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Episode 3: RFP for an ERP renewal – let’s keep calm and focused

In the previous chapters, we figured out that we really do need an ERP project and what processes the new ERP needs to cover. Now, we need to find out who is the best dancing partner and what kind of dancing shoes they should be wearing. Dancing shoes being the actual ERP core software and the extra pieces of software the vendor will be using.

I have seen multiple approaches to the RFP phases. Multimillion euro projects purchased based on a couple of slides as well as small projects where the RFP excel spreadsheet might contain hundreds, or in the worst-case thousands, of requirements. Here, the key is to find the essential information. If you drown the potential suppliers with unnecessary information, there is a high risk that they too will be missing the key ideas. So, when creating the RFP, try to highlight the essential. 

In one case, the customer RFP was focused only on production but also noted that GL, FA, AR and AP will be taken into use. When I asked the customer about the requirements, they said they trust that the system has all the needed functionality as it has been a long-term player in the market. The project was delivered on time and the finance part worked as well. 

Finding the key things could be one the hardest things to do. It might be extremely hard for a company’s key personnel to know which key things need to be highlighted. If you’ve worked in the company for a long time, you may have lost the ability to evaluate these kinds of things. I strongly recommend using an external company to help you in creating the RFP. This is an extremely important job, as it will be the first step towards the start of the project. If you start running in the wrong direction, you will find yourself further from the goal than when you started. Also, it is not uncommon that the RFP is re-examined during the project execution by the project implementation team when trying to figure out whether something is a change to the original agreed scope or not.

I would also recommend that you start talking to potential vendors openly about your upcoming project. Be as open as possible because, in some cases, you will get good ideas from them and talking to their references. Even at this early stage, this might bring up valid points that need to be considered. I am a strong believer in the delivery team and do not emphasize company level references that much. Sure, they will give you an idea of previous projects and how well they went, but if the consultants you get in your project have not worked on those projects, the references will not tell you that much.

Have a chat with the key individuals from all the vendors. For example, the project manager and the architect are key persons for a successful project. Just remember, you are not looking for someone to go fishing with (you can if you want, but that is an extra bonus). You want a team with the right mixture of skills and passion for your project. Don’t be scared of new consultants, just make sure that they have enough senior support on the vendor team. You can also ask for personal references, as changing a key person mid project might lead to all sorts of headaches that are best to be avoided.

When you finally get the responses to the RFPs, read them carefully. I cannot emphasize this enough, as in many cases customer CxOs just skim the executive summary due to their extremely busy schedule with day-to-day business things. What can happen is that they have a  look at the price and then head home. Quite often, I have run into discussions later in the project about why a specific approach was selected? Usually the reason can be found in the RFP response and was approved by the customer without completely realising what it meant. 

Also, keep the vendors up to date on what is happening and, if possible, ask for modifications to the RFP if you notice they have misunderstood something or don’t like some of the ideas they have presented.

When evaluating the RFPs, I think the best approach is to give the vendor enough time to thoroughly explain their proposal face to face, see their roadmap, hear their concerns and justify the price. Depending on the RFP type, the proposals might be hard to compare, as different technologies work in different ways. 

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