely the day will come when proposal professionals will command respect--more for the time they spent adding value to proposals, and less on the drudgery of assembling them.
About the Author
John Laurino is CEO of Proposal Software, whose flagship product is Proposal Management and Production System (PMAPS). Developed in 1994 and now in its ninth generation, PMAPS is a comprehensive proposal management platform developed for large-scale organizations that must continually respond to a high volume of sophisticated RFPs and RFIs under tight deadlines to maintain their sales momentum. PMAPS is currently in use at more than 100 major health care, financial services, and Fortune 1,000 companies worldwide. Visit Proposal Software.