There’s no denying it: We’re hooked on digital apps. In our personal lives, we use them for shopping online, ordering food, raising complaints, booking appointments, conducting surveys, and the list goes on. On an enterprise level, we use them to manage hiring and onboarding, automate payrolls and performances, resolve disputes, streamline workflows, etc.

And that’s not all. Have you ever wondered how a layman creates a website and deploys it in a matter of a couple of hours, complete with the integrations with payment gateways and various social media platforms? Or how organizations implement a whole new workflow management system in a matter of days?

This digital transformation has become possible due to the low-code and, more recently, no-code app development platforms. One does not need to learn to code, rely on IT, or hire an expensive team of developers to create apps. The low-code and no-code platforms provide a flexible and intuitive design space that is easily understood by business users. They can use this space and translate their requirements into scalable apps. In turn, these low-code / no-code apps can be integrated with existing apps and systems, such as ERPs or CRMs, to eliminate repetitive tasks and boost efficiency and productivity.

And this approach is here to stay. According to Gartner, the low-code/no-code app development market is expected to reach $13.8 billion in 2021 and these platforms will account for 65 percent of all app development by 2024. Understanding how they work is key to making the most of them.

What are low-code / no-code platforms?

The concept of Low-Code Application Development platforms is not new. Their history can be traced back to the 4^th generation programming languages (4GLs) and the rapid application development (RAD) tools of 1990’s and early 2000’s, which reduced the complexity of programming languages and increased app development speed. In 2014, analyst firm Forrester coined the term “low code.”

Low-code/no-code platforms are enterprise-level app development platforms that use high-level programming abstractions and metadata-based programming languages. They support scalability, disaster recovery, in-built security, service level agreements (SLAs), resource usage tracking, technical support from the provider, and API access to and from local and cloud services. Noteworthy, the businesses that develop apps using low-code/no-code platforms become the owners of those apps.

These enterprise-level platforms employ the RAD methodology, which essentially means that one can quickly create and launch prototypes, get feedback, and iterate further. They use visual components and drag-and-drop features that allow for easy app creation, as well as pre-built modules and easy-to-use API integrations that make the job even easier. Typically, low-code/no-code app development platforms consist of three components:

• Graphical User Interface (GUI) for programming, which is a drag-and-drop interface that allows users to define their inputs and outputs, create business logic, add app components to create the end-user experience without writing lines and lines of code.
• External Integrations, which allow users to interact with external databases via secure SOAP and REST-based web services visually integrated into the app.
• Application Manager, which comes with tools to build, debug, deploy, and easily maintain apps.

In other words, they allow business users to configure apps with little or no technical knowledge and deploy them with a single click.

Currently, both low-code and no-code platforms are clubbed together under Low-Code Development Platforms (LCDP). However, the recent rise of the No-Code Development Platforms (NCDP) is paving the way to a new, standalone NCDP market category.

Low-code vs. no-code platforms: how are they different?

No code is the evolution of low code. Even though the lines between the two types of platforms are currently somewhat blurred, there are a few distinctions that set them apart:

Programming/Coding Experience

The fundamental difference between a low-code and a no-code platform is the level of programming experience needed to successfully create apps. The former lets you fiddle with the source code. It provides editor components to make modifications in the source code and hence technical know-how related to Java, Java scripts, CSS, html etc. is required. The assistance of IT is also often required to make and troubleshoot code changes and is prone to manual coding errors.

The latter – as the name suggests – requires no coding at all, thus further increasing the speed of app development and delivery. With no-code platforms, users configure apps based on the features and templates provided in the application framework. They put together various blocks of pre-built templates and functionalities and this configuration is automatically converted to code. The user never sees the source code.

Target Users

Low-code platforms were initially aimed at increasing the productivity of developers by moving them away from traditional hand-written coding. Though these platforms are increasingly targeting business users, they still require a good understanding of certain coding languages. Scripting languages may vary. Some platforms allow commonly used language, others may provide their proprietary language that requires learning. Arguably, these platforms are ideal for skilled developers with coding knowledge.

No-code platforms, on the other hand, are ideal for both developers and business users – also known as citizen developers – who do not have any coding experience. Anyone well versed in business logic and decision-making can configure apps using a no-code platform. The focus is on rapid and flexible development by putting business users in charge of their own apps.

Ease of Use

Since no code is involved, the learning process associated with no-code platforms is shorter than that of low-code platforms, where users need to spend time on learning the associated language. This also reduces the implementation time of no-code apps as compared to apps developed on low-code platforms. In addition, business users can integrate the apps with existing systems without doing any scripting.

Level of Customization

Low-code platforms provide users with the ability to add and modify code, to make changes to their apps. The downside to this approach is that in case of technology upgrades, the app code might need to be adjusted.

No-code platforms, on the other hand, provide customizable pre-built modules or templates in the platform itself. They also ensure that the business logic of the apps that users build is separate from technology upgrades and shifts.

It’s time to get aboard the no-code train

Application development using traditional coding takes a long time, needs skilled developers, and incurs huge costs from deployment to maintenance to continuous upgrades. The current legacy infrastructures are outdated and costly to maintain and require an army of developers to make necessary changes. The added level of unpredictability that this decade has already brought makes it critical for companies to be able to respond quickly to market needs.

Clearly, no-code platforms bring great benefits, one of them being the ability to change and adapt fast. In spite of this, though, there are some misconceptions that persist.

For example, it is widely believed that they are only useful for creating standalone apps that do not scale well. This, however, is not true. No code is not just a movement for business users building and defining apps. The menu-driven setup process that is characteristic of no-code app development is incorporated into other enterprise functions too, such as data warehousing, processing, modeling, and workflows.

With no-code platforms, organizations are able to create enterprise-wide, database-enabled, integrated solutions. So it’s time to leave all the misconceptions around no-code behind and embrace it.

Bottom Line

Enterprises gain a competitive advantage when they are enabled to deliver faster, coherent, and comprehensive solutions. A unified, no-code platform with a flexible and scalable architecture like Optymyze allows for rapid deployment of multi-faceted solutions with ease. It empowers citizen developers to quickly and directly respond to their most pressing problems and to achieve self-sufficiency in creating and deploying apps that drive digital transformation.

To get a glimpse into how a no-code platform can benefit your organization, learn how Optymyze’s no-code data processing solved retailer’s challenges with complex points of sales data.

Check out the success story

This is part 2 of the 3-part “Failure Series” of blogs. In part 1, we took a deep dive into three common reasons why IT implementations fail. In this entry, we will be covering the costs that are associated with IT implementation failures and the implications they can have on organizations, beyond just monetary expenses.

If you have ever had a lingering feeling of doubt after making a substantial purchase or investment, then you have experienced buyer’s remorse. It’s a feeling that typically causes us to continue to evaluate options, consider what if? alternatives, and play out scenarios that make us question our purchases.

Often, the feeling is fleeting and unsubstantiated. But sometimes, buyer’s remorse translates directly to regret, and the effects of a misguided or hasty purchase compound and cause considerable costs.

This is particularly true when organizations purchase and implement new solutions. IT has become paramount in system-based operations and tech-heavy business models. There is a constant and growing need for updates and upgrades as the global economy shifts to one of digital transformation and cloud-based enterprise. But organizations must be mindful of the considerable risks involved with poorly planned and executed IT undertakings.

A PricewaterhouseCoopers study reviewed over 10 thousand projects from 200 companies and found that only 2.5% of these companies completed 100% of the projects they initiated. That is no doubt a small margin of success. And though these projects may be necessary to a business, they must be carefully thought out and weighed with alternatives. Part of that is the costs associated with a new IT project.

Let’s take a look at what these costs are and remember, these should be considered before purchasing a solution so that you can avoid buyer’s remorse and feel confident that your implementation project will be a success.

Time and Money – Direct Costs

These are the obvious items for any business or organization:

Purchase price

Implementing a new IT solution will have a price tag, which begins with the purchase price of the solution. There may be fees, taxes, and licensing costs, depending on the contract terms, as well as ongoing support or subscription expenses.

Human capital

Direct labor and wages must also be considered, as human capital is spent researching and evaluating possible solutions, project planning and system training, and finally implementation and execution of the project. Before an implementation even kicks off, there is already a considerable amount of money and human capital invested into most IT projects. What happens if these projects fail or derail?

Budget and schedule overruns

It is hard to assign a specific number with so many variables in play – company size, the scope of the project, scheduled completion, resources involved – but PwC found that IT failures cost the U.S. economy about $50-$150 billion annually. Even more shocking is that the Harvard Business Review found that an average of 27% of projects incur cost overruns, and more than 70% incur schedule overruns. Not only are these projects putting serious financial burdens on companies, but they are going over budget and over their estimated completion times, causing even more ramifications. It would make sense to cut losses and chalk these projects up as sunk costs. But it’s not always that easy.

When a new system implementation fails or gets abandoned, the financial burden compounds. More time and more money must be invested into finding a new solution that works or those same resources are invested into reverting to a previous system or process. With no guarantee either of these options will be beneficial, the impact of the failed IT project may continue to resonate well into the future.

Money or labor intended to go toward other budgets or projects is hemorrhaged to fix the mistakes. Those other projects in turn get delayed or abandoned due to the lack of dedicated resources, and the organization could find itself in a worse position than it started in, with multiple failed or abandoned projects, as well as time, money, and human capital wasted with little to show for it.

Failure Trickles Down – Long-Term Effects and Indirect Costs

Most organizations are able to put the above costs into perspective. Budgets, project timelines, resource management, and labor requirements are planned and allocated for. But numerous other costs should be examined, especially considering the low rate of success that most IT projects face. If a project fails or is abandoned, these costs become glaring miscues for the organization and have the potential to do serious harm.

The cost of disruption

The first indirect cost is the cost of disruption to the business, clients, and/or customers. Most new projects involve a period of transition where the new systems are adopted and users learn how to use them. This has the potential to slow normal operations down as users don’t have the same comfort level with the new system and the time it takes to complete tasks increases.

Naturally, this creates tension and frustration. Customers may not want to hassle with a new system and may take their business elsewhere. Employees may feel pressure as their production slows and they miss their targets. These not only lead to a potential loss of revenue, which further impacts the bottom line for the organization, but they also cause a loss of faith in the organization. This is especially true when an IT project fails.

Unhealthy business

We know that direct costs are plentiful, as more time and money are spent on projects to attempt to keep them afloat. But another indirect cost is the well-being of the organization itself. A McKinsey-Oxford study revealed that 17% of IT projects go so bad that they threaten the very existence of the company. One example given was a retail chain that invested $1.4 billion into modernizing its IT systems only to abandon the initiative shortly after it kicked-off. However, realizing they began to fall behind their competitors, they invested another $600 million into an improved supply chain management system, only to have that project fail. These IT project failures – and their whopping price tag just shy of $2 billion – forced the retailer into filing for bankruptcy.

Emotional cost

It’s not just a company’s reputation that is at stake. The people involved are also at risk. IT implementation failure is a tough thing to face, especially with such high dollar amounts tied to it. There is often a need to point a finger and assign blame to a person or team of people and hold them responsible for project failures.

This has serious consequences for individuals. Imagine if it were you that was blamed for a million-dollar failure. Your employer may lose trust in your ability to make decisions or lead others. Your teammates or subordinates may not have faith in you to manage them or delegate responsibly. You could lose the same trust and faith in yourself. But worse, a big enough failure could lead to you and your team losing your jobs.

Buyer’s remorse is a funny thing. We only experience it after the fact. But since we all know what that feeling is, we can hope to do everything in our power to avoid it. Part of that involves weighing all of the possible tangibles and intangibles, pros and cons, direct costs, and indirect costs against one another to make the most educated decision we can make.

Though IT projects don’t have the best track record of success, that doesn’t mean that they aren’t important or should be avoided. It means that there are risks involved with these types of projects. Investment in them should be calculated. Evaluation of them must be done carefully. Understanding the IT implementation failure costs, both direct and indirect, that may come into play before, during, and after an IT implementation can help navigate the uncertainties that may arise. Organizations can put themselves and their people into better situations to overcome common pitfalls and be better positioned for implementation success.

There are plenty of other ways to do this, and that’s where we’ll pick up next time, in our final entry of this 3-part series, “How to Avoid Failure.”

In the meantime, check out this success story of how a data giant successfully implemented a software solution to address their sales compensation challenges and achieved outcomes beyond expectations.

Check out the success story

If a sales organization creates a great incentive compensation plan, but the sales team fails to execute it efficiently, is it still great? Companies often go through an entire process of assessing the current incentive compensation plan and adjusting it or creating a new one to align with the latest strategic needs. But they often rush into rolling out the changes without a clear compensation plan communication, which is key to the overall success of their sales compensation program.

When you announce a new sales compensation plan to salespeople, do they ask the following questions?

• Why is this new plan better than the old one?
• What’s in it for me?
• Why should we bother to go through changes (again)?

You’re not alone. But salespeople aren’t trying to make your life hard; it’s natural for them to wonder about changes that affect their daily activities and compensation. And it’s in the best interest of the sales organization to meet these questions with the right answers, at the right time.

Communicating a compensation plan is not only a necessity, but an opportunity to get salespeople on board, to motivate them, and to make sure the organization will accomplish its goals. You already have an eager audience, as salespeople will always be interested when it comes to sales compensation management. So how should you go about communicating a compensation plan in the most effective way?

Here are some tips for clear compensation plan communication:

1. Be clear on the “what,” and offer examples

What do sales reps need to achieve to be successful? Create compensation plan scenarios to help them better understand how the plan works and more clearly envision the behaviors that the organization expects of them.

Sales reps are people who want to see and hear, not read and study documentation. Use examples, create rich visualizations, and present the plan in person.

2. Show the “how” of compensation 

Explain the process behind the creation of the new incentive compensation plan, including details about the feedback you gathered from stakeholders, the assessment you made of the old plan, and the business objectives and market trends you took into account. Also, mention the people who participated in the plan creation process, as involving respected team members helps validate the plan.

Reps may not always like a new plan, but you can increase acceptance by eliminating any perception that it came from a mysterious compensation black box.

3. Explain the “why” behind changes 

Salespeople can execute adequately enough without fully grasping the reasoning behind changes. But understanding the big picture helps them move forward without losing sight of where they’re headed, and why. Nobody wants them to get lost along the way. To truly motivate your sales force, provide them with insight into the thinking behind the new plan.

4. Think like your audience

Salespeople depend on the sales compensation plan for their livelihood. Make sure that reps understand how the new plan can help them achieve the best results. In this way, leaders show true empathy for their staff while leaning into the plan to turn business objectives into reality.

5. Have a dialogue

Communication is not a one-way street. To ensure your reps understand their compensation plan, gather feedback and questions. Train managers to answer any queries with interest and authenticity, and schedule one-on-one meetings with reps who feel shaky about the change. Also, provide a path to escalate problems and misunderstanding.

6. Keep communication channels open

Gather feedback constantly, and make sure reps feel confident along the way. Hold managers accountable for how well reps understand and execute the plan, as they play a crucial role in carrying out your compensation plan communication strategy.

Above all, make sure compensation plan communication is not an afterthought, but a well-planned process. Prepare documentation in advance and train the leaders and managers to thoughtfully deliver the message to the sales force. When communicated clearly, a great sales compensation plan sets the stage for top sales performance.

Learn how the Optymyze solution for Sales Commission Management helps organizations like yours effectively communicate new or updated sales commission plans to their salesforce.

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Market and internal changes trigger frequent updates to territory assignments. When mishandled, territory adjustments become labor-intensive, leading to lower productivity and territory imbalance – a costly problem regardless of the size and scope of the company. 

Ideally, sales organizations will run and compare various alignment scenarios that capture customer count, demographics, location, and other factors when planning territory adjustments. The process should ensure that reps are placed in territories with the most potential and that sales leaders make good use of their time and skills, basing their decisions on hard facts, not guesswork. Without a sound process, however, territory adjustment can be a bumpy ride. When adjustments are made after quotas and compensation have been planned for the period, impacting pay and managerial expectations, that ride can get even more precarious.

Some common challenges are:

1. Making timely adjustments to territory alignments

Often triggered by change, whether it be externally driven by new trends and market directions, or internal – as in the case of new hires, product changes, and the typical sales turnover (sounds familiar, right?), the need for adjustment can be unpredictable.

For example, a Sales Manager may decide – based on new market research – that mid-size pharma companies should also be targeted in EMEA. But hiring salespeople for those accounts is a lengthy process. To make sure he seizes the opportunity before his competitors, he might decide to adjust territories for five of his reps and split EMEA between them.

2. Using manual processes

Manual processes, still in use by many companies, can result in damagingly slow response times. With questionable results. Moving reps from one account to another, and splitting or collapsing territories, is often prone to errors and second-guessing. To reap the full benefits of territory management, these decisions should only be made after careful consideration.

In addition to deciding which changes should trigger a territory adjustment, sales leaders face another challenge:

3. Allowing time for changes to become effective

Happily, leaders can distract themselves from the problem of waiting by trying to crack a different tough nut: communicating changes and ensuring their adoption. But… we all know that sales reps come and go faster than a toupee in a hurricane. Without an efficient territory adjustment process and automated communication, chaos can ensue.

So how do you address these challenges?

The answer lies in data-driven territory adjustments:

The right time and place

Speaking of reps, they’re not more likely to enjoy constant change than anybody else, so be cautious about making territory adjustments too frequently. And make sure each one is truly necessary. Whether you propose new alignments based on external or internal triggers, do your research before implementing them in the field. In some cases (M&As, for instance, or major changes to product strategy), you might need to return to territory modeling and planning with these new critical factors in mind.

It’s all in the data

Ever notice how some sales managers brag about making decisions based on gut instinct? Sometimes, they seem uniquely gifted, even heroic. Stop right there. Before you let this type of thinking deepen doubts you may already have about your own intuitive skills, keep in mind that territory management is much more a science than an art. You’ll know it in your heart won’t help you create an efficient territory adjustment process. Rather, know it in your data. Look at metrics such as workload balance, number of accounts, customer segmentation, sales rep location, lead distribution, revenue, and revenue potential to pinpoint unbalanced territories and make gentle or sweeping course corrections.

Also, tap into best practices for support. Years of experience in the field have shown us that changes to one or more of the following variables often necessitate territory adjustments:

1. sales rep performance
2. sales rep turnover
3. salesforce size strategy
4. market structure
5. competition
6. customer demographics

Figure out the WHOs

For a successful territory adjustment process, managers and analysts need to answer more than the “WHEN” questions. They need to answer the “WHO” questions as well. Who, for instance, is entitled to propose and evaluate adjustments? When adjustments go live without having been evaluated and approved by someone with a holistic vision of all the pieces that constitute sales performance management, reps may end up in situations that eat away at their motivation and spur territory infighting and confusion.

Make sure you have a clear process in place, as well as advanced capabilities that help you track, approve and communicate changes. Enabling technologies should also account for exceptional scenarios, such as those that led to the revocation of any given user’s rights to propose or validate adjustments.

Collaborate and be transparent

To ensure optimal territory coverage and prevent the disputes referred to above, sales managers and sales operations need to work collaboratively. Shared visibility into the territory management process increases teamwork and makes the benefits of working together plain. When everyone involved in the process has quick and easy access to status updates, the by-product is immediate awareness of the proposal, approval, or rejection of any given adjustment. They can then react accordingly. And, by extension, effectively.

Analyze impact

Sales ops need to rely on powerful enabling technologies to analyze the potential overall impact of proposed adjustments and to prevent other impactful, simultaneous changes to live data.

Depending on their industry and size, sales organizations need to regularly compare the estimated benefits of proposed adjustments with actual outcomes. A follow-up analysis will help leaders understand whether they made the right decisions.

Some organizations lack the time and expertise necessary to make advanced analyses and ensure successful territory adjustments. To address their needs, the Optymyze solution for Sales Territory Management simplifies and automates the entire process. Learn now.

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Imagine if, during your typical workweek, you had to deal with rejection throughout the day. Imagine hearing dozens of “noes” and yet picking yourself up every time with a big smile on your face and a new dose of enthusiasm. That’s tough. You may wonder what keeps them going forward. How do they maintain their energy and optimism? The answer is motivation. And motivation comes with proper sales compensation.

Sales compensation is a powerful tool when it comes to influencing sales behavior and improving sales performance. But for most companies, designing an incentive compensation plan that motivates the sales force and spurs specific behaviors is a major concern. As it should be: Nothing matches the power with which sales compensation inspires sales performance. Peak Sales Recruiting’s 2019 Sales Compensation Study found that only 25% of respondents were satisfied with their compensation, while 39% were neutral and 30% dissatisfied – and dissatisfaction can result in losing top competitors to competitors.

So, how can you design incentive compensation plans that will keep your sales force motivated and continually push them to reach new heights?

1. Align sales reps’ targets to company goals

Aligning your goals for the sales team with company objectives is paramount when building a plan that works for everyone. What is the organization’s most pressing current need? Acquiring new customers? Customer retention? Profitability? New product distribution?

If acquiring new customers tops your company’s agenda, design a plan that rewards signing new clients. Similarly, if all eyes are on launching a new product, consider introducing a sales commission or bonus opportunity to reward sales reps specifically for their contribution to a successful launch.

But no matter what your organization’s immediate focus, ensure your incentive compensation plan is easily adaptable. In order to stay relevant and keep your business growing, changes to the plan, whether strategic or structural, must be easy to implement. When corporate or market changes hit, or a merger or acquisition requires unexpected adjustments on everyone’s part, you’re going to need that built-in flexibility. If sales leaders are able to make quick modifications to the plan and by extension drive specific selling behaviors towards achieving new goals, the entire organization gains agility and flexibility.

2. Find the optimal pay mix

There’s no question that money is the most powerful motivator for reps. Whether you want to entice successful salespeople to join your company or ensure that your top sellers don’t leave, you need an incentive compensation plan that is at or above the market.

Once you decide how much each rep will be paid in total, you need to determine the right mix of base salary and commission. In your plan, the ratio between base pay and commission may differ from rep to rep: An experienced salesperson, for instance, might demand a higher percentage in base salary, while a rep who’s just starting his career may be willing to work almost exclusively on commission.

3. Set fair and achievable goals

When incentive compensation plans base rewards on sales goals that are almost impossible to achieve, reps get frustrated and lose motivation. The best incentive compensation plans challenge salespeople while at the same time rewarding them for meeting reasonable target levels.

4. Keep the incentive compensation plan simple

Plans that are written in legalese or weave in an abundance of unnecessary components may well backfire. This is due to the simple fact that they may not be understood, and therefore result in reps reverting to methods that may have worked just as planned to achieve previous goals but bear little relation to current company objectives. Say, for instance, that your company has recently launched a new product. The compensation plan has been redesigned to incentivize reps to sell it, but most of your salespeople have such a hard time deciphering the message, they just continue to focus on selling the old products. The result: Everyone loses money, and the launch goes nowhere.

On the contrary, well-written incentive compensation plans clearly indicate the company’s goals, the outcomes that will be rewarded, and the exact amount of money salespeople will receive for meeting targets. Your reps will spend less time worrying, and more time selling.

In addition to facilitating compensation plan communication that’s direct and accessible, a sales performance management (SPM) solution can make life easier for both leaders and the sales force. A solid SPM solution will not only provide reps with the opportunity to ask questions but will also, when necessary, allow them to quickly convey compensation issues to administrators. Equally important, access to commission registers and reports will enable them to answer their own questions by viewing and drilling down into results. When implemented correctly, an SPM solution improves sales satisfaction and serves to motivate your team.

5. Make timely payments

If you want your plan to induce specific desired behaviors, you need to make it effective as soon as you know the objectives your company is striving to meet. When your salespeople achieve their target, they should be rewarded immediately, and when they fail to meet their goals, the loss should be reflected in their paycheck.

For a sales rep, every workday has its difficulties, and rejection is just one of them. But knowing the challenges salespeople experience and the incentives that drive their best performance will help you build a strategy that infuses your team with the confidence and motivation it needs in order to achieve sales success.

Looking for a sales commission system? Learn how the Optymyze solution for Sales Commission Management simplifies and automates the incentive compensation management process, yielding outcomes beyond expectations.

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Looking for a Sales Performance Management (SPM) solution? As with any large enterprise purchase, you are probably getting ready to embark on a procurement journey, the better part of which represents the traditional Request for Proposal (RFP) process. If you think it’s an efficient, effective way to find the best SPM solution, you are likely mistaken.

What’s wrong with RFPs?

Traditional RFPs are Dead on Arrival (DOA)

Now, the purpose of an RFP is, indeed, to provide an organized and efficient way for the buying group and the stakeholders to learn about the options available and to make an informed selection. However, as you’ll soon discover, the traditional RFP approach defeats this purpose.

And here is why – the traditional RFP is:

1. Time-consuming. An RFP process can last more than seven months from start to finish. Add-in contracting and solution deployment time, and more than a year and a half can go by before even realizing any outcomes. Was that the original intent? To spend more than a year to realize benefits?
   
2. RFP requirements gathering. When putting together the RFP requirements, buying companies do not always have the internal expertise to ask the right questions (sometimes uncomfortable questions). They often rely on analyst reports that fail to recommend crucial functionality or to focus on integral processes. Or they have a fixed and restrictive idea of what the solution should do. For these reasons, RFP content is often incomplete or misses the point.
   
3. Resource-intensive. Gathering requirements, engaging with analysts, contacting vendors, reviewing submissions, and then meeting with each vendor for demos and POCs is a tedious process. Not to mention, that canned demo you received – couldn’t you have experienced that much earlier in the process for yourself? 
   
4. Inflexible. Technology is evolving fast and by the time the RFP questionnaire is finalized and sent to vendors, new features and innovations might have hit the market – which the questionnaire does not cover. So, the buying team ends up evaluating offerings based on outdated requirements.
   
5. Biased. Let’s face it: Many decision-makers at buying companies typically have their mind made-up before the process even starts. Some provide information “off the record” to their preferred vendor, giving them an advantage over the other suppliers. Even worse, some companies go ahead with the RFP process just to comply with procurement procedures. In the end, those who end up losing are the stakeholders – the people who will be working with the selected solution the most.
   
6. Abstract. In many cases, the buying decision relies heavily on vendor responses – all wrapped up in marketing speak – and their ability to deliver a “demo” (half of which could be vapor) versus the stakeholder’s ability to gain hands-on experience with each offering. Failing to gain hands-on experience, stakeholders do not have a reasonable understanding of what it would be like to work with each solution and vendor daily. So basically, they are deciding about enterprise technology without even knowing what it is like to actually use the software and work with the support.
   
7. Ineffective. Asking vendors to fill out a common-denominator RFP means shoving them all into the same box, which forces them to compete on price AND removes any semblance of innovation and differentiation. Ultimately, this leads to purchasing a half-rate solution or to making a significant compromise on crucial functionality.

In other words, the traditional RFP is DOA!

…And yet, the traditional RFP approach is still being used today

‘Why?’, you may ask. There are quite a few interesting reasons:

• To give Procurement the ability to compare apples-to-apples.

In an apples-to-apples comparison the various vendors end up competing on price, which ultimately translates to “a good deal”, at least in Procurement terms.

But what happens when one vendor is an orange in the apple basket?

The buying group misses out on value, precisely because the “orange” vendor is forced to fill out a common-denominator RFP to fit the “apple” format. As a result, rarely will an orange – wrongly considered an apple – get a real chance to demonstrate its true value.

• “Because it’s an industry standard”.

Industry standards are crucial to the well-functioning of markets and businesses.

But what if the industry standard for RFPs evolved into an effective and efficient process – free from the inefficiencies listed above?

The buying group would benefit from a transparent assessment of each solution they are looking at, a fair comparison based on value, and ultimately, an informed decision on what solution is the best fit for the entire organization, including the people who will be using it daily.

• Companies rely heavily on their relationships with analyst firms – who influence the industry standards!

But what if the buying group does not have internal expertise and also base their RFP requirements on analyst guidelines?

They may be missing out on opportunities as many industry analyst definitions and guidance on RFP requirements are incomplete or misaligned to company needs. Here’s why:

1. They put very little emphasis on data management as being a crucial process for SPM and does not outline the “dirty data” challenges most companies face after signing the contract with certain point solution vendors. Discussions about data management for SPM should be had long before the RFP process even begins, to avoid common change orders and costly implementation delays.
2. They put virtually no emphasis on capabilities that help the buying group to expand and evolve SPM programs. This too represents a great loss for the buying group; discussions about expansion opportunities should be held early on so that they can get an idea of the true value of the solution they are assessing. Do point solution vendors really think needs won’t change in the future?

So what is a good way to effectively assess the true value of an SPM solution?

Glad you asked. The answer is hands-on experience using the actual solution, learning what the solution does, engaging with solution experts on the vendor side on a daily basis for questions and guidance, and exploring the possibilities beyond current needs.

Forget shiny demos and canned RFP responses!  Emulate how you and your colleagues across disciplines would actually use the solution day-to-day.

Any vendor confident in the value of their solution should be more than willing to offer this type of access to the entire group of stakeholders involved in the buying process. So the stakeholders themselves can explore and learn about the solution at their own pace.

Only when all the stakeholders feel confident the solution will make their lives easier, that is when you know you’ve found the right one for your organization.

If you’re evaluating SPM solutions, you may want to look at a comprehensive SPM competitor analysis that takes into consideration all the points above. Get to the essence of the differences between SPM vendors and their solutions and bring more clarity to your assessment.

Check out SPM competitor analysis