Top 10 Tips for Managing an RFP

They can be three sentences long or 300 pages. They can be broadcast across the supplier landscape or limited to a shortlist of preferred vendors. Some public companies and regulated utilities are required to make them public, but most companies prefer to issue them on the QT.

Regardless, most companies put out request for proposals (RFPs) when they're prepared to make major upgrades and spend some serious money. Like being executed at dawn, many RFP writers note that such documents also focus the mind wonderfully. In theory, RFPs help customers get exactly what they want and provide leverage when a vendor comes up short.

Done right, RFPs can also save storage customers gobs of money. (See RFP Saves AOL $25M.) But whether you're overhauling your data center or just looking to replace as much direct attached storage as you can, an RFP can also save time and headaches. So with all that in mind, here are some ways to further refine how you deal with prospective suppliers.

Know Exactly What You're Asking for

Even at the RFP design phase, users should not get too bogged down in technology, warns Rudy Rosefort, vice president of management information systems at the Empire State Development Corp. "There's no such thing as an IT project, there's only business projects with IT initiatives," he says. "You want to align your business with your IT before you even issue an RFP."Going head-first into an RFP without doing the homework is also recipe for disaster. "We try to do some research on what's out there and ask other people about what they are doing," says Jeff Johnson, network administrator at Irwindale, Calif.-based SCE Federal Credit Union.

Talking to other users can also help you work out your own needs, but IT managers may need to take this with a pinch of salt. (See Wanted: Trustworthy Test Data.) "I have definitely asked for references [from vendors] and talked to [their] customers, but that's a double-edged sword, because the vendor will not refer you to someone who will say something negative," says Johnson. Nonetheless, the exec admits that he still finds this process instructive.

The other thing to consider in the RFP process is whether the IT vendor can really deliver on the promises they make. "In my experience, delivery times are extremely important," says a procurement officer from a U.K. local government organization, who asked not to be named. "Its also important to make sure that a supplier really does have something in stock, when they say that they do."

Aim to Buy in Bulk

There are two schools of thought on bulk buying. One the one hand, the more projects you can combine in one RFP, the better chance you have of getting competitive bids. United Airlines, for example, is an advocate this approach, which the firm sees as a clear route to cost savings. (See SAN: 'It's More Than Speeds & Feeds'.)But bulk buying is no silver bullet, according to the Empire's Rosefort. "There are more cons than pros," he explains. "If you're buying in bulk, the chances are that you're buying more than you need, so you can't see the ROI as quickly," he adds.

Hardware, in particular, could prove problematic. "I would never tell someone to buy more hardware upfront," explains Rosefort, adding that new processors and hardware technologies are constantly being developed. "Why would you buy more than you need when you could be replacing it in two years with a more efficient device?"

Software, however, is an altogether different proposition. "It depends on how you carve up these contracts," adds Rosefort, explaining that a software vendor may offer free updates of as part of a bulk acquisition. "If they bundle that in and say that any new versions are included, then it's worth it."

Get the Right Internal Constituents Involved

In many organizations, getting different departments and end-users on the same page is easer said than done. (See RFP Saves AOL $25M.) When online book seller Alibris installed its first SAN, CTO Michael Schaffer says his RFP was as much about making sure everybody agreed on and understood the requirements as getting the best price."It was more about internally getting it straight," Schaffer says. "You want to make sure you're clear what your boss wants, or no matter how good it is, it's not going to be a success. An RFP can lead to a professional relationship compared to an ad hoc conversation."

Getting this sort of internal consensus has been problematic, admits SCE's Johnson, who quickly adds there's also been a lot of improvement in this area. "Now, when we're at the research phase, we try and get buy-in from the different departments and if we don't get that buy-in, we may not proceed with the project," he says.

According to Johnson, it is much easier and less expensive to pull the plug on an RFP at the research stage, than to press on without the support of the ultimate users. "It doesn't make sense to buy something that doesn't get used," he says.

Next Page: Get the Bean-Counters Involved

Get the Bean-Counters InvolvedThe finance department should be front and center in any successful RFP, and not just because they are the guys who hold the purse strings. Accountants can help keep projects on track and, crucially, within budget. But it may also be a good political move that makes or breaks the project.

They can also help get your RFP off the ground. Dan Pollack, operations architect at AOL underlined the importance of this strategy, noting that a firm's financial team can validate all the RFP's supposed cost savings. (See RFP Saves AOL $25M.)

"Always, always put someone from the business side on the committee when you issue an RFP," adds Rosefort. This person, he explains, serves as the liaison with the finance department, ensuring that both techies and number-crunchers have an open line of communication.

There's also a right and a wrong way to approach the finance department, according to Rich Taylor, senior systems programmer at Clark County in Nevada. (See Clark County, Nev..) "We try to avoid going to finance in emergency status and saying 'We need this today!' " he says, explaining that this only tends to antagonize.

Vet a Supplier List Before You Open for BiddingThis, according to Johnson, is absolutely critical if you want to get the most out of your RFP. "I like to do it as soon as possible -– I like to get as much information as I can and not jump into things," he says.

If firms fail to work out who is who in the market, says Johnson, then they run the risk of missing out on good technology. "You will get bids from the big companies, but there may be smaller companies out there that fit your need," he adds.

It may feel as if getting your new IT system deployed is the most important thing in the world, but patience is clearly a virtue when it comes to dealing with suppliers. CBS News, for example, waited almost four years after first putting the specs out for a new storage system, simply because suppliers were unable to come up with the goods. (See CBS News Ices Tape, and Olympian Thanks.)

Decide How Much You Will Buy From One Vendor

Putting all your eggs in one basket will certainly reduce the level of complexity in your data center, and could also streamline the acquisition process. But it may tie the future of your business to a single supplier."Always do multiple vendors," advises Rosefort. "Multiple vendors can provide you with a multitude of services and you can also juxtapose them and see which is better."

Relying on a single vendor, according to the exec, seriously limits your technology options and increases the chances you'll experience the pitfalls of lock-in. "If it's a storage solution you're buying and you're only dealing with EMC, they are only going to provide you with EMC solutions, they are not going to provide you with NetApp, or anyone else's," he says.

Having enough resources to scope out multiple vendors, however, is an impossibility for many IT managers. "We work with the [vendors] that we know," explains Clark County's Taylor. "It makes our life easier, because we don't have the staffing to have one person just look at [different] technologies," he says.

Earlier this year, GM CIO Ralph Szygenda became the poster boy for what is known as "multi-sourcing," essentially splitting a firm's IT infrastructure amongst multiple suppliers. (See GM Goes for New Outsourcing Model.) GM's ambitious $15 billion, five-year IT outsourcing plan relies on six big name vendor's, including rivals IBM and HP. (See GM's Eggs, IBM Picks Up $500M GM Deal, and HP Grabs $700M of GM Biz.)And while Szygenda may be reluctant to discuss it, others like AOL's Dan Pollack are quite unapologetic in pitting vendors against one another to get the best deal or the lowest price.

Are You Willing to Work With Startups?You may need to weigh the importance of your IT project against the potential financial benefits of shunning a big name vendor. (See Joyce Meyer Ministries.) "It depends on the scope of the project and how vital it is [to us], but we have worked with smaller companies," says Johnson.

The main points against working with a startup are typically support issues and concern about their financial stability. "We're still not comfortable with startups -- we need a good product from a proven supplier that will give us the support we need," says Taylor.

These concerns, however, are often offset by a startup's desire to survive in a crowded marketplace, which can manifest itself into high levels of support and competitive deals.

Another potential benefit of choosing a startup over an established vendor is agility. Typically, smaller firms can often work new features into their roadmaps much quicker than their larger counterparts. (See Users Leverage Vendors .) Such early innovation has an obvious flow-through effect to the customer, who typically wants to use every tool at his disposal to differentiate his company from his competitor's.

"We have been looking at startups to solve some of the problems that the larger guys haven't got on their 'to do' lists yet," says AOL's Pollack, adding that startups are particularly useful in areas such as virtualization and clustering.Next Page: Use Your Lab

Use Your Lab

Getting suppliers' kit into your own testing environment can help separate the vendor wheat from the chaff, but it can be time-consuming. "We try to do it, but we don't always have the time or the resources," says Johnson. "Usually, we set up a test environment and that gets rolled up into production."

In-house labs, however, can definitely take the pain out of an RFP. An international hospitality company recently used its own lab to cost-justify a massive, multisite deployment of WAN optimization and wide-area file services (WAFS). (See Justification Exercise, and Sun Opens Tape Again.)

"We have a permanent storage qualification lab," says Pollack, adding that this is essentially a scaled-down mockup of the firm's production systems. The lab, he explains, has been particularly useful for examining the "quirks" of virtualization software. "Deploying them in full-scale production, without knowing how they operate, would be a bad idea."Outline the Fine Points

It goes without saying that you should ask for warranty and licensing details, and work out the exact cost of services, and what the after-sales support will entail. But it's still relatively common for firms to leave technology gaps within their RFPs, even when it comes to something as critical as data center power systems.

"We see glaring errors in RFPs," says Craig Broadbent, service sales engineer at Hawthorne, New Jersey-based Datatec, a data center equipment supplier. "They will overlook something like [ongoing] UPS battery maintenance -– things like that can drive the costs up."

Another key factor to consider is whether services can be performed locally to your data center. If you are based in a major city such as New York or San Francisco, chances are that support will not be an issue, although it could be a different story in more remote locations. Even in Las Vegas, which is one of the fastest growing cities in the U.S., some users have already voiced their concern about the issue of vendor support. (See Clark County, Nev.)

But AOL's Pollack urges users to build some leeway into their RFPs, so that both the customer and the vendor have room to maneuver. "There's lot of room for interpretation and we don't hold them to strict proposals based on strict solutions," he says.That said, Pollack also warns users to set careful guidelines in areas such as pricing. "As an example, a vendor could triple the total capacity of storage supplied to get to the price per gig that you want."

Pick Your Spokesman

Finding the right project manager to push your RFP forward may be easier said than done, according to Rosefort. "Obviously, you need someone with experience of preparing RFPs, who knows what to look for," he says. "They need experience of where IT can fit in and what services are needed to provide this."

But this type of person doesn't grow on tress. "These are major projects that we're talking about here," explains Rosefort. "If someone has managed to accomplish all the elements of an IT project, their company is unlikely to let them go."

Just to complicate matters, the project manager will also need a strong set of negotiating skills, and must be capable of playing hard-ball with a number of vendors. (See Government Contracts Tempt Suppliers.)Clark County's Taylor agrees that it is difficult to find this level of expertise, although his organization typically brings in outside consultants to manage large projects. But this approach also has its drawbacks. "The problem with using outside consultants is that the expertise leaves at the end of the project," he explains.

— James Rogers, Senior Editor, Byte and Switch