Why Your IT Outsourcing RFP Is Holding You Back

16.06.2012

The kind of handshake agreement created by the RFS process actually encourages the parties to work out ambiguities early on and also leaves room for flexibility as the business and IT environment inevitably changes, says Young. But it requires a leap of faith. Client and provider must communicate, collaborate, and be transparent. "The client has to trust the provider to deliver on requirements rather than micro-manage pricing and service delivery," says Young. They also have to be willing to change their own processes and deal with internal constraints and complexities in order to drive the desired end state.

An RFS approach requires the provider to shake up their traditional sales approach as well. Some of the big players who are doing just fine with the RFP-led process won't go for it, says Young. But othersÂ?particularly tier-two, offshore providers, and business consulting-focused providersÂ?welcome the opportunity. An outsourcing provider can spend two or three million on a proposal for a $100 million-plus deal and wind up winning the business less than half the time. The RFS has a lower cost of entry. "It gives them at least one swing at the deal," Young says.

For customers trying an RFS for the first time, Young advises they start small. Pick a project where there's a lack of consensus about to doÂ?one faction arguing for offshoring, another for a cloud solution, and yet another for a re-engineering effort. And RFP process can bring those options to life. "The RFS can bring clarity and the credibility of the commercial markets to help focus the point of view internally on the proper direction to take," says Young.

Stephanie Overby is regular contributor to CIO.com's IT Outsourcing section. Follow everything from CIO.com on Twitter @CIOonline, on Facebook, and on Google +.

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