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Should I use a traditional RFI / RFP model to select a nearshore or offshore outsourcing IT vendor?
As a nearshore IT firm, we often get many requests to participate in an RFI / RFP project. At a first glance, and RFI / RFP process looks like a structured, disciplined and fair methodology to choose a vendor, but in the final analysis, in our opinion and experience, it produces terrible results for the client. Here is our take on why this is so:
- RFI / RFP process are one-sided, and fail to provide the information that can be gained in a conversation. Many of these processes, in the effort of being fair to all vendors, are extremely inflexible in allowing the vendor to ask questions, ask for clarifications, and in general, get to better understand what the client really needs that leads the client to ask for an RFi / RFP in the first place. Because such questions are not answered, the responses to the RFI / RFP become generic, and hence shed little light on what each vendor could do to really resolve the client's pain-points.
- RFI / RFP processes are very much like standardized exams: they measure certain things very well, but completely fail to measure other, perhaps more important aspects of an organization. Thus, an RFI might be a great tool to understand if a vendor is large enough, is solid enough economically as an organization, has enough experience in a particular technical domain, etc. But they say little about a vendor's culture, communication abilities, commitment to a project and ability to go the extra mile, etc. --many of these factors often more critical than the "numbers" the RFP measures. Hence, RFI / RFPs often "self-select" vendors that are great "test takers" but might be a pain to work within the future. They also incentivize "sugar coating" of information to rank well on the RFP.
- RFI / RFP process try to fit al vendors into the same mold, thus preventing each vendor's unique abilities to shine. This does not permit the vendor to really understand the capabilities that make a certain vendor a better fit for an organization than another vendor, despite both potentially having the same size and price structure.
In the final analysis, a nearshore or offshore IT outsourcing relationship is usually a long-term commitment. Hence, it is especially critical to find the right match on your vendor-partner. To do this, RFI / RFPs can be helpful in the initial stages of narrowing down your potential vendors. However, after a first round of "scoring on paper" the most fundamental variables (company size, location, technical depth) we highly recommend moving to the next level of interaction: the conversation! Whether it be face to face in a company visit (highly recommended) or via teleconference, interacting with a company's project managers, technical team and business liaisons will provide invaluable and much more in-depth information about the type of partner that is being selected. We know this takes time and effort, and often even requires one to board a plane and visit the client, but much more is at stake if the "wrong" vendor is chosen because that vendor was able to misinterpret or stretch his company on paper.
About PSL: With more than 30 years of experience, PSL specializes in outsourcing and nearshoring software development projects as well as Team Augmentation. Based in Colombia, Mexico, and the US, PSL is an agile SCRUM development shop focused on high-quality services.