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3 Reasons the RFP Process is a Waste of Time

Today’s HR Technology (And many, many other industries) world looks completely different than it did even a few short years ago.  The rapid advancement of technology and innovation has created solutions to business problems and objectives that didn’t even exist five years ago.    Unlike in years past with legacy or systems built on older technology, today’s solutions are nimble, flexible and responsive to business needs.  In the new market of HR Technology,  I’ve seen vendors respond to a technical/product needs in a few days – something not even technically possible for old style technology.

Yet, when trying to replace our current solutions or solve process issues, we still want to revert back to an evaluation process that was developed when what was available was very limited and it was pretty cut and dry who could or couldn’t do something.   When the “features and benefits matrix” actually made a difference and user experience had little involvement in decision making.

After years of working with both vendors and corporate clients, its no secret that I am not a fan of the RFP process – especially for small to midmarket and small enterprise (under 15,000 employees) and here are my top three reasons why:
  1. Everyone Does the Same Thing (At least on paper).  Send out RFP’s and suddenly people get really creative at what ad-hoc reporting means or advanced search capabilities or social integration.   If you really twist your mind and jump through hoops could you “technically” do it?  Sure.  Sometimes, I guess.  Although, there has been more than once where I’m embarrassed for a vendor when they actually show their “version” of the RFP requirement.  It doesn’t matter IF they can do it, it matters HOW they do it.
  2. Vendors Don’t Like Them.   RFP’s are risky – they take up A LOT of time, go out to A LOT of vendors, typically are so generic that there is no way to really differentiate and often provide limited information about the company to really provide you with the solution that actually makes sense for your organization.  So instead, they just choose not to respond – Especially from small to mid-market companies.  On a corporate side, you assume they didn’t respond because they couldn’t meet the needs of the RFP.  On the vendor side, they assume they just saved time working with the clients that appreciate a consultative approach.
  3. Buyers aren’t Experts.   When a corporate procurement team or hr department pulls a sample RFP off a website they are often creating requirements around what DID exist (often years ago), not what DOES exist in today’s market.  It sounds silly, but its true.  If you have a list of everything you want and only make decisions based on that – you may miss what you actually NEED for your business process purely because you didn’t even know it existed.   Its not the buyers fault, they have real jobs to do other than looking at software all day.

      Ask anyone that has/is an analyst and you will know that its almost impossible to keep up with it even if you only specialize in a subsegment of HR (Like ERP, HRIS, Performance, Recruiting, etc).

So what should you do?  Research companies that are out there.  Don’t just look at the companies that are making the most marketing noise – just because they have the most money, doesn’t mean its the best product for you.  Get referrals and feedback from colleagues, the internet and industry experts. Attend an event like HR Technology Conference or HR Tech Europe depending on where you live and walk the expo floor, have conversations with people who are passionate about this.  Hire someone who gets that the RFP isn’t always the right way and has relationships and knows the market and can make suggestions.   Then call and have conversations with 4-5 of the vendors you identify.  If they seem to just be focused on the sale, move on.  If they are trying to understand your needs and solve a problem, investigate further.

Are there instances where an RFP could be a good idea?  Sure.  Are they the norm?  Not anymore.

PS.  I have discounts available for both HR Technology events – Send me a message and I’ll give you the code for the best discount available.
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Sarah Brennan

Sarah Brennan is a recognized HCM industry analyst and advisor focused on improving the impact of technology on people, business and the future of work.  Sarah Brennan has been named a top global influencer in HR Technology by more than 50 publications and shared her insights at speaking engagements around the world. As Chief Advisor at Accelir, she partners with HR Technology vendors and investors as an advisor, interim CxO role and on engagements focused on growth strategies, product roadmap & market education/evangelism. She also works with corporate teams enhancing talent strategies.

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11 Comments

  1. Mark Stelzner July 26, 2012

    It won’t come as a surprise that I largely disagree with you on this one Sarah. Can RFPs be a complete and utter waste of everyone’s time (HR service provider and buyer alike)? If they’re doing what you described above, absolutely.

    Today’s corporate, regulatory and legislative environment still dictates that organizations follow a process that goes well beyond product/solution comparisons and includes compliance audits/controls, deep implementation expertise, strong integration and vendor sustainability (especially in our changing HR ecosystem). The RFP should not be treated as a check box where very little comparison is possible but instead should serve as a vehicle to mitigate risk, drive core comparisons and facilitate commerce. And with so many “experts” working all angles these days, it’s sometimes hard for buyers to know of they’re receiving truly unbiased advice and guidance. I’d love to see RFPs evolve but from where I sit, I don’t think they’re going anywhere anytime soon. Just my two cents.

    Reply
    1. Sarah White July 27, 2012

      Mark,

      I think you hit the point though with the comment “RFP should not be treated as a check box where very little comparison is possible but instead should serve as a vehicle to mitigate risk, drive core comparisons and facilitate commerce” – IF that is how I saw the majority of people using them, I wouldn’t have such an issue. And I would even argue that for enterprise level clients looking at enterprise wide solutions, they are still valuable.

      However, for a 20-50k/year annual spend, a company that is 10k ee’s or less or an organization who’s purchasing department pulls a sample RFP off the internet and/or puts EVERY. LAST. product requirement on there – its just not valuable – partially because they don’t get response from all the vendors.

      If an organization has an RFP in place it should be more focused on the integration and vendor sustainability, but even then I would argue it should be submitted after at least some initial contact with that vendor to ensure it is worth both the company and vendors time.

      Naomi Bloom is an advocate of doing the scenarios vs. rfp from a product focus and I fully support that. She reminded me of her post from 2009 on this same topic last night – http://infullbloom.us/?p=602

      And yes, there are some “experts” that make recommendations based on relationships vs. product fit – but so do the analysts, bloggers, consulting firms, etc. Unfortunately, for those of us that don’t do that – I don’t think that is going to change anytime soon.

      1. Mark Stelzner July 27, 2012

        All valid points Sarah, thanks!

  2. HR Jobs July 27, 2012

    Try to avoid the use of RFP process in business and small enterprises, because RFP process is a time consuming process and it results in failure.

    Reply
    1. Sarah White July 27, 2012

      I agree – the push to stop RFP in small to mid size business expands well beyond hr technology into advertising, web design, pr services, etc lately.

  3. Larry Cummings July 27, 2012

    Sarah you remembered a post from ’09! Okay I’m going to commit to memory your take away comment. And commit to making recommendations based on product fit over the vendors I represent. Which now require me to fire one of my vendors. As we learn to ask the right questions last one standing will become the right choice.

    Reply
    1. Sarah White July 28, 2012

      Product fit is so important is frequently overlooked when only looking at the hard factors. Its like picking a job or spouse with never actually getting to talk to someone to see what it would be like to be working/living with them beyond the basics on paper.

  4. Naomi Bloom July 28, 2012

    thanks for the reference to my blog post on this topic.

    A very important issue raised in this post and comments are the biases of the whole range of so-called experts, analysts, consultants, influencers etc. No one is without biases — no one — if they have any real knowledge of the competitive landscape, and no one is without potential conflicts of interest if they are involved enough with that competitive landscape in the course of their business. But biases are not always due to a conflict of interest. And where conflicts of interest can be reported factually, biases are much more subtle.

    For example, I have many vendor clients, and those relationships could be a source of conflicts of interest. That’s easily handled by simply so noting when a vendor client comes up in a blog post, in conversation with another vendor, in doing end-user advisory, etc. Just state the facts, and the listener/reader can reach their own conclusions about whether or not a conflict exists and to what extent it matters in a specific situation. Reading an analyst report, it would be very helpful if the covered vendors who are also major subscribers were so noted. Reading a blog post, it would be very helpful to know that that so-called influencer is in fact a paid shill for that vendor. Attending a sponsored Webinar, it would be great to know whether or not the vendor had “artistic” control of the content even when the speaker is a so-called influencer. I do my best to reveal all such relationships, e.g. of my panelists at HR Tech, all of them are well-known to me and valued colleagues, but only ADP, Workday and Ultimate have been recent clients whereas I haven’t done work for SAP, Oracle and Salesforce in many years (SAP and Oracle) or ever (Salesforce), but there are many among the so-called influencers who are not as meticulous on this point.

    But biases are much more difficult to address, and I have very strong biases, but they are front and center when you read the collected work (or at least a large portion of same) that’s not filtered by a given influencer. One of the reasons I so value the blogs of key influencers is because that’s where we hear what they really think. I’m clearly biased in the direction of great HRM enterprise software and much less so with great financial engineering via various types of roll-up/aggregator strategies. And my software biases go deep under the covers to where I believe the ghosts of future releases are enabled or constrained. Others focus heavily on the UX, on features and functions, on vendor congeniality, etc. — all important and all worthy of consideration.

    Happy Saturday morning. Naomi

    Reply
    1. Sarah White July 28, 2012

      Thanks Naomi –

      Like you, I consult both the vendor and user side as well as do webinars/presentations/etc and have followed your lead as well as others I respect to always be very transparent when someone is a client.

      And yes, while bias does exist everywhere with everyone, the reasons for some (money/client/referral relationships) is different than others (product knowledge/business practices/cultural understanding). I (like yourself) value my integrity more than money and happily sit on the side of bias based on product, corporate culture, performance vs money. And in the Talent Acquisition space – UX is KEY now – so I admittedly am heavily biased and spend a lot of time working with clients on UX because its what the clients are expecting, not hoping for now.

      Thanks for the comment & Happy Saturday Naomi.

  5. Jayson Saba July 30, 2012

    Good post Sarah. Great discussion from everyone.

    Naomi nailed it. We live in an industry devoid of unbiased ANYTHING. Everyone has an agenda. The good news, however, in our own way we all (most of us) want what’s best for the users and the industry.

    I personally think that the RFP process must evolve with the industry – otherwise it might be a waste of time. Without giving too much props for fellow dachshund owners (ehem), some entities are the only guide and grounding force for end-users/consumers in an industry where vendor messages have diluted – for example – what analytics really stands for, or what true SaaS really is, etc… A well devised RFP process can help a company get a fitting solution NOW without too vague of a vision for the future needs of the company. YES, we do need to go beyond feature/functionality and look at long term value, ease of adoption, sustainability of the delivery model, and existing processes. An age old question of whether (or how much) we should change internally versus whether (or how much) we should ask the provider to adapt (customize or configure) to fit our existing processes is a challenge to answer – without some third party (albeit somewhat biased) validation or insight.

    Disclaimer: I work for a Ceridian – an HCM technology/solutions provider.

    Reply
    1. Sarah White July 30, 2012

      Jayson – Thanks for the feedback! You are speaking my language – I am so frustrated by the number of vendors taking creative license for what something as basic as analytics or (in the ATS world) what defines “candidate search”.

      Disclaimer – I love vendor feedback on here. Even if it is not “official opinion”.

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