Since the beginning of modern business operations the Request for Proposals was king. As one of the only ways of reaching new vendors and partners, corporations relied on this traditional tried-and-true method as an industry necessity. Today, 95% of companies still use RFPs, but it seems more out of a lack of other and more reliable options.
According to a LexisNexis survey of professionals, 15% say their firms respond to over 21 RFPs per month. In a year this adds up to at least 252 RFPs total. Accounting for extra work, time lost, and money wasted, just one RFP demands dozens of hours of attention and weeks of follow up. The average business’s RFP workload looks like 10-20 projects a year and the cost of RFP participation per year before wins can reach up to $100,000. What’s more, project management professionals who focus on IT say that among their strategic initiatives 42% failed to recoup its budget and only 60% actually met the project goals. Any way you spin it, RFPs just don’t cut it anymore.
The solution lies in eliminating the need for RFPs all together. Partnering with one vendor, rather than shopping around for the best (read: cheapest) price can compound into greater levels of success and advancement. Partnering with one vendor alone makes the RFP obsolete by encouraging candid communication, building relationships, spreading risk among two invested parties, and of course speeding up the process.
Smart business leaders know that their need for fast and reliable solutions aren’t going to be met with using RFPs. Proof of Value, or PoV, ensures the best value projects are done for the right price. The goals of PoV revolve around setting up projects for success before they even leave the gate, upping the chances for successful outcomes.
Minimum viable product (MVP) is the first iteration of results that delivers the basic project needs, essentially ensuring that businesses understand exactly what they are looking for, instead of waiting for the vendor to tell them what they actually want. Based on information measurement theory, this process considers predictability of success and errors using the information that’s available, while also giving vendors a real chance to showcase their skills.
Still relying on RFPs to reach new vendors? Maybe it’s time for an upgrade. This infographic below details new options for finding vendors and partners, why RFPs aren’t suited for modern business environments, and how you can make the switch for more streamlined solutions for your business.