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Assessing vendors' commitment to business in an RFP

You are committed to your business. Is your vendor?

Large scale RFP projects are concerned with finding a strategic partner - not just a one-off product or service. A thorough RFP process should assess the vendor's commitment to the product line or service that is being procured. Vendor selection for a complex service is a demanding, time-consuming and expensive exercise. Adopting a new service or product is often even more difficult. It's not surprising that relationships with vendors often stay in place for decades. 

Given the difficulty and cost associated with switching it is essential that the vendor's commitment to the service being procured is absolute. If a vendor's entire business is predicated on the service under consideration, then it's reasonable to assume that they are fully committed. More difficult is the case where a vendor provides a range of products and services and just one of them is addressed by the RFP.

Consultants using PostRFP for an RFP will often include a section of the questionnaire dedicated to "Commitment to Business". This will verify that the vendor plans to deliver the service under consideration for at least long enough to ensure a return on the investment of switching providers. Of course vendors will generally claim to be fully committed. The staff members responding to the RFP are likely to be deeply involved in that service so will themselves be committed. But the company leadership may not be of the same view. Therefore the RFP should attempt to divine the longer term strategic priorities of the vendor by asking questions such as:

  • Headcount. What is the growth in staff numbers over the last 5 years in the provision of the service?
  • Budget. What budget has been allocated for the provision of the service over the last 5 years?
  • Revenue derived from the service
  • Training. What training is provided to staff directly related to the service. What provision for training is made for coming years?
  • Strategy. How does the vendor view this service in the context of the wider business? Are new business directions complementary to the service?

Some of this information will be verifiable via public sources - e.g. published company accounts showing expenditure or budget by department. Other aspects will need to fall out into the contract so that the vendor is liable for compensation if they fail to meet their stated commitments.