Switching IT suppliers - the RFI process
So you are ready to consider changing suppliers or you might be coming to the end of your current agreement and want to see how your incumbent compares to others in the market? This is where the RFI (Request For Information) and RFQ (Request For Quotation) process helps you out.
The basic principle of the process is as follows:
Step 1) Document the service you want (the RFI)
Step 2) Sent the request out to a number of suppliers (including your incumbent)
Step 3) Short list the responses to eliminate the weakest
Step 4) Send out a second phase (the RFQ), requesting more information and giving the short listed suppliers the opportunity to demonstrate any additional value
Step 5) Select your preferred supplier and complete final negotiations
So what do each of these stages entail? Well to give you a bit of a taster, here are the basics.
Step 1 - Document the service you want (RFI). This is probably the most important phase of the process as it gives you the control to clearly define what you are after. Remember, suppliers will ask questions during the process but they will be along the context of the information of your RFI. Be clear about any expectations, assumptions and what is in or out of scope because if the project goes haywire during the implementation phase and the supplier turns around and says "you mean you wanted 5 years of support costs in the tender? We've only quoted for the first year free so you will need to cough up another £10,000 please, your RFI document will be the first place you will turn to for clarification. Once you have finished your document, version control it and save it in Pdf format. Issue the Pdf to your suppliers, not the editable document.
Step 2) Sent the request out to a number of suppliers (including your incumbent). Dependent on the size of the project / service / budget, you may want to consider up to 5 suppliers. Remember, at this stage you have done your hard work in writing the RFI so all of the effort is on the suppliers. As a minimum you should consider 3 suppliers (2 plus your incumbent)
Step 3) Short list the responses to eliminate the weakest. This step is your opportunity to reduce the list of potential suppliers down to a smaller manageable group. Their is no right or wrong approach and some companies use price as their basis, whilst others utilise complex scoring mechanisms. You do not have to carry your incumbent through at this stage, although some companies do operate a policy of giving the incumbent a direct place in the final selection. Whatever your approach, you must be happy with your final selection, as one of these has the potential to be your final supplier!
Step 4) Send out a second phase; the RFQ, requesting more information and giving the short listed suppliers the opportunity to demonstrate any additional value. OK, this sounds like repetition doesn't it? But you are now down to the suppliers you are really serious about and they want your business (money!) so now is the chance for you to be the customer and start to drive your bargain. Look for opportunities for them to add value to your project or business. A common approach is to ask "what else? if you had a clean sheet of paper on this project and knowing your product / service portfolio, what would you add in?". Remember you are trying to get the suppliers to introduce extras with little or no extra cost.
Step 5) Select your preferred supplier and complete final negotiations. Once the second phase of the process has been returned, its time to chose your "preferred" supplier. Remember, at this stage you are only giving an indication of intent not entering into the contract. Let the unsuccessful suppliers know that "subject to contract" you have chosen a supplier and that they have been unsuccessful. Most suppliers appreciate honest feedback to allow them to improve on future bids. Once this is done, you can commence the final negotiations with your chosen supplier.
If you would like an example copy of an RFI to review, or would like assistance in writing yours, please contact us.
