Financial Services RFP Consultants
| Client Industry: | Professional Services |
|---|---|
| Purchase Category: | Financial Services |
| Client Website: | http://www.thomasmurray.com/ |
Challenge
When it launched in 1994, Thomas Murray's main business was helping investors to evaluate, select and appoint global custodian banks. These evaluations were conducted as RFP - Request for Proposal - projects.
Simon Thomas, founder and CEO of Thomas Murray, describes this approach:
Subject to knowing what questions to ask, we have found closed-question RFPs to be the best way to evaluate and select a supplier of a complex product or service, and, subsequently, to be in the best position to negotiate. However, the administrative burden of running RFPs is considerable. Badly managed, they increase costs to the client, reduce the accuracy and value of the analysis, and alienate the bidders
Thomas Murray has always used the best technology available to improve the efficiency of its RFP projects.
When we started Thomas Murray, the industry was using hard copy documents, and employing legions of typists. We began by issuing RFPs as spreadsheet documents on floppy discs, which seemed very sophisticated at the time, and then adopted email as it became widespread.
The quality of Thomas Murray's analysis soon made them market leader in Europe, and the volume of RFPs grew. Spreadsheets and email were an improvement on hard copy documents, but when it came to applying consistent scoring policies, consolidating responses and scores to previous RFPs, and reporting across projects, the shortcomings of this technology became apparent. So, in March 2001, Thomas Murray adopted the first version of PostRFP's web based RFP management software.
We were struggling to cope with the volume of data we were collecting from the banks. Not only that, but the banks were complaining about the time it was taking them to copy and paste often identical answers to the same questions. The process inefficiencies inherent in using email and spreadsheets were pretty obvious, as were the potential benefits of adopting a web based system
Solution
Thomas Murray was managing 100-200 RFPs per year, each one consisting of over 600 questions. Two main families of questionnaire templates were in use, one for the institutional investors in the global custody sector, and one for domestic custodians.
We were initially a little nervous about migrating to a whole new system but in fact the process went smoothly. PostRFP's team helped us to import the old questionnaires into the new system in a day or two. The suppliers were initially wary, and, being banks they scrutinised the security aspects very thoroughly. But they soon embraced the new system when they realised how much time they could save using the functions to import answers from previous projects
Five years on, what difference has PostRFP made to Thomas Murray?
I would categorise the benefits PostRFP has brought into two groups. Firstly, there are the obvious productivity gains. Secondly, there are the new opportunities presented by effective data warehousing.
Productivity
In the past, each client engagement began from scratch. We had to read and analyse every line of every bank's response, even when we knew it was going to be 95% identical to their last response" explains Thomas, "PostRFP has enabled us to move to an exception processing model, with huge productivity gains.
PostRFP enables respondents to import answers from their response to previous RFP. The system highlights changes to answers. In the background, scores to unchanged answers are copied across at the same time and can amended as required.
Thomas describes the impact of this feature:
This means that our analysts, rather than reading 500 pages of answers from each supplier, now only analyse changed answers - they are processing the delta, not a complete data set. The time savings are significant. A 10 respondent RFP can be scored in 2-3 man days, rather than 2-3 man weeks.
New Opportunities
In addition to the productivity gains, PostRFP delivered more subtle benefits.
From the outset, we knew it was going to be difficult to grow as a specialist consulting firm. The bottleneck for consultants is in recruiting staff who have both custody industry expertise and consulting skills. Our strategy was to diversify by moving away from classic consulting into industry ratings which can be used by groups which simply want to maintain running surveillance on their banks rather than launch a full RFP.
The strategic benefit of adopting PostRFP was that Thomas Murray was able to establish a database of searchable, reportable, information and analysis about Suppliers. This has helped Thomas Murray to fulfill its strategic objectives.
Having a universe of comparative analysis enabled us to determine the range (i.e. normal distribution curve) between good and bad banks. This has allowed us to establish an absolute ratings scale which is used in our analysis. A standard scale from CCC to AAA is used to denote the ratings. A public rating can be commissioned by a supplier (bank) who wishes to benchmark themselves against Thomas Murray's absolute ratings scale. When this happens a rating specific RFP is submitted for preliminary analysis prior to due diligence.
When we rate a bank, we are comparing a set of answers to questions. We know what answers represent best market practice , denoted by a AAA. It is therefore possible to rate just one one custodian respondent.
Producing ratings has enabled Thomas Murray to grow and diversify its business. The ratings services has changed the perception of Thomas Murray in the industry. We are now seen as the authoritative research and information provider in the sector. This is enabling us to expand into the Americas and Asia Pacific.
Does PostRFP continue to feature in Thomas Murray's plans?
Yes. The latest version of PostRFP has features that directly affect our plans. Internationalisation and the multi-tenancy hosting are key elements as we expand into other countries to translate and manage our RFPs.