Exploring Outsourcing: Managing RFP Responses
by Kurt Jensen

In the last two articles, we reviewed the basics of outsourcing and began to take a high level look at one methodical approach to evaluating outsourcing providers: the Request for Proposal (RFP). This article begins to address the process for handling responses to RFPs. Before jumping to that topic, however, we want to quickly cover some key, up-front factors for ensuring a successful RFP process.

Hierarchal consensus – High level buy-in is important if for nothing else than to maintain control of the process. If senior management doesn't delegate decision making authority to the team, agressive respondents will jeopardize the process by escalating to senior management (when they don't make the final cut due to price) claiming "your evaluation team is not on track and your business is at risk." This hardball tactic puts the respondent in control of the process and eventually the decision.

Cross functional consensus or notification – Sales, Marketing, Product Management and similar teams need to be aware (at a minimum) and, preferably, engaged. This engagement will help prevent favorable treatment of potential trade partners, information leaks and influence complicating the process.

Service and quality definitions – As defined in the first article, outsourcing is essentially paying someone else to do a job. Measuring against your definition of service level and quality is the only way to determine if you are getting your money's worth.

INCOMING RESPONSES

With the RFP sent to a significant number of respondents (who signed and returned the previously sent Non-Disclosure Agreement) and the deadline to respond still weeks away, you start to notice an increase in the number of phone calls, emails and voicemails containing questions posed by potential respondents. The flood is just starting and is still manageable!

Pre-Response Questions
One technique to manage pre-response questions is to remove respondent specific information, roll the question into a matrix (think Excel), and send out the answer to all potential respondents. Taking this approach keeps your answers consistent and eliminates answering the same question multiple times. Resist the temptation to engage in detailed one on one discussion with potential respondents.

Deadline Decisions
As the deadline approaches, prepare to make decisions regarding extensions, content, delivery or both. If at all possible, try to maintain a consistent stance since a significant portion of the respondents will quickly take any time past deadline you allow. Depending upon the size of your company, expect extension pressures internally as respondents reach out to their trade partners.

Deadline Day
Although experience varies, expect the bulk of responses on the deadline day in accordance with the delivery requirements contained within the RFP. In this 'flash flood' stage, the results of your RFP will be apparent: you will be either spending time excitedly reviewing easy to read data points or looking at a big stack of documents and a new box of highlighters! Expect early 'confirmation of receipt' calls from respondents; after all, they spent considerable time preparing their proposal and want to make sure you received it in time. Resist providing feedback if you have any.

In the next article we will discuss wading through the flood of responses, otherwise known as comparing respondents through normalization. We will address how to reach a key decision point: which respondents are worthy of further consideration.

Contact us if you would like to share outsourcing or RFP experience. If you are thinking about outsourcing, we can help you manage the process, while you focus on your business!

View previous articles in this series

Service Management and IT Audits
by Amy Lozano

This is the second article in a series about systems auditing. In the first article, we introduced one type of audit: the SAS 70 audit. In this article, we discuss the role of IT/Systems audits, such as SAS 70 and Sarbanes-Oxley/COSO related systems audits, within "service management," as opposed to IT management.

You may be wondering how exactly IT/Systems Audits relate to service management, especially if service management is more about business processes than particular technology or systems. The answer is that third party auditors spend just as much of their time examining business processes that directly impact external customers as they do on technical processes and systems.

Let's examine just one area of Service Management: relationship management. In simple terms, this means staying in touch with customers and making sure their needs, current and future, are being met. Examples of what an auditor reviewing a company's relationship management would expect to find are:

• Company consistently meets with customers
   
• Company is aware of all customer-impacting issues
   
• Company provides broad, comprehensive, yet secure, access to customer information and issues
   
• Customer information is available redundantly (backup/restore capability)

In all audits, proof is required! The auditors will not just take your word for it that this happens. They will ask to see such things as:

• Minutes of meetings conducted with customers, as well as internal meetings held to discuss major customer issues. An example of this second kind of meeting would be a daily "hot issues" meeting held every morning to review critical customer problems. Auditors will expect minutes to identify actions and accountability for addressing issues.
   
  • The auditors will pick the dates of past meetings for which they want to see meeting minutes.
     
  • If there are no minutes, the auditors may very well ask to sit in on a meeting to verify that meetings do occur, and THEY will pick which meetings to attend. Believe me this "observational" method of auditing is the most painful!
     
• An open issues list in the form of a document or database (this could be help desk system tickets). The auditors will not be happy if this list or database is kept only on an individual desktop computer - and you want the auditors to be happy!
   
• Security methods in place to limit access to documentation, database entries, and/or help desk tickets related to customer issues to only the staff who need to see them. One or more auditors will actually sit next to you and watch how security has been implemented.
   
• Backup strategy in place for all of this information. This will include evidence of offsite storage of tape backups. Believe it or not, an auditor may watch the vendor representative pick up the tapes and verify that there is documented proof of these kinds of transactions.

Did reading the above make you tired, nauseous, or nervous? Now is the time to beat any outside auditors to the punch by taking the initiative to review if:

• Consistent business processes have been established. (I am sure this is not an issue for any of you.)
   
• Business processes that are assumed to be in place are actually in place.
   
• That processes fall into the realm of industry "best practices."
   
• The processes are documented for staff training and archival purposes.
   
• That results, actions, and issues are consistently documented and reviewed.

This examination of relationship management, just one, small aspect of Service Management, is intended simply to illustrate the role service delivery plays in systems audits and how seriously these audits should be taken by service management professionals, not just IT professionals. If auditing still bores you and seems irrelevant to customer service management, get over it because most likely outside auditors will be coming to visit whether you like it or not! And we have just talked about one small aspect of Service Delivery…