This post was authored by Andy Wilson, CEO of Logikcull. Andy can be reached at andy.wilson@logikcull.com.
"Please fill out this 20-page Word document so we can assess the viability and value of your product and/or services. You, and 14 other providers, have 45 days to comply. Thank you."
Sound familiar? That's typical RFP language. And if you've received an RFP, there's a good chance you've already lost it to the vendor that helped craft it (i.e. "Poison pill" questions that only the winner can answer).
Cloud services, thankfully, have rendered RFPs obsolete. I'll explain why later, but first, let's talk about what an RFP is, where it comes from, and when it actually makes sense to use one.
WHAT'S AN RFP?
RFP stands for "Request For Proposal." Another version, sometimes less detailed, is called an RFI ("Request For Information"). Businesses use RFPs to gather information about products and/or services so that they can:
- Easily compare them side by side (i.e. Apples to Apples).
- Assess the potential value of the solution or service.
WHERE DID RFPS COME FROM?
Before the Cloud, you were forced to purchase and install expensive, complex software via a sales person. This sales person had all the knowledge about the product. And it was her or his job to convince you to buy the software. The sales person would razzle and dazzle you with polished presentations and demos. You may even get a steak dinner or tickets to the ballgame. And if you were convinced, you'd buy the software. The license would be perpetual and typically last 3 to 5 years.
Fast-forward 6 months later when you've finally deployed the software. You find that the software didn't do what you thought it would do. You find more bugs than features. Your users aren't adopting it like you thought they would. The next version of the software, 4 months away from release, is supposed to address the bugs AND provide valuable new features, but you can't upgrade without risking the wrath of the users dependent on the software, whose work you will interrupt.
You're stuck. You've just spent hundreds of thousands, maybe millions, on shelfware (i.e. Put it on a shelf to rest in peace).
I bet you won't do that again, right? You need to prevent that kind of disaster from happening again or you risk getting fired.
Enter the RFP.
The RFP was designed to reduce risk. Risks like:
- Pricing risk. How do you know you're getting a competitive price? How do you know the price is aligned with the assumed value? Solution: ask for line item prices and how your pricing compares to the competition. Include ROI models.
- Service risk. How do you know if the support is any good? Are they around to help your users at all hours of the day? Solution: ask for bios in the RFP and spend time meeting people that will support your account.
- Value risk. How do you know the software will solve the problem? How do you know you'll save money or make money? Solution: ask for sample ROI models in the RFP. Lots of hypothetical charts.
- User risk. How will you know whether or not your users will adopt the product? How do you know if it will meet their demands? Solution: Ask for examples of happy users and how productive they have been on your software. Get testimonials. Coordinate customer reference calls.
- Shelfware risk. How do you know you're not buying vaporware or shelfware? How do you know the software will be successful? Solution: you really don't. All you have is hope.
Sounds pretty risky, I know. Thus, the RFP was born.
Need expensive software? Do an RFP.
Need to hire a vendor? Do an RFP.
WHY CLOUD MAKES RFPS OBSOLETE
The traditional software RFP is a direct response to risky software purchases gone bad. And it made perfect sense...until the Cloud showed up.
The Cloud has completely disrupted the legacy software RFP process. And this is a great thing for both the buyer and the seller.
Why is that? It's simple.
The risks of buying, installing, and deploying legacy software almost entirely go away with the Cloud. There's always risk with any purchase, but the legacy risks almost entirely vanish into the Cloud. Consider the following...
Knowledge risk:
With Cloud, you don't need to ask a sales rep what the software does and how it works. You read about it online. You watch videos. You read customer reviews. You learn. You are empowered and you may know more than the sales rep by the time you're ready to try or buy.
Deployment risk:
With Cloud, you don't need to see a presentation of how the software works. You try it yourself. Testing Cloud software is easy. Just login.
Term risk:
With Cloud, you don't need to commit to a multi-year contract out of the gate. You can typically buy month to month or just one year contracts. This keeps the seller honest and committed to your success.
User risk:
With Cloud, you don't need to guess what the user reaction will be. You simply invite in some users and get their direct opinion on the software. If it's not up to par, then maybe it's not a good solution for your users yet. Better to find that out in a few days versus a few months after purchase.
Equipment risk:
With Cloud, you don't need to buy servers, data-centers, redundant storage clusters, or additional software to run the software. There is no hardware required in the Cloud. You always get the latest equipment without needing to upgrade the equipment. And you get elastic computing and storage baked right in. This means you'll never need to worry about running out of storage or slow processing speeds. The Cloud has you covered.
Version risk:
With Cloud, you don't need to worry about versions or upgrade disruptions. Most legacy softwares are depreciating assets. The minute you buy them, the software has already lost its value. Cloud is different. Cloud is an appreciating asset. It's a living breathing thing that's constantly getting better the minute you buy it. If you upgraded your legacy software 2x in a year, then comparable Cloud products likely upgraded their service over 300x in the same year. But here's the kicker: the updates are done in real-time without the need to shut anything down. Wow.
Cloud is superior in a million different ways than legacy on-premise software. These are some of the many reasons businesses are going Cloud. Now, you may have an absolute requirement that the software be behind your firewall and on-premise. If that's the case, then by all means run an RFP and make absolutely sure you're buying the best possible solution for your problem today, and tomorrow.
If that's not the case, and a cloud solution is a viable one for you today (and tomorrow, don't forget about future needs), then here's a much less risky alternative:
Learn about it. (1-7 days)
Try it. (1-30 days)
Buy it or don't buy it. (0-1 days)
LTB is the new RFP for Cloud services.
In just a few days you could quickly verify whether or not a Cloud service will meet your needs. Compared to months, and maybe years, of RFP work, this is a no-brainer. Because the faster you can get value from the software, the better off your team will be.
So, the next time you're looking at running a software RFP, do some research and find out if there are comparable or superior Cloud services that you can LTB.
You'll save a ton of time. And you may just end up with a fantastic new product backed by amazing customer support.
Who wouldn't want that?
RIP RFP
BIG GLARING DISCLAIMER
I'm the CEO of a legaltech Cloud company. So naturally I'm biased. But here's the deal: because we Cloud companies offer flexibility in terms with no mandated long term contacts, free trials, and open access to the platform, that's great for you. If you don't like the service, we make it easy to switch. The burden is on us to provide an amazing product backed by world class service. Because with Cloud, it's also a lot easier to switch services than it was with on-premise software. The tables have turned. The Cloud is ushering in the golden age of the customer experience. Sign up.
