The Problem With Requirements Driven Tech Buying

Done right, there probably is nothing wrong with a purchased based off of an RFP. But done right is the key word. My confidence in the ability of most organizations to create great RFPs is not very high at the moment. And, it's not necessarily the fault of the organization.

Here's the issue. The RFP approach was in its heyday in a time when change was slower, IT was in control, and tech had much more limited use cases. When an organization is very confident that they know what they want to achieve AND the way they want to achieve it AND what capabilities they need to get it done, then the traditional RFP will probably work--particularly for traditional use cases.

But that world no longer makes up the majority of tech buying decisions; nor the majority of organizations.

Today, we see organizations and organizational leaders lacking confidence in their technical chops. They struggle with internal alignment (something a good RFP can help with, to be fair) and are often unclear about the goals they have for technology purchases. Whether they are spending money to preserve budget or update some long in the tooth technologies or even trying new things, the willingness and ability to get specific about desired outcomes is often lacking. And, in that world, an RFP is a whole lot of effort for a decision that will likely have regret.

Side Note: The other issue with RFPs that focus on functionality is that most respondents will claim "we can do that." The RFP responses actually don't help you evaluate and rate. On a realted note, MQ responses have some relationship to this RFP phenomenen. I once worked for a company where I was told I had to answer "yes" to every single item in an MQ submission, whether we truly could do it or not (the theory was anything was possible with some coding). Makes MQ work harder for the analysts that work on it.

Then we have new scenarios. Imagine if you are looking for some technology to enhance your existing products and services. Or creating new ones. The focus is external vs. internal. Here the best situation starts with a desired outcome or goal. And you shouldn't be looking to have a somewhat hands-off managed RFP process--you should be looking for a partner. Someone who will help you plan the product; prioritize features; build the ecosystem; and support the sales effort. This is a world where tight collaboration is critical and the capabilities are often evolving. If this is a new area for you, you are often looking for someone who knows what you need better than you do--or at least can add some added perspective and insight to refine your strategy.

For this, and frankly other decisions that are based on desired outcomes, a different path is needed. I'd love to see us move to a world where the request starts with desired outcomes. Then you invite potential partners (or vendors--but it really is a partnership) to share how they would help you achieve those outcomes. You could take it further by highlighting a number of common value scenarios and explore how those would be accomplished. Go even further by asking respondents to suggest other scenarios. This is along the lines of what we call generative relationships.

This approach starts with the end in mind and has a much greater orientation to how and why vs. a foundation built on what. (In some ways, I think our adherence to "what" oriented RFPs is why so many enterprise applications suffer from the same user experience issues we've all complained about for years. Yes, they can be used to accomplish a task. But that process does not spend nearly enough time understanding how. It perpetuates "safe decisions" that don't move the needle on value.)

It's really time to stop applying "best practices" that were really only average and really designed for a different context from what we are doing today.

This will require work on both sides. For several years in our buying studies, we've explored whether buyers approach decisions differently when the use case is primarily internal vs external (such as digital products and services). We've yet to see substantial differences. That could be part of the recent wave of digital distain. But it doesn't have to be that way.

For the buyers out there, shift to a outcome/goal foundation and work backwards to value scenarios (aka use cases) and requirements.

Vendors, guide your customers toward a better process, particularly for new use cases. If a potential customer starts pushing you toward an out-of-date RFP orientation when a real partnership is needed, consider pushing back. Suggest a new approach that is driven in shared goals and building a real partnership to win in the market. If they refuse, it may be better to just walk away. Even if you win the business, it probably isn't going to be the success you or your customer want.

The path to more success, more confidence, and less regret is collaborative vs. confrontational relationships. Rethinking RFPs is key part of this new path.

The articles in this newsletter do not follow Gartner's standard editorial review. All comments or opinions expressed here are mine and do not represent the views of Gartner, Inc. or its management.