Why you should do a MVP instead of a RFP
March 19, 2021
RFPs are a common way to partner with companies. But frankly, RFPs are a pain for everyone - and they're not very efficient. In this article, I show what problems RFPs pose and why defining an MVP - a Minimum Viable Product - is much more useful and efficient.
Finding new partners is never easy. Choosing the right one can often be the difference between success or failure of your strategy. I believe this is the ultimate objective of all RFPs (Request for Proposal) - finding partners who will guide, engage, accompany and enable you on your new journey. Now this is more important than ever, given the recent changes and challenges companies have faced as a result of the pandemic.
We all know the traditional approach: RFPs are issued by buyers to uncover new companies who can offer the perfect, or near perfect, solution. The presumption here is that buyers know everything they need.
Then again, we've also seen that when pre-set commitments are not met, the result is often disappointment, together with an argument over the finer points of our requirements and our partner's undelivered promises.
So, if we are seeing this repeated so often, the question is begged: why do we persist, and how do we improve on the outcomes? Why exactly are enterprises employing the same procurement methodologies and assumptions again and again - especially now, when the scale of the challenge facing companies is nothing like we have ever seen before?
The way I see it, we really do have to hold ourselves accountable. We simply cannot expect old ideas and systems to provide new solutions to changing challenges. The traditional model of providing a prescriptive brief, receiving submissions and then choosing the most financially attractive and efficient one that ticks all or most of the boxes, is simply no longer viable. Like so many other models in the market, it is now outdated, simply out of touch with the new business climate and almost certainly out of sync with customer expectations.
In fact, it is very arguable that if we continue to follow this path, we are asking to be lied to. We are being provided solutions that, more often than not, do not even exist. There is a term for this in the technology industry: Vapourware.
Now, many around me may not like that I'm calling out the elephant in the room. But it is what it is.
Surely, when you interview for a strategic position, don't you enquire deep into a candidate's actual experience, perhaps even engage with the required background checks with previous employers? The question now is: why is this same diligence not applied when it comes to RFPs? Why is the actual 'platform' itself not a part of the evaluation process? Why would you ever allow someone to sell you vapourware?
The truth is also that in many cases, when putting together an RFP, buyers do not really even know what they actually need. Especially now. Asking your potential partners to fit your brief and constraints, operating a one-way traffic system, actually hinders their ability to respond effectively and work at their best for you. That, in turn, hinders your combined ability to grow, innovate and think of completely new ways of doing business that a post pandemic travel recovery is going to need.
So, let's flip this. Arguably, the only possible solution here is true collaboration – one where interests are very closely aligned. This means working together without all the usual pre-existing conditions. Both parties must be free to bring their expertise and fresh thinking to the table to create new solutions for new problems. But how exactly, you ask?
Enter the “Minimum Viable Product”. The MVP process does not begin with the assumption that all needs are known. In fact, inherent in the process is the idea of learning and discovery. An MVP is a solution that requires the least effort to build while yielding the greatest ability to learn about your customers. In short, discover the essential features of your solution that will meet most user needs. No more, no less.
Discovery and design workshops are a far better solution than buyer-led briefs and pitch-led presentations. Bringing together engaged and unencumbered minds from across business units and leveraging supplier experiences in the industry to address issues together, can create opportunities and answers to questions one party may never have thought of alone. Build essential functionality around these hypotheses and test them in the market. Track results and go back to the drawing board to reiterate. Wash, rinse, repeat.
The net result is a far better outcome than the one from the traditional RFP.
The new breed of innovative, positive, disruptive companies should not be afraid to showcase their thinking. Nor should buyers box them in with pre-determined requirements. New concepts only thrive when tested in the market and challenged by real customers.
But - and it's a big 'but' - focus on the real solutions that have been tried, tested and succeeded, as well as failed. This is the very essence of risk mitigation. It is, in fact, about performing real due diligence of potential partners and their real-world solutions in a way that protects you from the promise of a solution (that may not yet exist, i.e. vapourware). All too often, we have seen beautifully constructed slide-decks containing screen mockups with little or simply no actual real-world implementation experience, resulting in failed projects.
This is precisely why the workshop and discovery process of an MVP is a much, much better process than merely the RFP. For sure, MVPs are not free-of-cost (or risk) in the short-run. But in the longer game, the true value of MVPs lie in the fact that they will save you wasted effort, time and money from irrelevant, incompetent or impossible solutions.
One of the biggest downsides of 500 column excel sheets is that vendors are forced to price in features they might not have out of the box because of the expectation that the customer demands them. This leads to significant overpricing by all vendors to mitigate that risk. Many of those features never actually end up getting used then and the company has paid for them anyway. This leads to increased profits on the vendor side but major waste for the RFP issuer.
Typically this doesn't only lead to increased license costs but also increased OPEX and CAPEX estimations. So buyers beware of simply collecting requirement lists from different departments without proper validation in a consultative scoping process.
Of course, the real essence of any partnership is trust. Such workshops should not represent an opportunity for companies in need to plagiarize the ideas of those who attend it. The sharing of ideas cuts both ways - that is the only way that the co-created solutions can be attractive and work successfully for everyone involved. And if the final deal or contract is not good for everyone, then it will not be good for anyone.
That is the root of many current industry problems - many things have largely been one-sided. This culture simply has to change. Let your partner add, amend and finesse the brief - not just for your benefit, but for theirs, too. But most importantly, for the sake of customers.
What are your thoughts about RFPs and the MVP approach? What challenges do you face when doing or evaluating RFPs and why is your organization still not letting you do a MVP approach? I would love to hear your comments on Linkedin. If you like this article, I would be happy if you share it. Feel free to follow me on Linkedin.
