Monday, 13th July 2020

IT RFPs undermine CIO innovation

KCOM’s analysis of IT RFPs has found that the success of enterprise IT projects is being thwarted by a procurement process that is no longer fit for purpose.

KCOM has warned that the enterprise IT Request for Proposal (RFP) process requires urgent review if it is to enable organisations to use technology to meet business challenges effectively. Its analysis shows today’s RFPs are overly IT-focused, neglect wider business goals, stifle partner innovation and fail to guard against the future.
KCOM carried out a detailed examination of RFPs it received in 2016 and 2017 for strategic IT projects in order to determine the degree to which they encouraged innovation, established a platform for future technology developments and supported overall business goals such as improved customer experience.
Key findings:
  • Just 14% of RFPs showed any evidence of collaboration between IT and the wider organisation in their construction
  • With few RFPs allowing suppliers to suggest innovative solutions to enterprises’ challenges, and even fewer permitting a strategic partnership, it appears that just 18% of enterprise IT RFPs are truly seeking innovation
  • Only 30% of RFPs for consumer-focused projects required measurement of how the IT project would improve the customer experience, with the remainder focusing on IT metrics instead
  • While three-quarters of the RFPs examined had inherently future-looking objectives, more than half of them failed to ask vendors how they would ensure their proposal was future-proof
KCOM’s analysis, based on detailed examination of RFPs it received in 2016 and 2017 for strategic IT projects, revealed that the overwhelming majority of RFPs were developed in ‘IT isolation’, with measures of success being IT-focused rather than focused on broader business or customer outcomes – even where project objectives were specifically to improve customer experience or improve service delivery.
This combined with a common failure to encourage technology providers to propose solutions that are innovative and future-proofed, has led KCOM to conclude that the traditional approach to enterprise technology projects needs an overhaul.
“Clearly, the current enterprise IT RFP process is not fit for purpose,” commented Stephen Long, EVP at KCOM. “When we talk to CIOs and others in similar roles, it’s obvious that modern strategic thinking is there, but it is constrained by antiquated processes such as the RFP, which has barely evolved in decades. Business strategies that focus on collaboration, customer centricity and future proofing are remarkably rare in a typical RFP. The process is too rigid, restrictive and defensive for business ambitions to be reflected, or for the supplier to act as an innovative partner, jeopardising the ultimate success and commercial benefit of the project.
“For many industries, customer experience is one of the last differentiators available to them, so enterprises can ill afford to limit the potential of technology projects intended to enhance this service delivery,” Long added.
“Realistically, the IT RFP process is unlikely to be replaced wholesale. But it can be improved,” concluded Long. “Over-specifying technical requirements, restricting dialogue with prospective partners and an over-reliance on a scorecard procurement process all create excessive focus on the IT elements of a project and restricts potential respondents from demonstrating innovation and thought leadership. Ultimately this hinders future business performance and results in missed opportunities to deliver better outcomes from the same investment.”

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