Technology

Why retailers should rethink the RFP process

BTM Global CEO Tom Schoen explains that it may be time for retailers to revamp and rethink the RFP process, especially as many are embracing and deploying emerging technologies during the ongoing COVID-19 pandemic.

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December 18, 2020 by Tom Schoen — President, BTM Global

As we all continue adapting in the midst of the COVID-19 pandemic, we can use this time to take advantage of new opportunities. The most strategic retailers are focusing on changes such as technology upgrades or improved e-commerce offerings that put them in a stronger position to weather tough times and serve loyal customers.

If you are considering a technology implementation or upgrade project, selecting the best system integrator or implementation partner is one of the most important decisions you'll make.

However, the RFP process for choosing a partner has lagged considerably. For the most part, the retail industry's RFP process hasn't evolved with the times. As a result, companies risk not finding the best partner for their project.

Based on my decades of experience, the following are a few things I encourage retailers to rethink if they want to objectively find the best partner for a technology project.

Manage the RFP process yourself

It's not uncommon to hire an outside consultant to manage the RFP process. In fact, it seems like an efficient way to outsource the work to someone who's done it before.

The problem is that most consultancies have special relationships with certain implementation partners, and those relationships can influence who responds to the RFP. This usually isn't a deliberate decision on the consultant's part; it's just a simple fact that they have closer relationships with some companies more than others and will think of them first when searching for respondents. But as the retailer/client, you want the best options to choose from - not just those who know the RFP consultant.

To get a more objective suite of candidates, manage the RFP process with an internal team. Talk with your technology vendor so you have a good understanding of the project scope, put together your list of requirements, and start the search for the right fit. Ask your vendor for referrals, or contact other companies that have implemented the same solution and ask about their partners. If you decide to work with a consultant on the RFP process anyway, make sure to provide governance of the process, ask questions about their process, and understand why certain partners were chosen to respond.

Separate the product search from the partner search

This recommendation might be a bit controversial, but I believe a retailer will find the best implementation partner for their needs if they separate the partner search from the technology search. In other words, choose your partner yourself rather than only relying on the tech vendor to select one for you. Only you can decide whose skillset and culture are the best fit for your team.

Even if the tech vendor suggests an implementation partner for your project, consider going through a vetting process anyway. If you are owned by a venture capital firm that relies on the same set of implementation partners, also go through a vetting process with other choices if you can. This process would include meeting with potential partners, getting a good understanding of their team's background and retail experience, and, if possible, visiting the partner's offices to assess their leadership and culture. Learn about the company's ownership structure and how it's run, and how much "skin in the game" they have in the success of your project. In other words, is your work significant to them or will you feel like a cog in the wheel?

Please, please stop sharing RFP answers

For most RFPs, it's common practice to share respondents' answers with all other RFP respondents. I'm not sure why this is considered a best practice; it shouldn't be and here's why: A potential implementation partner should freely ask detailed questions to help formulate the best approach to the client project. When those detailed questions are shared with competitors, it alerts the competitors to the respondent's thinking or intention. Therefore, it's a complete disincentive for a partner to ask very specific questions because they are worried that the competition will figure out their approach and use it. The result is that the responding partner ends up making assumptions about a project rather than risk exposing their approach to a competitor.

On the other hand, if the questions are not shared with everyone (ideally, a NDA is in place before the respondents get the RFP), the responding partners can request more details in order to put together a more specific proposal without the fear of giving something away. This is also extremely beneficial for the retailer, because they can more easily determine which respondents really knows their stuff.

Go beyond the partner's references

Very few companies evaluate the services that an implementation partner says they offer. Some partners have a lot of contractors that can do many different tasks, while others bring in partners to fill in the gaps. Regardless of their size and approach, ask your potential implementation partner how long they've offered their services.

In addition, do your homework when it comes to references. Don't only use the references that the implementation partner gives you: those are always going to be stellar referrals! Instead, ask your peers if they have worked with the partner or ask your technology vendor for a list of clients that have worked with the company. Then, contact those clients. Here at BTM, we had a prospective client do just that: They called our past clients and we didn't even know they were considering us for a project! But this sort of detective work reveals an unvarnished look at what the potential partner does well and where it falls short.

Rethink the RFP process

Many areas of our lives and industry look different right now, and it's time to rethink business as usual. When searching for an implementation partner, it's in your best interest to review your assumptions about the RFP process. Create a process that can better reveal the strengths and weaknesses of your potential partner, and better set up your retail technology project for success.

Tom Schoen is CEO of BTM Global.

Technology