Negotiation – The Heart of the RFP Process
“You have three minutes or the meeting is over”
“You have three minutes to deliver on our spec. or I will stop you and our meeting is over.” I actually said this to a vendor, stopped them three minutes later, and ushered them out of our Fortune 500 offices shortly after that.
Vendor Yo-Yo
To give you some perspective (so you don’t think I’m a total tyrant); it was the third time we had offered to have the vendor discuss their offerings with us, once on a conference call and two times in person. After the second time, I counseled the vendor on where they needed improvement, where they needed to deliver, and told them they only had one last shot. Not even the VP of Sales (a real class act and nice guy) flying into meet with us in person and over lunch could salvage the vendor from being passed over.
Vendors – Many are called…few deliver
Although the SOW (statement of work) is important, the KPI’s (key performance indicators) are essential, the SLA (service level agreement) is paramount, and having the appropriate people from specific areas of your company (IT, business, systems etc…) involved in entire process; the most important element and the one fraught with the potential to deliver the most disastrous outcome is during the client-vendor meetings and negotiation process. By this point in time you have narrowed your field of suppliers to three or possibly five and everyone is set to be done with the process and move on to contact signing.
Overwhelmed with it all
The entire process to this point has encompassed close to six months and the members of your core team are now a bit worried to be spending another 2+hours in a conference room over the next few weeks. The collaborative software and PM (project manager) may be a great help, but the volume of data, email, and various quick meetings in the hall or over lunch are now pushing everyone toward completion. This comes at the time most critical to negotiate and assess.
When to call in expert assistance
Having a fresh pair of eyes, someone who is not an insider or burdened with various other projects and deliverables is what is needed at this juncture. This is to say nothing of the voice of impartiality and deep experience with various vendors and engagements can bring to the table.
Negotiation
Negotiating involves the ability to get to the KPI’s and have them demonstrated, an SLA that is iron-clad and one your legal team can finally sign off on. The ranking and matrix used to score is used continually during the negotiation process. Price, which can involve bundled services, additional costs, support and customer service considerations, upgrades, and hourly fees is paramount and a visionary mindset that can anticipate needs in the future is prudent.
Where are they now?
Lest we forget that in the ever-changing and shifting waters of employment and corporate restructuring; documentation of the negotiating process with all the pitfalls and prime considerations is primary. This will leave an audit trail for the next group, who will most certainly be involved when an RFP is requested again.
