Select a Sourcing Partner for Your Application Development Team

Choose the right partner to enable your firm to maximize the value realized from your sourcing strategy.

Analyst Perspective

Selecting the right partner for your sourcing needs is no longer a cost-based exercise. Driving long-term value comes from selecting the partner who best matches your firm on a wide swath of factors and fits your needs like a glove.

Sourcing in the past dealt with a different kind of conversation involving two key questions: Where will the work be done? How much will it cost? How people think about sourcing has changed significantly. People are focused on gaining a partner, and not just a vendor to execute a single transaction. They will add skills your team lacks, and an ability to adapt to your changing needs, all while ensuring you operate within any constraints based on your business. Selecting a sourcing partner is a matching exercise that requires you to look deep into yourself, understand key factors about your firm, and then seek the partner who best meets your profile.

Dr. Suneel Ghei Principal Research Director, Application Development Info-Tech Research Group

Executive Summary

Info-Tech Insight

Successfully selecting a sourcing partner is not a simple RFP exercise to choose the lowest cost. It is a complex process of introspection, detailed examination of partners and locations, and matching the fit. It requires you to seek a partner that is the Yin to your Yang, and failure is not an option.

You need a new source for development resources

You are facing immediate challenges that require a new approach to development resourcing.

• Your firm is under fire; you are facing pressures financially from clients and your competitors.
• Your pace of innovation and talent sourcing is too slow and too limiting.
• Your competition is moving faster and your clients are considering their options.
• Revenues and costs of development are trending in the wrong direction.
• You need to act now to avoid spiraling further.

Given how critical our applications are to the business and our clients, there is no room for error in choosing our partner.

A study of 121 firms outsourcing various processes found that 50% of those surveyed saw no gains from the outsourcing arrangement, so it is critical to make the right choice the first time.

Source: Zhang et al

Big challenges await you on the journey

The road to improving sourcing has many potholes.

• In a study of 121 firms who moved development offshore, almost 50% of all outsourcing and offshoring initiatives do not achieve the desired results.
• In another study focused on large corporations, it was shown that 70% of respondents saw negative outcomes from offshoring development.
• Globalization of IT Services and the ability to work from anywhere have contributed to a significant increase in the number of development firms to choose from.
• Choosing and implementing a new partner is costly, and the cost of choosing the wrong partner and then trying to correct your course is significant in dollars and reputation:
  • Costs to find a new partner and transition
  • Lost revenue due to product issues
  • Loss of brand and reputation due to poor choice
• The wrong choice can also cost you in terms of your own resources, increasing the risk of losing more knowledge and skills.

A survey of 25 large corporate firms that outsourced development offshore found that 70% of them had negative outcomes.

(Source: University of Oregon Applied Information Management, 2019)

Info-Tech’s approach

Selecting the right partner is a matching exercise.

Selecting the right partner is a complex exercise with many factors

1. Look inward. Assess your culture, your skills, and your needs.

• Market
• People
• Culture
• Technical aspects

• Sourcing Strategy
• Priorities
• Profile

• Define RFx
• Target Partners
• Evaluate

• Contract Partner
• Develop Goals
• Create Process and Metrics

The Info-Tech difference:

1. Assess your own organization’s characteristics and capabilities in four key areas.
2. Based on these characteristics and the sourcing strategy you are seeking to implement, build a profile for your perfect partner.
3. Define an RFx and assessment matrix to survey the market and select the best partner.
4. Implement the partner with process and controls to manage the relationship, built collaboratively and in place day 1.

Insight summary

Addressing the myth – Single country offshoring or outsourcing

Research shows that a multi-country approach has a higher chance of success.

• Research shows that firms trying their own captive development centers fail 20% of the time. ( Journal of Information Technology, 2008)
• Further, the overall cost of ownership for an offshore center has shown to be significantly higher than the cost of outsourcing, as the offshore center requires more internal management and leadership.
• Research shows that offshoring requires the offshore location to also house business team members to allow key relationships to be built and ensure more access to expertise. (Arxiv, 2021)
• Given the specificity of employment laws, cultural differences, and leadership needs, it is very beneficial to have a Corporate HR presence in countries where an offshore center is being set up. (Arxiv, 2021)
• Lastly, given the changing climate on security, geopolitical changes, and economic factors, our research with service providers and corporate clients shows a need to have more diversity in provider location than a single center can provide.

Info-Tech Insight

Long-term success of sourcing requires more than a development center. It requires a location that houses business and HR staff to enable the new development team to learn and succeed.

Addressing the myth – Outsourcing is a simple RFP for skills and lowest cost

Success in outsourcing is an exercise in finding a match based on complex factors.

• In the past, outsourcing was a simple RFP exercise to find the cheapest country with the skills.
• Our research shows this is no longer true; the decision is now more complex.
• Competition has driven costs higher, while time business integration and security constraints have served to limit the markets available.
• Company culture fit is key to the ability to work as one team, which research shows is a key element in delivery of long-term value. (University of Oregon, 2019).
• These are some of the many factors that need to be considered as you choose your outsourcing partner.
• The right decision is to find the vendor that best matches the current state of your culture, meets your market constraints, and will allow for best integration to your team – it's not about cheapest or pure skills. (IEEE Access, 2020)

Info-Tech Insight

Finding the right outsourcing vendor is an exercise in knowing yourself and then finding the best match to align with your key traits. It's not just costs and skills, but the partner who best matches with your ability to mitigate the risks of outsourcing.

Phase 1

Look inward to gain insight on key factors

This phase will walk you through assessing and documenting the key driving factors about your firm and the current situation.

By defining these factors, you will be able to apply this information in the matching process to select the best fit in a partner.

This phase involves the following participants:

Line of Business leaders

Technology leaders

Key criteria to assess your firm

Research shows firms must assess themselves in different areas.

Market factors

• Who are your clients and your competitors, and what legal constraints do you face?

People / Process factors

• What employee skills are you seeking, what is your maturity in product management and stakeholder engagement, and what languages are spoken most predominantly?

Cultural factors

• What is your culture around communications, collaboration, change management, and conflict resolution?

Technical factors

• What is your current / future technical platform, and what is the maturity of your applications?

Info-Tech Best Practice

When assessing these areas, consider where you are today and where you want to go tomorrow, as choosing a partner is a long-term endeavor.

Step 1.1

Assess your market factors

Activities

1.1.1 Review your client list and future projections to determine your market factors.

1.1.2 Review your competitive analysis to determine your competitive factors

This step involves the following participants:

Business leaders

Product Owners

Technology leaders

Outcomes of this step

Details of key market factors that will drive the selection of the right partner.

Market factors

The Market has a lot to say about the best match for your application development partner.

Research in the space has defined key market-based factors that are critical when selecting a partner.

1. Market sectors you service or plan to service – This is critical, as many market sectors have constraints on where their data can be accessed or stored. These restrictions also change over time, so they must be consistently reviewed.

• E.g. Canadian government data must be stored and only accessed in Canada.
• E.g. US Government contracts require service providers to avoid certain countries.

Info-Tech Insight

Understanding your current and future market factors ensure that your business can not only be successful with the chosen partner today, but also in the future.

1.1.1 Assess your market factors

30 min

Market factors

1. Group your current client list into three categories:
   1. Those that have no restrictions on data security, privacy or location.
   2. Those that ask for assurances on data security, privacy and location.
   3. Those clients who have compliance restrictions related to data security, privacy, and location.
2. Categorize future markets into the same three categories.
3. Based on revenue projections, estimate the revenue from each category as a percentage of your total revenue.

Download the Select a Sourcing Partner Presentation Template

Assess your market factors

1.1.2 Review your competitive factors

30 min

Competitive factors

1. List your largest competitors.
2. Document their sourcing strategies for their development team – are they all onshore or nearshore? Do they outsource?
3. Based on this, identify competitive threats based on changing sourcing strategies.

Download the Select a Sourcing Partner Presentation Template

Review your competitive factors

Step 1.2

Consider your people-related factors

Activities

1.2.1 Define your people factors

1.2.2 Assess your process factors

This step involves the following participants:

Technical leaders

Outcomes of this step

Details of key people factors that will drive the selection of the right partner.

People / process factors

People and process have a large hand in the success or failure of a partner relationship.

• Alignment of people and process are critical to the success of the partner relationship over the long term.
• In research on outsourcing / offshoring, Rahman et al identified ten factors that directly impact success or failure in offshoring or outsourcing of development.
• Key among them are the following:
  • Employee skills
  • Project management
  • Maturity of process concerning product and client management
  • Language barrier

Info-Tech Insight

People are a critical resource in any sourcing strategy. Making sure the people and the processes will mesh seamlessly is how to ensure success.

1.2.1 Define your people factors

30 min

Skills Inventory

1. List skills needed in the development team to service current needs.
2. Based on future innovation and product direction, add skills you foresee needing in the next 12-24 months. Where do you see a new technology platform (e.g. move from .NET to Java) or innovation (addition of Mobile)?
3. List current skills present in the team.
4. Identify skills gaps.

Download the Select a Sourcing Partner Presentation Template

Assess your people - Skills inventory

1.2.2 Assess your process factors

30 min

Process factors

1. Do you have a defined product ownership practice?
2. How mature is the product ownership for the product you are seeking to change sourcing for (H/M/L)?
3. Do you have project management principles and governance in place for software releases?
4. What is the relative maturity / skill in the areas you are seeking sourcing for (H/M/L)?

Download the Select a Sourcing Partner Presentation Template

Assess your process factors

Step 1.3

Review your current culture

Activities

1.3.1 Assess your communications factors

1.3.2 Assess your conflict resolution factors

This step involves the following participants:

Technical leaders

Product owners

Project managers

Outcomes of this step

Details of key culture factors that will drive the selection of the right partner.

Cultural factors

Organization culture fit is a driver of collaboration between the teams, which drives success.

• In their study of country attractiveness for sourcing development, Kotlarsky and Oshri point to the ability of the client and their sourcing partner to work as one team as a key to success.
• This requires synergies in many cultural factors to avoid costly miscommunications and misinterpretations that damage collaboration.
• Key factors in achieving this are:
  • Communications methodology and frequency; managing and communicating to the teams as one team vs two, and communicating at all levels, vs top down.
  • Managing the team as one integrated team, with collaboration enabled between all resources, rather than the more adversarial client vs partner approach.
  • Conflict resolution strategies must align so all members of the extended team work together to resolve conflict vs the traditional “Blame the Contractors”.
  • Strong change management is required to keep all team members aligned.

Info-Tech Insight

Synergy of culture is what enables a good partner selection to become a long-term relationship of value.

1.3.1 Assess your communications factors

30 min

1. List all the methods you use to communicate with your development team – face to face, email, conference call, written.
2. For each form of communication confirm frequency, medium, and audience (team vs one-on-one)
3. Confirm if these communications take into account External vs Internal resources and different time zones, languages, and cultures.
4. Is your development team broken up into teams by function, by location, by skill, etc., or do you operate as one team?

Download the Select a Sourcing Partner Presentation Template

Assess your communications strategy

1.3.2 Assess your conflict resolution factors

30 min

1. How does your organization handle the following types of conflict? Rate from 1-5, with 1 being hierarchical and 5 being openly collaborative.
   1. Developers on a team disagree.
   2. Development team disagrees with manager.
   3. Development team disagrees with product owner.
   4. Development team disagrees with line of business.
2. Rate each conflict resolution strategy based on effectiveness.
3. Confirm if this type of strategy is used for internal and external resources, or internal only.

Download the Select a Sourcing Partner Presentation Template

Assess your conflict resolution strategy

Step 1.4

Document your technical factors

Activities

1.4.1 Document your product / platform factors

1.4.2 Document your environment details

This step involves the following participants:

Technical leaders

Product owners

Outcomes of this step

Details of key technical factors that will drive the selection of the right partner.

Technical factors

Technical factors are still the foundation for a Development sourcing relationship.

• While there are many organizational factors to consider, the matching of technological factors is still the root on which the sourcing relationship is built; the end goal is to build better software.
• Key technical Items that need to be aligned based on the research are:
  • Technical infrastructure
  • Development environments
  • Development methodology and tools
  • Deployment methodology and tools
  • Lack of/poor-quality technical documentation
• Most RFPs focus purely on skills, but without alignment on the above items, work becomes impossible to move forward quickly, limiting the chances of success.

Info-Tech Insight

Technical factors are the glue that enables teams to function together. Ensuring that they are fully integrated is what enables team integration; seams in that integration represent failure points.

1.4.1 Document your product / platform factors

30 mins

1. How many environments does each software release go through from the start of development through release to production?
2. What is the infrastructure and development platform?

Download the Select a Sourcing Partner Presentation Template

Document your product / platform

1.4.2 Document your environment details

30 min

For each environment detail the following:

1. Environment on premises or in cloud
2. Access allowed to external parties
3. Production data present and unmasked
4. Deployment process: automated or manual
5. Tools used for automated deployment
6. Can the environment be restored to last known state automatically?
7. Does documentation exist on the environment, processes and procedures?

Download the Select a Sourcing Partner Presentation Template

Document Your Environment Details

Phase 2

This phase will help you to build a profile of the partner you should target in your search for a sourcing partner.

This phase involves the following participants:

Technology leaders

Procurement leaders

Product owners

Project managers

Build a profile for the right partner

• Finding the perfect partner is a puzzle to solve, an exercise between the firm and the partners.
• It is necessary to be able to prioritize and to identify opportunities where you can adapt to create a fit.
• You must also bring forward the sourcing model you are seeking and prioritize factors based on that; for example, if you are seeking a nearshore partner, language may be less of a factor.

Review factors based on sourcing choice

Different factors are more important depending on whether you are insourcing or outsourcing.

Key risks for insourcing

• Alignment on communication strategy and method
• Ability to align culturally
• Need for face-to-face relationship building
• Need for coaching skills

Key risks for outsourcing

• Giving control to the vendor
• Legal and regulatory issues
• Lack of knowledge at the vendor
• Language and cultural fit

Assessing your firm's position

• The model you derived from the Sourcing Strategy research will inform the prioritization of factors for matching partners.

Info-Tech Insight

To find the best location for insourcing, or the best vendor for outsourcing, you need to identify your firm's positions on key risk areas.

Step 2.1

Recall your sourcing strategy

Activities

2.1.1 Define the key factors in your sourcing strategy

This step involves the following participants:

Technology Leaders

Outcomes of this step

Documentation of the Sourcing Strategy you arrived at in the Define a Sourcing Strategy exercises

Choosing the right model

Determinant	Key Questions to Ask	Onshore	Nearshore	Offshore	Outsource role(s)	Outsource team	Outsource product(s)
Business dependence	How much do you rely on business resources during the development cycle?
Absorptive capacity	How successful has the organization been at bringing outside knowledge back into the firm?
Integration complexity	How many integrations are required for the product to function – fewer than 5, 5-10, or more than 10?
Product ownership	Do you have full-time product owners in place for the products? Do product owners have control of their roadmaps?
Organization culture fit	What are your organization’s communication and conflict resolution strategies? Is your organization geographically dispersed?
Vendor mgmt skills	What is your skill level in vendor management? How old are your longest-standing vendor relationships?

2.1.1 Define the key factors in your sourcing strategy

30 min

For each product you are seeking a sourcing strategy for, document the following:

1. Product or team name.
2. Sourcing strategy based on Define a Sourcing Strategy.
3. The primary drivers that led to this selection – Business Dependence, Absorptive Capacity, Integration Complexity, Product Ownership, Culture or Vendor Management.
4. The reasoning for the selection based on that factor – e.g. we chose nearshoring based on high business dependence by our development team.

Download the Select a Sourcing Partner Presentation Template

Define sourcing strategy factors

Step 2.2

Prioritize your company factors

Activities

2.2.1 Prioritize the factors from your sourcing strategy and confirm if mitigation or adaptation are possible.

This step involves the following participants:

IT Leadership team

Outcomes of this step

Prioritized list of key factors

2.2.1 Prioritize your sourcing strategy factors

30 min

1. For each of the factors listed in exercise 2.1, prioritize them by importance to the firm.
2. For each factor, please confirm if there is room to drive change internally to overcome the lack of a match – for example, if the culture being changed in language and conflict resolution is an option, then say Yes for that factor.

Download the Select a Sourcing Partner Presentation Template

Sourcing strategy factors and priority

Step 2.3

Create target profile

Activities

2.3.1 Profile your best fit

This step involves the following participants:

IT Leadership team

Outcomes of this step

Profile of the target partner

Profiling your best fit

Creating a target profile will help you determine which partners should be included in the process.

Given the complexity of all the factors and trying to find the best fit from a multitude of partners, Info-Tech recommends forming a target profile for your best fit of partner.

This profile provides a detailed assessment matrix to use to review potential partners.

Profile should be created based on priority; "must haves" are high priority, while properties that have mitigation opportunities are optional or lower priority.

Partner Profile

• Teams in NATO and non-NATO countries
• Windows skills with Azure
• Financial Services experience
• Utilize Agile and willing to plug into our teams
• Used to collaborating with clients in one team environment
• One centre in Latin / South America

Info-Tech Insight

The factors we have defined serve to build us a profile for the ideal partner to engage in sourcing our development team. This profile will lead us to be able to define our RFP / RFI and assess respondents.

Case study: Cognizant is partnering with clients on product development

INDUSTRY: Technology Services

SOURCE: Interview with Jay MacIsaac, Cognizant

Cognizant is driving quality solutions for clients

• Strives to be primarily an industry-aligned organization that delivers multiple service lines in multiple geographies.
• Seeks to carefully consider client culture to create one team.
• Value proposition is a consultative approach bringing thought leadership and mutually adding value to the relationship vs the more traditional order taker development partner
• Wants to share in solution development to facilitate shared successes. Geographic alignment drives knowledge of the client and their challenges, not just about time zone and supportability.
• Offers one of the largest offshore capabilities in the world, supported by local and nearshore resources to drive local knowledge.
• Realizes today’s clients don’t typically want a black box, they are sophisticated and want transparency around the process and solution, to have a partner.
• Understands that clients do want to know where the work is being delivered from and how it's being delivered, and want to help manage expectations and overall risk.

Synergy with Info-Tech’s approach

• Best relationship comes when teams operate as one.
• Clients are seeking value, not a development black box.
• Clients want to have a partner they can engage with, not just an order taker.
• Goal is a one-team culture with shared goals and delivering business value.
• Ideal is a partner that will add to their thinking, not echo it.

Results of this approach

• Cognizant is continuing to deliver double-digit growth and continues to strive for top quartile performance.
• Growth in the client base has seen the company grow to over 340,000 associates worldwide.

Case study: Cabot Technology Solutions uses industry knowledge to drive successful partnerships

INDUSTRY: Technology Services

SOURCE: Interview with Shibu Basheer, Cabot Technology Solutions

Cabot Technology Solutions findings

• Cabot Technology Solutions looks to partner with clients and deliver expertise and value, not just application development.
  • Focus on building deep knowledge in their chosen vertical, Healthcare.
  • Focus on partnering with clients in this space who are seeking a partner to provide industry knowledge and use this to propel them forward.
  • Look to work with clients seeking a one team philosophy.
  • Avoid clients looking for a cheap provider.
• Recognizing the initial apprehension to India as a location, they have built a practice in Ontario that serves as a bridge for their offshore team.
• Cabot overcame initial views and built trust, while integrating the India team in parallel.

Synergy with Info-Tech approach

• Preference is partners, not a client/vendor relationship.
• Single country model is set aside in favor of mix of near and offshore.
• Culture is a one team approach, not the more adversarial order-taker approach.
• Goal is to build long-term relationships of value, not task management.

Results of this approach

• Cabot is a recognized as a top software development company in many markets across the USA.
• Cabot continues to drive growth and build referenceable client relationships across North America.

2.3.1 Profile your best fit

30 min

1. Document the list of skills you are seeking from the People Factors – Skills Inventory in Section 1.2 – these represent the skills you are seeking in a partner.
2. Document the culture you are looking for in a partner with respect to communications and conflict resolution in the culture section of the requirements – this comes from Section 1.3.
3. Confirm the type of partner you are seeking – nearshore, offshore, or outsourcing based on the sourcing strategy priorities in Section 2.2.
4. Confirm constraints that the partner must work under based on constraints from your market and competitor factors in Section 1.1.
5. Confirm your technical requirements in terms of environments, tools, and processes that the vendor must align to from Section 1.4.

Download the Select a Sourcing Partner Presentation Template

RFP skills requirement

RFx cultural characteristics

RFx market constraints

RFx technical requirements

RFx scope of services

Phase 3

Choose the partner that will best enable you to move forward as one integrated team.

For more details on Partner Selection, please refer to our research blueprint entitled Select an ERP Partner

This phase will help you define your RFx for your provider search

This phase involves the following participants:

Vendor Management Team

IT Leadership

Finance Team

Finding the right fit should always come before rates to determine value

Statement of Work (SOW) quality

A quality SOW is the result of a quality RFI/RFP (RFx).

The process up to now has been gathering the materials needed to build a quality RFx. Take this opportunity to review the outputs of the preceding activities to ensure that:

• All the right stake holders have been engaged.
• The requirements are complete.

Info-Tech’s RFP Review as a Service looks for key items to ensure your RFx will generate quality responses and SOWs.

• Is it well-structured with a consistent use of fonts and bullets?
• Is it laid out in sections that are easily identifiable and progress from high-level to more detailed information?
• Can a vendor quickly identify the ten (or fewer) things that are most important to you?

Step 3.1

Review your RFx

Activities

3.1.1 Select your RFx template

3.1.2 Finalize your RFx

3.1.3 Weight each evaluation criteria

This step involves the following participants:

• Project team
• Evaluation team
• Vendor management team
• CIO

Outcomes of this step

• Completed RFx

Info-Tech’s RFI/RFP process

Info-Tech has well-established vendor management templates and practices

• Identify Need
• Define Business Requirements
• Gain Business Authorization
• Perform RFI/RFP
• Negotiate Agreement
• Purchase Goods and Services
• Assess and Measure Performance

Info-Tech Best Practice

You’ll want to customize templates for your organization, but we strongly suggest that you take whatever you feel best meets your needs from both the long- and short-form RFPs presented in this blueprint.

The secret to managing an RFP is to make it manageable. And the secret to making an RFP manageable is to treat it like any other aspect of business – by developing a process. With a process in place, you are better able to handle whatever comes your way, because you know the steps you need to follow to produce a top-notch RFP.

Your RFP process should be tailored to fit the needs and specifics of your organization and IT.

Info-Tech Insight

Create a better RFP process using Info-Tech’s well-established templates and methodology.

Create a Better RFP Process

In a hurry? Consider an enhanced RFI instead of an RFP.

While many organizations rarely use RFIs, they can be an effective tool in the vendor manager’s toolbox when used at the right time in the right way. RFIs can be deployed in competitive targeted negotiations. An enhanced RFI (ERFI) is a two-stage strategy that speeds up the typical RFP process. The first stage is like an RFI on steroids, and the second stage is targeted competitive negotiation.

Stage 1:

Create an RFI with all the customary components. Next, add a few additional RFP-like requirements (e.g. operational and technical requirements). Make sure you include a request for budgetary pricing and provide any significant features and functionality requirements so that the vendors have enough information to propose solutions. In addition, allow the vendors to ask questions through your single point of coordination and share answers with all the vendors. Finally, notify the vendors that you will not be doing an RFP – this is it!

Stage 2:

Review the vendors’ proposals and select the best two. Negotiate with both vendors and then make your decision.

The ERFI shortens the typical RFP process, maintains leverage for your organization, and works great with low- to medium-spend items (however your organization defines them). You’ll get clarification on vendors’ competencies and capabilities, obtain a fair market price, and meet your internal clients’ aggressive timelines while still taking steps to protect your organization.

RFI Template

Use this template to create your RFI baseline template. Be sure to modify and configure the template to your organization’s specifications.

Request for Information Template

Long-Form RFP Template

Configure Info-Tech’s Long-Form RFP Template for major initiatives

A long-form or major RFP is an excellent tool for more complex and complicated requirements. This example is for a baseline RFP.

It starts with best-in-class RFP terms and conditions that are essential to maintaining your control throughout the RFP process. The specific requirements for the business, functional, technical, and pricing areas should be included in the exhibits at the end of the template. That makes it easier to tailor the RFP for each deal, since you and your team can quickly identify specific areas that need modification. Grouping the exhibits together also makes it convenient for both your team to review, and the vendors to respond.

You can use this sample RFP as the basis for your template RFP, taking it all as is or picking and choosing the sections that best meet the mission and objectives of the RFP and your organization.

Source: Info-Tech’s The Art of Creating a Quality RFP

Short-Form RFP Template

Configure Info-Tech’s Short-Form RFP Template for minor or smaller initiatives

This example is for a less complex RFP that has relatively basic requirements and perhaps a small window in which the vendors can respond. As with the long-form RFP, exhibits are placed at the end of the RFP, an arrangement that saves time for both your team and the vendors. Of course, the short-form RFP contains fewer specific instructions, guidelines, and rules for vendors’ proposal submissions.

We find that short-form RFPs are a good choice when you need to use something more than a request for quote (RFQ) but less than an RFP running 20 or more pages. It’s ideal, for example, when you want to send an RFP to only one vendor or to acquire items such as office supplies, contingent labor, or commodity items that require significant vendor's risk assessment.

Source: The Art of Creating a Quality RFP

3.1.1 Select your RFx template

1-3 hours

1. As a group, download the RFx templates from the previous three slides.
2. Review your RFx process as a group. Be sure to include the vendor management team.
3. Be sure to consider organization-specific procurement guidelines. These can be included. The objective here is to find the template that is the best fit. We will finalize the template in the next activity.
4. Determine the best template for this project.

Finalize your RFx

Key insights

Leverage the power of the RFP

• Too often RFPs fail to achieve their intended purposes, and your organization feels the effects of a poorly created RFP for many years.
• If you are faced with a single source vendor, you can perform an RFP to one to create the competitive leverage.

Make the response and evaluation process easier

• Being strategic in your wording and formatting makes it easier on both parties – easier for the vendors to submit meaningful proposals, and easier for customer teams to evaluate.
• Create a level playing field to encourage competition. Without multiple proposals, your options are limited and your chances for a successful project plummet.

Maximize the competition

• Leverage a pre-proposal conference to resolve vendor questions and to ensure all vendors receive the same answers to all questions. No vendor should have an information advantage.

Do’s

• Leverage your team’s knowledge.
• Document and explain your RFP process to stakeholders and vendors.
• Include contract terms in your RFP.
• Measure and manage performance after contract award.
• Seek feedback from the RFP team on your process and improve it as necessary.

Don'ts

• Reveal your budget.
• Do an RFP in a vacuum.
• Send an RFP to a vendor your team is not willing to award the business to.
• Hold separate conversations with candidate vendors during your RFP process.
• Skimp on the requirements definition to speed the process.
• Tell the vendor they are selected before negotiating.

3.1.2 Finalize your RFx

1-3 hours

1. As a group, review the selected RFI or RFP template.
2. This is YOUR document. Modify it to suit the needs of the organization and even add sections from the other RFP templates that are relevant to your project.
3. Use the Supplementary RFx Material as a guide.
4. Add the content created in Steps 1 and 2.
5. Add any organization-specific clauses or requirements.
6. Have the project team review and comment on the RFP.
7. Optional: Use Info-Tech’s RFP Review Concierge Service.

Download the RFx Vendor Evaluation Tool

Download the Supplementary RFx Material

3.1.2 Bring it all together

Supplementary RFx Material		Review the sample content to get a feel for how to incorporate the results of the activities you have worked through into the RFx template.	⇒	RFx Templates Use one of our templates to build a ready-for-distribution implementation partner RFx tailored to the unique success factors of your implementation.
Exercises in Steps 1 and 2		Use the material gathered during each activity to inform and populate the implementation partner requirements that are specific for your organization and project.

3.1.3 Weight each evaluation criteria

1-3 hours

1. As a group, review the selected RFI or RFP template.
2. This is your document. Modify it to suit the needs of the organization and even add sections from the other RFP templates that are relevant to your project.
3. Use the Supplementary RFx Material as a guide.
4. Utilize the content defined in Steps 1 and 2.
5. Add any organization-specific clauses or requirements.
6. Have the project team review and comment on the RFP.
7. Optional: Use Info-Tech’s RFP Review Concierge Service.

Download the Supplementary RFx Material

3.1.3 Apply weight to each evaluation criteria

Use this tool to weight each critical success factor based on results of the activities within the vendor selection workbook for later scoring results.

Download the RFx Vendor Evaluation Tool

Step 3.2

Identify target vendors

Activities

3.2.1 Identify target vendors

3.2.2 Define your RFx timeline

This step involves the following participants:

• Project team
• Vendor management team

Outcomes of this step

• Targeted vendor list
• Initial RFx timeline

3.2.1 Identify target vendors

1-3 hours

1. Based on the profile defined in Step 2.3, research potential partners that fit the profile, starting with those you may have used in the past. From this, build your initial list of vendors to target with your RFx.
2. Break into smaller groups (or continue as a single group if it is already small) and review each shortlisted vendor to see if they will likely respond to the RFx.

Download the RFx Vendor Evaluation Tool

Define your RFx timeline

Provider RFx timelines need to be clearly defined to keep the project and participants on track. These projects and processes can be long. Set yourself up for success by identifying the time frames clearly and communicating them to participants.

1. Current

• Concurrent ERP product selection
• RFx preparation
• Release of RFX

• Responses received
• Scoring responses
• Shortlisting providers
• Provider interviews
• Provider selection
• Provider contract negotiations
• Contract with provider

• Initiation of knowledge transfer
• Joint development period
• Cutover to provider team

89% of roadmap views have at least some representation of time. (Roadmunk, n.d.)

Info-Tech Insight

The true value of time horizons is in dividing your timeline and applying different standards and rules, which allows you to speak to different audiences and achieve different communication objectives.

3.2.2 Define your RFx timeline

1-3 hours

1. As a group identify an appropriate timeline for your RFP process. Info-Tech recommends no less than three months from RFx release to contract signing.
   
   Keep in mind that you need to allow for time to engage the team and perform some level of knowledge transfer, and to seed the team with internal resources for the initial period.
2. Leave enough time for vendor responses, interviews, and reference checks.
3. Once the timeline is finalized, document it and communicate it to the organization.

Download the RFx Vendor Evaluation Tool

Define your RFx timeline

Step 3.3

Evaluate vendor responses

Activities

3.3.1 Evaluate responses

This step involves the following participants:

• Evaluation team

Outcomes of this step

• Vendor submission scores

3.3.1 Evaluate responses

1-3 hours

1. Use the RFx Vendor Evaluation Tool to collect and record the evaluation team's scores for each vendor's response to your RFx.
2. Then record and compare each team member's scores to rank the vendors' responses.
3. The higher the score, the closer the fit.

Download the RFx Vendor Evaluation Tool

3.3.1 Score vendor results

Use the RFx Vendor Evaluation Tool to score the vendors' responses to your RFx using the weighted scale from Activity 3.1.3.

Download the RFx Vendor Evaluation Tool

Phase 4

Measuring the new relationship

This phase will allow you to define the relationship with your newly chosen partner, including choosing the right contract mechanism, defining shared goals for the relationship, and selecting the metrics and processes to measure performance.

This phase involves the following participants:

IT leadership

Procurement team

Product owners

Project managers

Implementing the Partner

Implementing the new partner is an exercise in collaboration

• Successfully implementing your new partner is an exercise in working together

1. Define a contract mechanism that is appropriate for the relationship, but is not meant as punitive, contract-based management – this sets you up for failure.
2. Engage with your team and your partner as one team to build shared, measurable goals
3. Work with the team to define the metrics and processes by which progress against these goals will be measured

Info-Tech Insight

Implement the relationship the same way you want it to work: as one team. Work together on contract mechanism, shared goals, metrics, and performance measurement. This transparency and collaboration will build a one team view, leading to long-term success.

Step 4.1

Engage partner to choose contract mechanism

Activities

4.1.1 Confirm your contract mechanism

This step involves the following participants:

IT leadership

Procurement team

Vendor team

Outcomes of this step

Contract between the vendor and the firm for the services

Negotiate agreement

Evaluate your RFP responses to see if they are complete and if the vendor followed your instructions.

Leverage ITRG's negotiation process research for additional information

For more details on this process please see our research Drive Successful Sourcing Outcomes with a Robust RFP Process

4.1.1 Confirm your contract mechanism

30 min

1. Does the firm have prior experience with this type of sourcing arrangement?
2. Does the firm have an existing services agreement with the selected partner?
3. What contract mechanisms have been used in the past for these types of arrangements?
4. What mechanism was proposed by the partner in their RFP response?

Download the Select a Sourcing Partner Presentation Template

Choose the appropriate contract method

Step 4.2

Engage partner team to define shared goals

Activities

4.2.1 Define your shared goals

This step involves the following participants:

IT leadership

Vendor leadership

Outcomes of this step

Shared goals for the team

Define success and shared goals

Work together to define how you will measure yourselves.

One team

• Treating the new center and the existing team as one team is critical to long-term success.
• Having a plan that allows for teams to meet frequently face-to-face "get to know you" and "stay connected" sessions will help the team gel.

Shared goals

• New group must share common goals and measurements.

Common understanding

• New team must have a common understanding and culture on key facets such as:
  • Measurement of quality
  • Openness to feedback and knowledge sharing
  • Culture of collaboration
  • Issue and Risk Management

4.2.1 Define your shared goals

30 min

1. List each item in the scope of work for the sourcing arrangement – e.g. development of product XXX.
2. For each scope item, detail the benefit expected by the firm – e.g. development cost expected to drop by 10% per year, or customer satisfaction improvement.
3. For each benefit define how you will measure success – e.g. track cost of development for the development team assigned, or track Customer Satisfaction Survey results.
4. For each measure, define a target for this year – e.g. 10% decrease over last year's cost, or customer satisfaction improvement from 6 to 7.

Download the Select a Sourcing Partner Presentation Template

Define goals collaboratively

Step 4.3

Choose your success metrics

Activities

4,3.1 Define metrics and process to monitor

This step involves the following participants:

IT leadership

Product owners

Project managers

Vendor leaders

Outcomes of this step

Metrics and process to measure performance

4.3.1 Define metrics and process to monitor

30 min

1. For each goal defined and measure of success, break down the measure into quantifiable, measurable factors – e.g. Development cost is defined as all the costs tracked to the project including development, deployment, project management, etc.
2. For each factor choose the metric that can be reported on – e.g. project actuals.
3. For each metric define the report and reporting frequency – e.g. monthly project actuals from project manager.

Download the Select a Sourcing Partner Presentation Template

Agreed-upon metrics

Research Contributor

Alaisdar Graham Executive Counsellor Info-Tech Research Group

During Alaisdar’s 35-year career in information and operational technology, Alaisdar has been CIO for public sector organizations and private sector companies. He has been an entrepreneur with his own consultancy and a founder or business advisor with four cyber-security start-ups, Alaisdar has developed experience across a broad range of industries within a number of different countries and become known for his ability to drive business benefits and improvements through the use of technology. Alaisdar has worked with CXO-level executives across different businesses. Whether undertaking a digital transformation, building and improving IT functions across your span of control, or helping you create and execute an integrated technology strategy, Alaisdar can provide insight while introducing you to Info-Tech Research Group’s experts. Alaisdar’s experience with organizational turn- around, governance, project, program and portfolio management, change management, risk and security will support your organization’s success.

Research Contributor

Richard Nachazel Executive Counsellor Info-Tech Research Group

Richard has more than 40 years working in various Fortune 500 organizations. His specialties are collaborating with business and IT executives and senior stakeholders to define strategic goals and transform operational protocols, standards, and methodologies. He has established a reputation at multiple large companies for taking charge of critical, high-profile enterprise projects in jeopardy of failure and turning them around. Colleagues and peers recognize his ability to organize enterprise efforts, build, develop, and motivate teams, and deliver outstanding outcomes. Richard has worked as a Global CISO & Head of IT Governance for a Swiss Insurance company, Richard developed and led a comprehensive Cyber-Security Framework that provided leadership and oversight of the cyber-security program. Additionally, he was responsible for their IT Governance Risk & Compliance Operation and the information data security compliance in a complex global environment. Richard’s experience with organizational turn around, governance, risk, and controls, and security supports technology delivery integration with business success. Richard’s ability to engage executive and senior management decision makers and champion vision will prove beneficial to your organization.

Research Contributor

Craig Broussard Executive Counsellor Info-Tech Research Group

Craig has over 35 years of IT experience including software development, enterprise system management, infrastructure, and cyber security operations. Over the last 20 years, his focus has been on infrastructure and security along with IT service management. He’s been an accomplished speaker and panelist at industry trade events over the past decade. Craig has served as Global Infrastructure Director for NCH Corporation, VP of Information Technology at ATOS, and earlier in his career as the Global Head of Data Center Services at Nokia Siemens Networks. Craig also worked for MicroSolutions (a Mark Cuban Company). Additionally, Craig received formal consulting training while working for IBM Global Services. Craig’s deep experience across many aspects of IT from Governance through Delivery makes him an ideal partner for Info-Tech members.

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