RFPResponses:OutsourceorInhouse?

NeoConWhitepaper,June14,2011 EvanL.Morris,GreenwoodVillage,CO 3033453355 EvanLMorris@comcast.net Asignificantsegmentofyourmarketpotentialhasalwaysbeenopportunitiesthat culminatethroughtheRFPprocess.Thissegmenthasbeengrowingoverrecentyears andwillcontinueintothefuture.RFPscanrepresentlargedollaramountscoupledwith potentiallylowmargins.Thereisalsoahighlycompetitiveenvironmentassociatedwith RFPsandthechancesofwinningcanseemremote.But,ifyoudontparticipateinthis arena,youaremissingopportunitiesthatcouldpropelyourbusinesstothenextlevel. RFPsarelaborintensiveandtheycarrytheimageofhighrisk,lowreward.Assuming youagreetoparticipateinthissegment,shouldyoupreparetheresponsesinhouseor outsourcetoaspecializedservice?WhatIwillsubmitinthefollowingpagesarethe rulesofengagementanddescribetheenvironmentthiswillthenenableyouto evaluatewhetheryouwanttocommittopreparingRFPsubmissionsinsideor subscribingtooutsideexpertise. Effortv.rewardvarieswithdifferentsegmentsofyourbusiness.Transactionalfurniture salesrequirelittleeffortasyoufulfillordersfromyourwarehouseorthrougha wholesaler,margindollarsflowfreelyastheseopportunitiespassthroughthebusiness. Contractfurnitureprojectsrequiresubstantiallymoreeffortfromthedealershipand margindollarstendtobemuchlowerthantransactionalsales.Bidbusinessrequiresa tremendousamountofeffortfrommanysourcesinternallyandexternallytovirtually writeabooksimplytofindoutifthedealershipwillbeinvitedtogotothenextstep. TheRFPthatyouareinvitedtorespondtoisoftenwrittenbyverysavvypeoplewho understandeconomicsandthecompetitivenatureoftheindustry.Thisastutenesscan leavelittlemarginopportunityontheproductsideofthejob. So,whybotherrespondingtotheselaborintensive,lowrewardopportunities?You shouldrespondforacoupleofreasons.First,ifyouwin,therearenetpositivemargin dollarstobegainedfromtheprojectitispositiveforthebusiness.Second,your independentlyowneddealershipdoesnotliveinavacuumanditisnotastandalone entity.Youhaveaveryimportantpartnershipwithyourmajormanufacturer. Manufacturersneedorders,largeorders,tokeeptheirfactoriesrunningandlaborforce engaged.Lowermargin,largeprojectRFPsbringalotofvaluetothemanufacturing environment,theyneedthevolume.Whenyoufindyourselfrespondingtoalarge, complexRFPmakesureyoubringyourmanufacturerintohelpwiththepreparationof theresponse.Theyhaveasmuchtogainifnotmorethanyoudobybeatingthe competition.

Theeffortthatyouputforthfrominternalresourcescanbesignificant,painful, seeminglyinefficientandstressfulfortheentirecompany.Shouldyouletothersdothe heavyliftingorshouldyoudotheworkinternally?Letsfirstlookatthemechanicsof RFPresponsepreparation,therequirementstomaximizeapossiblewinandthen addresstheissueofinternaloroutsource. RequirementsforRFPresponsesuccess:

Companyattributes: Musthaveawelldefinedandcrispbrand Afocusedbusinessstrategy:OE,CI,I Bewillingtodefendyourstrategy(itsnotallaboutprice) Possessthedisciplinetostandbyyourcorevalues Beprofitableenoughsothatyouarenotpanickingintheresponse

Resources&skillsrequired: MakesureyouunderstandtheRFP Assemble/coordinatearesourceteam Onepersonmustown(centralizedcoordination)theresponseprocess Neverpassupanopportunitytoaskquestionsoftheclient DontsitontheRFP,starttheresponseimmediatelyuponreceipt Researchpriorresponses,lookforthoughtstarters,materialthatyoucanuse withsomealterations RespondwithDETAILEDwellwritten,compellinganswers Gethelp&expertisefromyourcommercialpartners:designfirms, manufacturers,architects,commercialrealestateresources Musthaveexcellentcommandofthelanguage: Writewith1voice Perfectgrammar Outstandingcreativewritingskills Tellacompellingstory Bestinclasseditingskills Knowyourindustry: Presentasifyouaretheforemostexpertinyourindustry Knowyourclientsbusiness: Doresearch Usetheirwords

Evan L. Morris, Industry Consultant, Dealer Shared Services, RFP Specialists, 303 345 3355

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Getintotheirskin,livetheirworld Presentwithconfidence Musthavearesourcelibrary Cantaffordtostartfromscratcheverytime OnlyONEowner/custodianofthelibrary(doesnthavetobetheone whoownstheRFPresponse) Operateasifareallibrary Continualupdating,keeprefreshed/current Proofread,proofreadyourwork&notbythesamesetofeyes: Compellingstory? Empathycustomer Empathycompetitor Last:grammar,language Goodbalanceofgraphics Dontoverdoit;but, Stimulatethevisualsenses Usewhitespace,anicebusinessfont,pleasantletting,kerning& characterspacing Makeiteasytoread,enableaneasyflow AnRFPresponseisalsoamarketing/advertisingpiecepromoteyour company,takeadvantageoftheopportunity Presentinternally,haveyourteamcritique Writeapowerfulexecutivesummary/coverletter The1or2mostimportantpoints Begintobridgedeficiencies,closegaps If3 partySMEsareintheequation,speaktothem,intheirvernacular Understandthelayoftheland(thinkBlueSheet) Spendalotofmoneytopreparethephysicalandelectronicmaterials Neverspiralbindtheresponse,always3ring Presentusingstateoftheartmediae.g.iPad UnderstandthetollroadmentalityoftheRFPworld Ifyoureprofitableandrunningatnearcapacitywhatsthemotivationtorespondto anRFP? Beselective Rainydaystrategy
rd

Evan L. Morris, Industry Consultant, Dealer Shared Services, RFP Specialists, 303 345 3355

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ClientsfutureopportunitiesmaynotgotoRFP Regardlessofprofitability,ifyouhaveexcesscapacity AbsolutelypursueRFPopportunities,youmaybeselective Representativequestions: Willyouofferdesignandspaceplanningatnoadditionalcost? Doesyourcompanyprovideareverselogisticssystemtoreturnandrecycleused product?Ifso,pleasedescribe. Willyouprovidewarehousingatnocostshouldaprojectbedelayedor cancelled? Canyouprovideanassessmentofyourcarbonfootprint? Hasyourcompanybeennamedasadefendantinalawsuitalleginginfringement ormisappropriationofathirdpartysintellectualproperty? Whatareyourenvironmentalvaluesandcommitments?Howaretheystated, measured,andenforced?Pleaseprovideacopyofyourmostcurrentrecords supportingyouranswer. Howdoyoumeasurecustomersatisfactionforyourproductsandservices? Pleasedescribeanyinnovativediagnostictoolsandbestpracticesyourcompany hasdevelopedthatwouldaidinprocessimprovementsandcostreduction. ThetwistedworldofRFPsWhatothersegmentofyourbusinesswouldpresenta scenariolikethis? RFPisreleased. Youand8ofyourclosestcompetitorsdecidetorespondforaverylarge opportunity. Youinvesthundredsofhoursandtakekeytalentoffthestreetforatotalof2 weekstopreparetheresponse. Youprevailanddiscoveryouare1of2finalists. ThenextstepistosufferthroughareverseauctionhostedontheWebandyou emergethewinner. Thecustomerthencomestoyouandasksgivemeyourbestandabsolutefinal. Aftersurvivingtheseobstacles,a3rdpartyconsultantasks:Whatadditional incentiveswouldyourcompanyofferinexchangefora2yearcontract?(i.e. volumerebate,signingbonus,etc.)or, Whatelseshouldwehaveaskedforthatwehaventdoneso?

Evan L. Morris, Industry Consultant, Dealer Shared Services, RFP Specialists, 303 345 3355

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Winratev.whentostop. WhatsyourRFPwinrate? Proposedproduct#1,#2or#3intheindustry? Whatif#5or#6?Waystomitigate. Neverstop,butweighC.v.B. Butontheotherhand,youcantkeepchasingghosts. Outsource?Retaininhouse?Suggestedguidance(large,complexRFPs):

2/year 1everyquarter(4/year) 1every2months(6/year) 1everymonth Morethan12/year OUTSOURCE OUTSOURCE OUTSOURCE OUTSOURCE,CONSIDERINHOUSE BRINGITALLINHOUSE

RFPresponsesdeserveCAREFULanalysisandconsideration. Onlyplaytowin. Nevermakeahalfcommittedattempttorespondalwaysgiveityourbest effort. Winyourfairshare,makefewmistakesfulfillingtheopportunity(margin preservation),andaddanicelayerofbusinesstoyourrevenuestreamthatyou mightnototherwisehaveharvested. Learntolovewhatyouhate:theRFPresponseprocess. Goodluck&happyselling!

Evan L. Morris, Industry Consultant, Dealer Shared Services, RFP Specialists, 303 345 3355

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