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:
- 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?
- 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.
- 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?
- 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 So, the buying team ends up evaluating offerings based on outdated requirements.
- 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.
- 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.
- 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:
- 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.
- 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.