RFPs: Keep It Simple, Stay Focused

This is a guest post by James M. Spitze, Executive Director (emeritus) of the Fisher Center for CIO Leadership at the Haas School of Business, UC-Berkeley.

In my 30+ years as the Managing Partner of an IT-focused management consulting firm, I oversaw several RFP response evaluations. Since my firm was normally only called in when someone was in pretty deep trouble, I often saw some really great mess-ups. The following is one of the more memorable ones.

One morning my phone rang. It was the EVP/CFO of one of Silicon Valley’s most rapidly growing semiconductor equipment manufacturers. It had grown from $50m to $650m in 2-3 years and still had its original senior management team. They worked well together and the entire company sort of “hummed.” Basically, a “fun” client.

Besides having a stable and effective management team (a good thing), they also had a stable set of business processes and systems – not such a good thing for a company that was now ten times the size of when those processes and systems were installed.

Their audit firm had commented on this and offered to guide the selection and installation of replacements. The central item was a new manufacturing planning and control system. The audit firm developed and issued a massive RFP with about 400 (yes, really!) criteria. It went to just five large and respected potential providers, all of whom responded. The RFP development, issuance, and response gathering took about four months. A month or so later is when I received the CFO’s call for help.

The audit firm’s team (a full Partner plus two helpers) were onsite almost fulltime, holding large all-day meetings with around ten senior users of the new processes and systems. The meetings were devoted to extended discussion of each reply to each of the 400 criteria. The attendees were beginning to complain – with increasing volume. The CFO asked me to sit in on one of the meetings as an observer. The audit Partner didn’t like the idea but got nowhere with the CFO who in essence said, “Cool it.”

I was introduced at the meeting as the CFO’s representative which should have put the audit firm’s team on high alert. The agenda for the day was criteria #45 (or thereabouts). I simply sat like a bump on a log, taking only a few notes and saying very, very little … in effect trying to let the meeting proceed as it would have had I not been there.

It was scheduled as an all-day meeting. At noon lunch was brought in. Most of the company’s attendees went back to their offices to get something useful done but dutifully returned at 1pm. We adjourned at 5pm and I walked over to the CFO’s office.

After some preliminary discussion, I advised him to cancel the meetings at once and to tell the audit firm’s team that their work was done. He had already heard more than enough from within the company … so, he accepted my advice. He and I pulled together a small team of users (fuzzy memory here; maybe just four or five), and I guided them in pruning the 400 (or so) criteria down to a much more manageable two dozen (or so). Then we assigned weighting factors to each of the criteria.

There was a very bright women from Finance on our team and a similarly bright guy from Manufacturing. I asked them to lead the team in giving a “1 to 5” evaluation to each criterion for each respondent – and I went home saying, “Call me you’re your done … but let the CFO know what you’re up to.”

Two days later I got a call from the CFO, “Ok, Jim, they’re done. Get back here.” I obeyed and we did a Kepner-Tregoe ranking. Two of the respondents were eliminated. After some discussion, a third was cut, leaving us with two. The woman from Finance, the guy from Manufacturing, and I met with the CFO and gave him our results … and he marched us all into the CEO’s office to explain to him where we were.

Of all the many fine executives I had the pleasure and honor to meet over my several decades working in Silicon Valley, this CEO tops the list … wicked smart, effective, fun to work with. He listened carefully, asked a few darn good questions, and said, “Let’s take a vote of the management team … all the VPs and Senior Managers in the entire company, about forty folks.

The meeting took place a few days later. I explained where we were and the CFO and CEO did a great job of clarifying. Then we took the vote (by secret ballot) … something like 22 for vendor A and 18 for vendor B … too darn close for such an important decision.  We sat there and stared at each other … What to do?

Finally, the CEO suggested we take a negative vote; which of the two vendors do we NOT want to work with.  Blank slips of paper were handed around, the management team voted, and I counted the ballots. One vendor was clearly more disliked than the other. I was asked to call the winner and the CFO said he would call the other.

There are several takeaways from this. Besides the obvious that some audit firms are better than others (and my experience is that most of the larger and older ones are, in general, pretty darn good – the example here being the exception), the key takeaway has to do with the vendor selection criteria and process.

In this case, the end goal got lost in an apparently endless evaluation process using far too many criteria. Those within the company saw a series of long, boring meetings and no end in sight.

Popcorn RFP is clean, adaptable, and swift. Humans can always muck it up by coming up with too many criteria – and no support product can stop that – but if that is avoided, then Popcorn RFP is a great tool to use.

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