Make the RIGHT system selection!
An organization (the user) identifies its requirements, which are put into an RFP sent to vendors. The vendors send back RFP responses, i.e., their proposals, which the user evaluates to determine a vendor "short list". Short listed vendors are invited to present a demonstration of their proposed system. A winning vendor is selected, and a contract is negotiated and signed. It is a competitive process that makes the user feel they got the best deal.
But most users do NOT get the best deal! The user in most cases is leaving a very substantial amount of money and vendor concessions on the table. Why? Because of a very serious problem in the traditional RFP process, described in the next two paragraphs.
The traditional RFP process calls for vendor proposals and demonstrations to be first evaluated, and a winning vendor to be selected, before the final contract negotiations regarding deliverables, final price, and payment schedule are even started. This is very bad for the user's negotiating position.
The problem is that the vendor already knows it is the winner, and now has absolutely no incentive to negotiate anything at all. This is especially true if the vendor was notified by letter or email since the assumption is made that the loosing vendors were also notified by letter or email. The vendor now feels all the competition has been eliminated. The result is most users miss out on large amounts of monetary savings and vendor concessions.
First, your RFP should follow a "one-in-one" format that dictates each specific RFP question be about just one criteria to ensure easy, accurate comparison of vendor proposals and precise vendor communication. Please note that all Infotivity RFP templates follow this formatting rule.
Second, you should begin preparing for this new negotiation process once vendor RFP responses (proposals) start arriving. Each should be reviewed to find high-value solutions, i.e., those solutions that solve very important problems at the department or procedural level. Since this review should be conducted when preparing a vendor "short list" it will not add time to your project. All Infotivity RFP templates provide an independent Importance Level column to facilitate the communication of criteria importance to vendors and staff.
Once a vendor "short list" has been determined, and all high-value solutions identified, you are ready to prepare the BAFO request needed to begin the negotiation process, usually prior to inviting any vendor in for a detailed demonstration.
Third, create the BAFO request by combining the best of all the features found in all RFP responses, along with any concessions you want the vendors to make. It is, in fact, a new RFP combining the best features, functions, and methodologies found in all the vendor proposals. Each Infotivity RFP template provides a separate column for combining these features into the final BAFO Request.
Fourth, start the negotiations by sending all the shortlisted vendors a "Best and Final Offer" (BAFO) request prior to inviting any vendor to present a demonstration.
If the BAFOs received are still not yet as competitive as needed, you can easily communicate to each vendor just where their proposal needs to be improved, all without disclosing proprietary or confidential vendor information. This almost guarantees their proposal will become more competitive, or they will refuse to provide a BAFO. If a vendor is not able or is unwilling to provide a BAFO you have the upper hand since you can eliminate the vendor at that point or elect to wait until no other, better proposals are submitted. Note that this step could be taken instead of creating the combination BAFO RFP described above.
For best results, I always recommend that a copy of the contract you would like to use be sent to vendors along with the RFP, and the vendors must be required to review the contract and include all contract issues and problems in their RFP response (proposal). The customer can then explain to vendors why their contractual issues are .not acceptable and how to improve them. Note: All Infotivity RFP Masters already have facilities to gather this contractual information.
Infotivity RFP templates provide ALL the criteria needed, in the right format, to select the BEST system for your needed at the Lowest Total Cost of Ownership (TCO). A Best and Final Offer (BAFO) Letter helps you obtain the best price!
You may also be interested in obtaining better, more usable, information from a software demonstration. If so, please follow this link to learn about Demonstration Script.
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