Proposal

Does the RFP Process Hinder Innovation?

I haven’t written very much about procurement, but working with professional buyers and professional sellers has always been a large part of my work.  I help them communicate.  Often times, I’m helping them communicate via proposals that I’m constructing at all hours of the night or thousands of miles from home (most recently from Tampa, Florida) – it’s good times… to me, at least.

Sometimes organizations know what they want to buy, sometimes they just have a problem and need a solution.  So they put up some form of Request for Proposals (RFP) that basically outlines what they need and anyone who is able, or eligible, to respond, can go ahead and write a proposal to address whatever is needed.  Business owners, or their hired proposal writers, need to know how to explain the value they provide very thoroughly, on paper in a very strict format.

Working in business services like I do is often a bit of a luxury.  Most of proposals can be fairly creative, but, at other times they are not.  Quite often, the organization that would like to buy something dictates exactly what they want a proposal to be and exactly what services or goods they expect.  This can be helpful for them because they get what they are looking for, but hinder the ability for some firms to put together a creative response that’s actually more helpful to the organization than what they originally asked for.

After announcing on Twitter that I was attending a seminar on procurement today that was managed by some great people at NECI, Shane Gibson posed an interesting thought:  “I’d like to know if they think RFP’s quell innovation?”sg_twitter

I didn’t get to pose the question during the seminar, but I do have some thoughts on this after responding to over 80 RFPs since 2003.  I’ve found that organizations sometimes prohibit innovation by virtue of the RFP (whether this is intentional or not, is beyond what I’d like to write here), but I don’t have a yes or no answer.

Sometimes the pricing structure they demand isn’t the structure that will give them the best options, but they don’t know any better or don’t particularly care.  Sometimes they don’t know what they want, but by being as specific as possible they feel a certain comfort level because the responses can be expected to be less open-ended.  I think that their comfort level is misguided and really closes the organization’s mind to what may be the best solutions.

I find that every once in a while though, an organization will know that they don’t know, make the assumption that someone out there does know and can give them the solution.  I tend to see this with organizations looking for new software solutions, but not quite as much with staffing, specifically.  It’s my belief that unless organizations leave these doors open wherever possible, not where comfortable, but where possible, they won’t receive the most innovative solution.  The RFP process provides some accountability and formal basis for a prospective relationship, but too often an organization will mistake this for a rigid solution or service.

Without innovative solutions, an organization is really quelling innovation in their own space, in their industry and ultimately making them less competitive one RFP at a time.  It’s a real slippery slope in my mind.

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