This is a follow-up to my recent post about The challenge of selling brainspace, and the general unwillingness for people to pay for the intangibles of ideas, insights, designs planning and perspective.
Here is a very real example, familiar to many of us who have written or responded to a tender (or Request for Proposal/Pitch RFP to Invitation to Quote ITQ)*.
A typical IT project tender is a request for proposal/quotation to design and build some sort of system which is a mixture of hardware, software, systems integration and process integration. Even a straightforward web application (like online sales fulfilment) crosses all these areas. Such systems are by this nature complex, with long term and potentially deep implications for the client.
Surprisingly, the typical borderline-unreasonable requests in such a tender seem to actively work against getting the most appropriate and cost-effective outcome for the client:
- Designs required up front – whether this is strategic or systemic. How can anyone worth their mettle design anything with the sketchy information typical in such proposals? And having not met the client, nor understood the real needs thereof? What will be the end quality or appropriateness of such a design?
- Fixed quote required – with minimal information, no scope, and no design, there is no way a real quote can be generated. So the client typically ends up with a grossly-padded out figure.
- Short timelines – the crowning glory is often a ridiculously short timeline. Imagine being asked to design Amazon.com in two weeks, with minimum information, and without any guarantees of being paid. What is the quality of work that can be expected?
- How often does the project scope change radically after commencement? And at what cost to morale and the bottom line?
As a good friend of mine (you know who you are) would say: “this is so totally f*cked.” This has to be a form of deliberate self-sabotage on the part of the client. There is an incredible waste of resources and effort in this process for all. Just what are the possible psychological factors at work here?
There could be any number of reasons why this is the case:
- The people writing the tenders have an inadequate understanding of the complexities and implications of their projects.
- They are unable or unwilling to see and involve the larger picture.
They already have a respondent in mind and the tendering process is really only to satisfy policy or legal requirements.
- They are shopping for the cheapest respondent, even though (especially when?) they make a point of saying this is not the case.
- They just want a simplistic solution with a simplistic price so as to make a simplistic decision. Longer term implications can wait, or they can be fixed if and when they arise.
They are fishing for free ideas from as many sources as possible.
The end result for the client?
- Wasting time going through scopes that are quite different in scope, and in price.
- Forced into working with budgets that may be higher than necessary.
- The numerous assumptions made in the various scopes can unwittingly seed the project with new distractions, questions and variables.
- Forced to make numerous and costly course corrections along the way.
- Forced to fix problems, or be lumbered with limitations, that could have been prevent up-front.
The most practical and reasonable win-win situation here is clearly to start off by paying someone to do some serious stakeholder needs analysis, run brainstorming sessions., and write proper functional specifications before the project goes out to tender. Even for smaller web projects, this step saves a huge amount of grief and money in the long run.
Once the client has a clear scope in place, tender respondents will have a better chance of quoting appropriately for the actual work required, instead of stabbing in the dark. The client will then get a more consistently comparable set of responses.
This process I have described presumably applies to non-IT projects as well (construction, manufacturing, service outsourcing etc), but I have no first hand exposure to these. Please share your experience below.* I have played a part in a range of permutations of respondents: a consortium of small businesses, a consortium of medium and large businesses, a single small business and a single medium sized-business. Clients have been government bodies, institutions, sporting and arts bodies; in Australia, Singapore and Europe. The success rate has been variable and inconsistent.