Don't Wing IT When You Can RFP IT

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Don't Wing IT When You Can RFP IT

By Toby Malbec - 06/06/2018

With the widespread acceptance of cloud-based technologies as not only viable but the future of the restaurant technology landscape, operators finally have a legitimate reason to replace their legacy POS and back-of-house systems that they have steadfastly held on to for way too long. The Smithsonian is on line 2; they'd like you to donate your systems for their upcoming exhibit on the history of restaurant POS systems! 

So, now the big step: how to select a new "core" restaurant system? Far too often, the answer is to either make the decision based on a one-off demo or to go to a conference or trade-show and visit the supplier booths.

Are these bad ideas?
No, but these should be the appetizer and not the main meal.While these approaches will give you a flavor of what the vendor is all about and a general idea of the capabilities of the product and the company, they are often too skewed in the favor of the vendor. As you would expect, the vendor will accentuate the most positive aspects of their solution, highlight the "cool" stuff, but is unlikely to hit on all the key features your business will need because in all fairness they don't know your specific business. In these presentations, it is nearly impossible to evaluate multiple presentations fairly and objectively because they will vary significantly in content, presentation, and perhaps even audience. 

So what's the solution? RFP it.

Now, for some reason, RFPs recently have been getting a bumb rap; many complaints around them include:

1.  We are in a hurry - we don't have time to go through that lengthy a process

2.  There's no need - let's just look at what our competitors are doing and follow suit

3.  We have a relationship with our current vendor - let's just upgrade to their latest offering

4.  The process is too long, will cost too much money and in the end won't give us anything we don't already know

5.  That's what I have my IT staff for - to choose our systems for us

 

OK - so let's address some of these complaints.

We are in a hurry - we don't have time to go through that lengthy a process
This is the most common complaint. The notion is that by building a group of people to "ideate," define current and future needs, and document the needs in a formal document will add too much time to a decision that can be made much quicker. From my 25+ years of experience in the business and having managed RFPs for that long, I can safely tell you that the opposite is actually true.

RFPs will lead an operator to a decisive and defensible answer significantly faster than a free-form approach. By engaging key resources within the organization - especially when in a heavily franchised environment - what you are doing is leveraging the strength within your organization and creating legitimacy for the process. Decisions made without a solid repeatable process by only a handful of decision-makers will run into headwinds when deployed or when the first sign of issues emerge.  

It is true that it takes some skill to manage the process, and anytime you collect a group of strongly opinionated people there will be some push-back and conflict, but the outcome once navigated will pay dividends. Dissenters will become evangelists, and the process along with the subsequent deployment will go smoother even if issues arise since the key people in the organization will have been on the journey and recognized the time, dedication, diligence, and hard work that went into the decision. 

There's no need - let's just look at what our competitors are doing and follow suit
Just because a system appears to work well for a restaurant brand you admire or compete with (perhaps both!) doesn't mean it will work as well for you. The industry is plagued by a "me too" mentality which is often perpetuated by the realities of tight profit margins and the fickle nature of the customers we serve. The notion of faster and cheaper often outweigh what is perceived as an onerous approach by going through a formal bid process. 

Every operator needs to look at technology through their own lens, and not that of their competitors. Do you view technology as a necessary evil, and therefore a commodity, or can it provide so much value that it could distinguish you? Does your organization value disruption and risk? Are you more conservative? Do you have or wish to attract franchisees with your technology? Do you offer delivery, online ordering, catering, off-site sales? Are there aspirations of international expansion? These are just a few of the aspects that affect how an RFP is crafted, and which vendors are selected to respond to it. Every organization has its own culture, its own DNA. To simply say that you will be successful using the same tools as another sells your culture and uniqueness short.

We have a relationship with our current vendor - let's just upgrade to their latest offering
As the incumbent, your current vendor should have an inside track by definition on a formal RFP process anyway, but why hand them the business before looking to see how the industry has evolved and what else is out there? If your relationship is strong, this will obviously put them in good favor from the outset and if all things are considered close to equal at the end of the process, then by all means stay in the same camp. So would this have been considered a waste of time and money? Absolutely not! The nature of the restaurant technology marketplace is one where innovations do happen - not as fast as many of us believe they should - but they do! 

A well run and managed RFP process would allow the team to review other solutions out there against the company you have great familiarity with. The requirements would include not only those features that you currently have and covet, but those that are going to allow the organization to move to the next level, whether that be through improved integration, better analytics and reporting, or key features. Remember, the formal process is designed not only to normalize the review and assessment of solutions but also to create a good story that other stakeholders in the organization can review and understand. This is especially important in a franchised environment where opinions can vary.

The process is too long, will cost too much money and in the end won't give us anything we don't already know

Au contraire!  This process is a fabulous way to empower key members of the organization and give them a wide-eyed view of the technology landscape. I can tell you from experience that operators who are vocal about the "lousy technology" and the inablities of IT to deliver a solid solution develop a profound appreciation for the complexities and challenges after being immersed in this process. This does not mean that IT can "wash their hands" of the decision but rather they can develop a stronger bond with their customer - the operators. 

 A well-run RFP process can be normally completed (inception to contract phase) in less than three months. It is an intensive three-month process requiring commitment and heavy involvement from the task force, but it is commonly completed within this time frame. Additionally, the fact that the vendors are aware of the structure of the process and their commitment to the it will mean that you will have better visibility into all the costs associated with each solution and can compare them side-by-side as part of the process.

 Pricing is normalized at every level: hardware, software, training, services, and support. All costs for five-to-seven years are evaluated to calculate the Total Cost of Ownership (TCO) and the group weighs these costs against the functional strengths of each solution, Also added to the equation are some softer evaluations: do we like the vendor? Do they seem trustworthy? Have they delivered in the past for their other customers? Are they going the same direction we are? Can we consider them a partner in our future success? These are key determinants in feeling good about the ultimate decision. An interesting note to share; more often than not, it isn't the cheapest solution that wins the bid; it's the best fit.

That's what I have my IT staff for - to choose our systems for us
To expect your internal IT staff to have intimate knowledge of every key system and its strengths and weaknesses is like asking a doctor to be able to cure any ailment. It is practically impossible. In most organizations, the IT staff is heavily immersed in the tactical day-to-day operations of the organization, ensuring that the network is stable, software releases and patches are applied, user e-mail accounts can be accessed, printers actually print, and that the normal operations run as expected. Management tends to underestimate the maintenance aspect of the business. As such, the amount of time that the average IT staff can spend on strategic initiatives such as looking at the happenings in the vendor marketplace and providing that value back to the brand is nominal. 

To address this, the industry does provide many valuable conferences and trade shows to assist IT with this, but again these are opportunities to start the conversation and not places where deals should be done. Savvy IT managers who develop a short-list of vendors to meet during these gatherings are smart to do so, but this should be the prelude to a formal vetting process and not a substitute to one.

 The other point to make is that a formal RFP process is normally managed by a key resource in the IT group, with strong presence and influence from all other key areas of the organization. Why ask the IT group who probably have limited exposure to all the key aspects of the business to make a decision of this importance and magnitude without heavy input from the key stakeholders? This interaction gains acceptance, buy-in, and ensures that the solution will check most if not all the boxes when you reach the finish line.

Properly conducted, an RFP is part science, part art, and completely inclusive, It will bring together your organization, foster teamwork, and ultimately lead to technology success. Don't run from it - embrace IT!

 

Toby Malbec is the principal at TWM Insight LLC

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