When system selection teams start looking for a core system, they often fear they will select the wrong solution and cost the company lots of money with little payback. The team may be enchanted by a vendor’s marketing skills and miss key information. To compensate, the selection team may hold back specific requirements from vendors, believing that keeping the vendor more in the dark will make the vendor more truthful. In fact, this practice makes it harder for the vendor to effectively describe and differentiate their solution. It also makes it more difficult for the selection team to understand how the vendor’s solution meets their needs. Giving vendors a detailed description of the business or IT problem to be solved (and relying on other best practices to sniff out vendor puffery) can greatly increase understanding of potential solutions.
How does this work exactly? Follow these three principles to write an effective RFP.
1. Describe your initiative in detail.
Instead of simply stating that you need a policy administration system for life insurance products, give the vendor details. Tell potential suppliers the details they need to craft a solution, such as:
1. Key functionality the solution is expected to cover, such as electronic forms, interactions with the licensing system, new business compliance, and call center support
2. Long term goals for future products or new innovative functionality
3. Challenges with existing systems, such as poor speed to market or legacy issues
4. Top system characteristics including speed to market requirements, access to data needs, or business rules engine
Proactively providing detail about the business initiative gives vendors the opportunity to remove themselves from the process if their system is not a good fit and frees up additional time to evaluate other solutions more thoroughly.
2. Be specific about requirements.
Ask questions that define the detail, such as, “How are new application forms added to the system for each state,” rather than “How are new forms added?” Granular requirements are more likely to generate a detailed solution that shows exactly how the business need is fulfilled.
3. Ask open-ended questions.
How a business goal is accomplished is at least as important as the accomplishment itself. Therefore, instead of asking a vendor if their system can handle variable subaccounts, ask how variable subaccounts are handled. The vendor’s explanation of the underlying process gives them the opportunity to explain their solution greater detail and to differentiate themselves from competitors.
Of course, the vendor will absolutely put their best foot forward when crafting their proposal and may include some puffery in their response. The selection team must verify and validate the information in the vendor response to distinguish between actual and aspirational capabilities. Vendor demonstrations, conversations with references, system reviews, and proofs of concept will allow the team to assess and revise vendor scores to make sure strengths and weaknesses of the platform are understood.
The system selection process is often complicated when the selection team fails to provide adequate information to the vendor. By providing details about the business issue, specific requirements from a solution and asking open ended questions, the selection team is more likely to receive specific solutions and to understand how they fulfill the business need.