A sizeable percentage of public sector agencies procure technology solutions through a competitive RFP process. In our teams’ experience, we have seen thousands of RFPs, observed many consistent patterns, and have reached the conclusion that the traditional RFP process doesn’t serve the government well.
In this post, we’ll unpack the current RFP process, explore why it falls short, and discuss the 5 ways government organizations should evolve their procurement approach to successfully acquire cloud technology.
RFPs: How technology procurement works today
Competitive RFPs are often evaluated on a number of criteria, where points are awarded for each criterion and then a calculation is done using those points to either 1) select a vendor of choice or 2) “down-select” a subset of responding vendors for further evaluation.
The criteria commonly used today, listed in order of how points are awarded (where most points are at the top), are:
- Ability to Meet Functional/Technical Requirements
- Project Approach and Understanding
- Experience
- Cost
- Corporate Background
Our observation is that this process and approach hasn’t fully changed to reflect the shift from on-premise to cloud technology.
Why have RFPs not evolved?
There are several reasons why the approach to procuring technology is slow to change, including:
- Because that’s the way an organization has always done it: It’s not uncommon for a procurement cycle to take months or even years to complete, from the initial internal request for funding to when the implementation project starts. By re-using the same process that worked to procure related goods and services, an organization can save time. That’s helpful in today’s budgetary, political and operational pressures.
- Because that’s the way others do it: Similarly, leveraging the RFP that a peer organization has used to procure technology is another way to save time in a lengthy process. However, this introduces a new challenge. Agencies need to avoid borrowing from an RFP that is outdated, but if they use an RFP that’s too new, they introduce the risk that they are using an RFP where the procuring organization hasn’t started using the software and post go-live experience with their vendor.
- Because that’s what third-party advisors recommend: When agencies need help to manage the procurement of a critical technology, there are private companies that partner with them through the development and evaluation of their RFP process. Those companies are incented to have a “wash, rinse, repeat” approach to the work they do – reusing past frameworks and scoring models – because it reduces their cost and allows them to scale their business to more customers.
Why should the RFP process evolve?
Technology is evolving and innovating faster than ever before. Cloud technology vendors are selling products and services that are evolving faster than ever before. Meanwhile, choosing the right solution is crucial because implementation is a significant investment and, once live, most organizations run the software for at least ten years – often much longer.
Because of that, good technology vendors measure their relationship with customers in terms of decades, not years. With that in mind, public sector organizations need to shift the emphasis of evaluation from product features and functions towards assessing the fit of a long-term partnership with a vendor.
How can organizations evolve?
To take this more balanced, strategic approach, here are 5 new criteria public sector organizations should put greater emphasis on when evaluating vendors:
- Look beyond today’s requirements – The current process of scoring requirements only assesses what solutions can do today, and that typically results in little differentiation between solutions. Organizations should put more focus on the future of each solution (vision, roadmap), what role customers have in shaping that future (key requirements, design approaches), and how the future is delivered (releases).
- Assess the corporate stability of respondents – In an industry that has been consistently disrupted by mergers, acquisitions, and investment from venture capital, it’s important to quantify the risk that disruption poses and how exposed an organization is when a given vendor is selected.
- Get to know the implementation team – You’ll meet the sales team, and you’ll meet the folks demoing the software to you, but rarely meet the implementation team. Organizations should absolutely ask to meet the implementation team they’ll be spending months working alongside.
- Also meet the support resources – If an organization is going to take the time to evaluate the skills and experience of the implementation team, it seems reasonable to do the same for the support team they’ll be working with for many years. This is particularly important if the vendor relies on a third party for parts of their proposed solution, such as cloud hosting.
- Ask vendors to substantiate their policies – If an organization is going to ask vendors what their SLA is (most will tell you 99.9%), go the extra step and ask them to share their product’s uptime for the past 12-24 months. Also, ask about how and when they product updates as suggested above, and ask what their track record is for delivering those updates (are they on time, do features get delayed, etc.).
Technology rapidly is changing, and in turn, the RFP process needs to adapt to those changes. As organizations look towards changing their technology, they should assess their evaluation process to ensure that they are selecting the best solution fit and vendor fit. Investing in the right cloud technology is important but investing in the right vendor is critical to ensure the longevity and success of an investment.
Learn More
Modern cloud technology solutions can help public-sector organizations overcome many of the challenges they face. By migrating to the cloud with Oracle Permitting and Licensing, organizations can embrace innovation and push the limits of what their employees and constituents have come to expect from their government. Oracle is excited to be able to partner with government organizations on their journey to the cloud, and you can discover more about Oracle’s Permitting and Licensing solution here.