Everyone who has come into contact with SAP knows that it is a world full of acronyms. RFP is just one of an extensive list that we come across however, not everyone is fully familiar with the RFP process and the level of detail that is involved. With this in mind I tracked down two senior SAP Programme Managers to help me unlock its mystery and understand why it is so important for organisations to get it right.
“I have seen too many companies get this wrong in my time. Its effects are not only monetary, but its legacy leaves a negative impact for future SAP programmes.” Snr SAP Programme Manager 2015
Request for Proposal
When large organisations agree to undertake Capital Expenditure on projects and programmes, a strictly regulated procurement process is triggered. Depending on the programme size and complexity, a variety of channels are available to get the delivery of ‘goods and services’ approved.
For example, for a proposed budget of £15 million, a full and extensive RFP is required. When lower risk and smaller projects are concerned a ‘request for resources’ may be employed to seek quicker approval and help get consultants on the ground.
In complex, challenging and highly political scenarios a thorough due diligence process must be adhered to. A great example of this would be a Greenfield (no current SAP system) implementation where there are no existing relationships with the business and their potential SAP vendors.
The amount of time a business has before it begins the Programme will affect the scale of the proposals and response time from the vendors. This process can easily take 6 months or longer so time can be an important factor that determines what the RFP looks like.
Once the programme deliverables have been detailed and approved by the key stakeholders in the business (Head of Projects and Programmes, Procurement, C-Level Board Members (CIO)), a carefully selected group of vendors (most likely with an existing or previous relationship) will be invited to meet with the business. This initial visit and introduction to the programme outlines the brief and provides all vendors with the same information including plans for delivery.
Ahead of the proposal, each vendor usually has a ½ day workshop with the business to gather further information about the programme. In an accelerated RFP process, where the business is aware of past performance from a past relationship, this period can be reduced to 4 weeks.
Then, each vendor will tender for the delivery of the programme. The presentation is generally being conducted by the senior management team (Partners) who, if selected, will be overseeing the implementation. This is the opportunity for each vendor to bring forward different contractual mechanisms (Fixed Price / Time & Material) and be imaginative in their approach.
Programme leaders, sponsors, commercial procurement and other senior stakeholders are involved in the selection process. Each organisation has a different set of criteria in which sourcing and weighting mechanisms are employed to select the winner.
Here are 7 indicators used in a recent multi-million pound programme delivered by an SAP Enterprise:
The type of business and the importance of each criteria will affect the weighting of each score. When dealing with the Tier 1 Partners, the approach and experience will be relatively similar and the highest weighting may come down to the Programme Boards’ ‘gut feel’ of who they think will be best for the business.
Once selected, a detailed negotiation process is engaged (sometimes it can be quite prolonged) with a list of dependencies which, when defined, can prove that services have not been delivered and the contract has been broken.
A list from both sides can include agreements on:
It is imperative for all businesses to be represented by key leaders with previous delivery experience and the best interest of the business in mind in every step of the process. Without the key leadership, a diligent selection process isn’t worth the signatures on the £50 million contract.
Max Fronicke is a Senior Consultant specialising in the recruitment of SAP Professionals. If you would like to get in touch, please contact Max on firstname.lastname@example.org.