Many IT companies make the mistake of skimping on marketing to save money, and rejoice when they count how much money they've just saved.
But this joy is rather short-lived when they realise that if they don't market, they have to engage in the ultimate money-wasting activity: Responding to RFPs and battling it out on price with corporate minions, Mini-Me-s and a motley assortment of self-important and self-glorified flunkies, a.k.a. procurement agents who are hell-bent on finding the lowest bidder for the next project.
Have you read proposals that IT firms submitted to competitive bids based on ill-contrived RFPs?
You most probably have.
Have you noticed something strange?
What I've noticed is that these proposals are full of seller-centred materials, superlatives, useless platitudes, features, meaningless certifications, processes and good ol' self-aggrandisement.
What many IT companies fail to realise is that there is a world of difference between proposals based on RFPs and submitted to procurement bureaucrats as competitive bids and proposals submitted to a committed real buyer as a value proposition.
And when buyers notice that sellers write their proposals in server room English, the boardroom folks relegate proposals to the server room people. And decision-making goes down the toilet.
In my experience, just as HR departments that are single-handedly responsible for hiring the most incompetent and hopeless employees, purchasing agents are single-handedly responsible for engaging some of the most incompetent external IT service providers.
You see, procurement folks are obsessed to treat external IT folks as replaceable vendors, as opposed to respectable authorities. They don't run peer-level relationships.
But great IT companies work only on a peer-level basis, not as vendors.
Unlike real buyers who are real decision-makers with real business issues in search of real solutions as worthwhile investments, purchasing departments are scanning the horizon with superficially exciting RFPs in search of some poor bastards who are willing to move heaven and earth to make this company more profitable for some chickenfeed in return.
So, what is the result?
Well, the best of the best don't even bother to respond to RFPs. And many of the ones who do respond, burn their fingers and stop responding in the future.
And buyers burn their fingers by engaging IT companies from the bottom of the information technology scum barrel.
So, the first lesson is that focus on positioning and marketing your company and don't waste time and money on the RFP lunacy.
But what you need now is boardroom calibre proposals written in boardroom English.
I think the biggest problem is that they are written for the wrong purpose, by the wrong people, to the wrong people and from the wrong perspective.
Wrong purpose: If the initiative were important enough, the C-level executives would coordinate the search effort using not RFPs but their own contacts. There would be a "boardroom-level" involvement and commitment to find the right firm, not merely the lowest bidder.
By the wrong people: Proposals are usually written by technical people. And since most of them are not conversational in boardroom English, they usually revert to geek English and write about bits, bytes, Gigahertz, LAN, WAN and other mythical things.
The problem is that buyers are looking for business solutions to business problems NOT technical solutions to technical problems. So, there is an instant misunderstanding and a high chance of losing the game.
To the wrong people: Competitive bids are evaluated by bureaucrats not businesspeople. Some of these bureaucrats may have MBAs or other impressive-looking business credentials, but most of them have never run businesses.
They are business administrators not practitioners. So, how can they evaluate business propositions? They can't. They get bogged down on features and on your people's resumes.
Wrong perspective: RFPs are too tactical with no regard for overall organisational strategy. Traditional RFP-driven proposals are activity-based not achievement-based.
Using sniper's language, RFPs give you minute details about every little action step you must perform to load the rifle, to aim the rifle and to shoot the rifle, but miserably fail to specify the target. You just keep shooting but never know what you hit.
One of the reasons for this shortcoming is that the folks at purchasing and procurement are not involved in their companies' strategies, have no idea in what direction the company is heading and where. In most companies, these "boardroom" topics hardly ever trickle down to the lower levels of management, like purchasing.
Yes, RFPs seem to be tempting and may even look exciting on the surface, but dig a bit deeper, and see their real natures. You also discover the leaks where your company starts bleeding money as soon as you engage in the RFP process.
And sadly, as a result of this RFP nonsense and miscommunication, according to a study by McKinsey & Co., is...
75% of solutions don't return a profit to sellers.
50% of solutions don't deliver the expected value to clients.
So, IT folks can brag about their credentials and methodologies, but even when they get hired, the impact of their work is pretty dismal.
Proposals are not enough. We have to re-think the whole proposal process from the very first contact to the signed agreement and even beyond. And we have three stages here...
But let's start with...
So, just keep these pitfalls in mind, avoid the RFP landmines and you can drastically improve your proposal acceptance rate.
And of course, if you need some help, then feel free to drop me a line, and we'll see what we can come up together.
For a web design firm, I helped to re-word a design proposal. The firm was bidding on a web design project and was about to hand in a proposal for $7,800. The proposal was focusing on efforts the firm would exert to do the work and methodologies the firm would use. After re-wording the proposal and making it more client-focused, emphasising value to the client, the proposal was accepted at $23,800, a 205% improvement over the original proposal.