Let’s Do Video checks in with Video Advisors, a firm composed of high profile industry veterans who believe there are certain gaps in the existing consulting and user enablement market. One particular problem area they are looking to address is the way RFPs are currently utilized, which Mike Brandofino recently touched upon in a recent LDV article, Top 10 Mistakes Companies Make With RFPs.
We decided to go straight to the source to speak with Mike, and fellow industry vet Al Sutcavage, to discover more about Video Advisors in general and RFPs in particular.
Let’s Do Video: Thanks for joining me here today. Let me start by asking if you could share a quick overview of what Video Advisors is all about?
Al Sutcavage: Video Advisors is a vendor-supplier of gap-services that help companies complete their managed support of audio-video integration, video conferencing, and digital media solutions. We apply management experience in design-build-support of these technologies along with industry-expert resources in fulfillment of these services.
LDV: One of the areas you are focusing on is RFP management services. Why you think these services are needed? RFPs are pretty straightforward, right?
Mike Brandofino: Having been on both the vendor and customer side of a Request-for-Proposal, our experience taught us that all too often, the RFP process results in missed expectations, poor communications, and disappointing deployments.
Sometimes bid documents and the evaluation process are not explained adequately. They do not properly describe the business vision of a solution, use-case requirements, and separate any desirable, but maybe optional, features and capabilities.
Al S: Sadly, in many cases, major parts of the RFP are clearly cut-and-pasted from non-related projects or copied from the Internet. This can contribute to vendor confusion about the customer’s true needs and expectations, and in the end a less-than-desired implementation.
Yet from the vendor side we understand how challenging it must be for a customer to sort through the influx of industry jargon, product and services and then put in the time to adequately specify a design to meet their complete needs.
LDV: It appears there are two sides to this puzzle. The vendor side and the customer side. Can you break down what is involved from both perspectives?
Mike B: If you look at the financials behind preparing a formal vendor bid:
For the Vendor…
In most cases responding to a RFP requires a Senior Level Business Team, including Engineers, Business Management, Sales, and Marketing department support.
If the team spends a total of 80 man hours on each RFP at the opportunity cost of (let’s say) $100 per hour, and if the company chooses to respond to 75 bids per year, the vendor will adsorb approximately $375,000 in additional selling costs just in responding to the opportunities.
And with the Customer…
Larger companies might have a team of folks who are required to be involved in the creation of a formal vendor bid for technology. Then either a single leader or leadership team manages the RFP process and vendor selection process. When the bid is awarded, legal gets involved, potentially additional procurement, I.T. and facilities employees might get more involved.
It is quite a time consuming effort for the customers to manage any formal RFP process. So conservatively speaking if we assume an average-sized RFP, the team might spend 1,000 combined man-hours with an average cost in productivity of about $75 per hour. Just putting the RFP out and processing it might cost a company $75,000. And that cost does not discriminate between a small business and large Fortune 100 company.
So how disappointing it must be, after absorbing on these costs and putting in the hours, for both sides to miss on the original business and user application needs.
LDV: It appears that both sides are spending unreasonable amounts of time and money to get inadequate results. Why don’t we just ditch the process completely?
Al S: If you look at the underlying goal of RFP’s, they are clearly there to deliver a positive result. If done properly, they should enable the customer to clearly define their requirements and expectations of a solution. It should enable a vendor to provide thorough details about their solution, how it differentiates from the competition, and invites options and alternative solutions without prejudice. Ideally, it should help the customer qualify the best vendor partner and description of a solution that has the best chance of meeting or exceeding their expectations.
LDV: Let’s be real, at the end of the day, it’s all about budget, right? Don’t customers just skim most of an RFP and let pricing make the final decision?
Al S: Best pricing isn’t the same thing as lowest pricing. The best price is weighted against the qualification of the vendor and proposed solution to meet their application needs. Lowest pricing alone will often lead to tragically disappointing results, increased deployment time and ‘hidden costs’, and in some cases we’ve been called to come in after and clean up the messes.
It raises the question, “Why is there never enough time and money to do it right, but always enough to do it over?”
LDV: Ok, so we can’t decide on price alone. We something more comprehensive. What can we do to improve the RPF process?
Mike B: Our years of experience on both sides of the equation has exposed us to best practices, and perhaps more importantly – a managed process that can be applied whether it’s a small technology evaluation/vendor selection project or the largest most complicated multi-vendor/multi-national deployment RFP. The process is the same, the depth and breadth of the effort is up to the customer and how critical the solution is to their business.
Al S: We believe that this ‘managed process’ approach significantly improves the chances of a positive outcome for all involved, whether provided for the customer, or vendor side of the equation.
LDV: Ah ha, so you have created a methodology here. Obviously you can’t give away your secret sauce, but what can you tell us about this process, and why it makes a difference?
Al S: Well, a fully-managed process should always start with a current state vs desired state analysis. This is done by first reviewing the customer’s current solutions and business processes. Then gathering the “wish list” of what they would like to have as a replacement or enhancement. Analyzing the current state against the desired state enables the development of a gap report detailing those items that are missing and we encourage the customer to rank those gaps by importance.
This is a critical step missing from most RFP processes. Without understanding what components of the desired state are more critical than others, responders may spend more time focusing on items that aren’t as important to the customer. In addition if the solutions available can only solve a percentage of the gap items, some may feel they are disqualified when in fact they have the best solution for the most critical pieces.
LDV: Interesting. The end goal is only half of the equation. We also need to understand our starting point. That makes sense to me. Is there anything else special about your methodology?
Mike B: The other key difference in our process is the feasibility analysis of the desired state. Too often customers come up with the panacea of solutions and requirements and the technology or solutions just don’t exist yet to meet there expectations. It is better to find out what is feasible before proceeding with a full RFP. Once it is determined that a solution is feasible, drafting a design specification for vendors to respond to, which lists core-requirements, but also identifies ‘desirable options,’ will help tailor the responses to what’s important to the customer.
LDV: It isn’t easy to tell customers they can’t have everything they want. But I can see where it prevents some major problems down the road. Can we get into the nuts and bolts of the actual process a bit?
Mike B: We strongly recommend a streamlined Request for Information – Request for Qualification – Request for Proposal – Best and Final Bid phased approach. This may sound like more work than a simple RFP, but it can scale back to an appropriate amount of customer participation time under our program management. RFI takes the clearly articulated needs of a solution and puts it out for vendors to respond with viable solutions dialogue – customers can learn a lot and better narrow down their essential requirements separating desired options, in a documented RFP specification.
The RFQ step of the process may be as simply as a letter of invitation to bid to certain qualified vendors, or a more formal criteria specification / vendor response round. Getting to know what qualified vendors can offer, their strengths and weakness, can be a very critical part of the learning process in assigning importance to the RFP criteria, and later in evaluating vendor responses.
Finally, the RFP offer is put out to qualified vendors only (which saves customer evaluation time) with responses being specific and at ‘best pricing’. Optionally, it can be stated that if two or more vendor solutions appear viable – a best and final bidding round allowing for minor solution changes and best and final pricing can be allowed.
LDV: That all sound compelling, but there are a number of other consultants in this space that offer RFP services. I’ve worked for/with a few of them myself. How does Video Advisors expect to stand out.
Al S: In most cases, other RFP services are generalists, treating every RFP the same. At Video Advisors we are industry-insiders with a focus on Video and Collaboration solutions. We can apply lessons learned with other customers looking for similar solutions, while adjusting to each business’s unique requirements. We are also looped into the reality between manufacturers marketing and the reality of the true capability of their products, to help customers navigate the confusing array of technical solutions being thrown at them.
With twenty years of experience helping customers design, implement, fix, and manage these technologies, there aren’t many challenges we come up against, that we haven’t dealt with before. As a result we can help customers avoid pitfalls and mistakes, resulting in better and sustained success as well as improved return-on-investment.
LDV: Thank you both. I am constantly writing about shake-ups in the visual collaboration industry, but I think my side of the business, the analyst/consulting side, could use a little shaking up now and then as well. If only to keep me (and my competitors) on our collective toes. I look forward to watching your next moves and appreciate you taking the time for this interview.
Al S: Thank you, we appreciate the discussion.
Mike B: Absolutely, thanks for having us.
Editors Note: Mike and Al will be appearing on an upcoming Let’s Do Video Podcast. You won’t want to miss this one as we will dig into what is happening with Video Advisors, as well as sharing our thoughts on the industry in general.