Changing Face of RFPs: Win-Win for CIOs & Vendors

From only L1, RFPs have moved to L1+T1 as the selection criteria. This has resulted in benefits for both the CIO and the vendor

The traditional Request for Proposal (RFP) process adopted by CIOs is undergoing a radical shift. Traditionally, an RFP, a document posted by a company to invite bids from potential IT vendors for providing a service or product, accorded maximum importance to commercial aspects. However, in the present times where IT is undeniably a game changer and downtime could spell nemesis for a company, CIOs are attaching importance to technical aspects also.

“In the past, RFPs looked at technical parameters only as a threshold and once a vendor crossed this threshold, the L1 route was followed with the contract given to the lowest bid. This resulted in products being bought in silos without due consideration to superior technological value that could in turn help businesses achieve some of the better benefits from IT. The scenario, however, is fast changing,” says Gaurav Sharma
Research Manager, Enterprise Computing, IDC India

“Today, if a CIO has to invest in a Rs. 1000 crore project, he cannot take only the L1 aspect into consideration. He has to look at other parameters such as future proof architecture, scalability, ease of use, interoperability, roadmap, services and innovation to name a few. For instance, a vendor could be providing superior technology that can help save the organization extra cost or can be leveraged by a CIO to add more value,” adds Sharma.

He further shares that, “One can witness a paradigm shift in the mindset of a CIO as he is looking at both technical and commercial aspects now rather than just weighing the commercial aspects. A part of evaluation is attributed to the technical and services solution and the other part towards commercial one. A combination of these two results in a well qualified vendor who is technically superior as well as provides benefits of lowest cost for that value,” says Sharma.

“In more mature markets such as the US and Europe, this shift is more evident as compared to India where this model is prevalent for mostly large projects, as of today” he says.

With the face of the RFPs changing, how are the CIOs and vendors impacted?

“It is a win-win situation for both the CIO and the vendor if executed impartially. A CIO can get the best of technology at optimum cost and the vendors can benefit too as the user is willing to pay premium for enhanced technological value,” adds Sharma.

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