Why RFP for Copiers don’t work anymore. Who’s buying just copiers?
March 24, 2012Actually if all your company needs is a “copy Machine” then an RFP (Request for Proposal) WILL work for your company.
But when was the last time your company or organization purchased a “Copy Machine” – a machine that JUST MADE COPIES?
Don’t you buy MFDs or even Smart MFDs? Do they Scan, Print, and do Network Faxing? Are you leveraging the power of your Smart MFDs by loading software on them that extends and enhances their capabilities to connect into your network infrastructure or back end servers? If not than you are missing out on the REAL SAVINGS that a Smart MFD can bring to your company. Have you ever heard the phrase “strain at a gnat, but swallow a camel” that describes the process as it relates to a traditional copier RFP. Because the focus is on trying to make all of your vendors look exactly alike, so you can force the cheapest price for the dumb down comparison that the RFP requires. There is a better way to do an RFP.
If you work in purchasing and you are responsible for the “Copier RFP” and your biggest concern is replacing like for like features (50ppm and duplexing) at the cheapest price then you really need to update your process, and broaden the input you receive from other departments like IT, Compliance, Governance, Security, and Operations. If you don’t get their input as to what they need then you will buy the cheapest “copy machines” that will NOT meet any of these departments needs, so they will need to go out and purchase other devices that will cost your company more than necessary because your Copier RFP did not consider their needs. Or worse yet, you actually thwart their projects or requirements because the bargain copiers you bought can’t do what they need.
My company was invited to participate in an RFP for a company that we have sold to and supported for the last several years. This company was purchased by a larger company and the new parent company was very concerned with the fairness of the RFP process. It was very much a traditional RFP process, and the relationship that we had forged as a trusted technology partner and adviser was discounted, and we were treated like any other vendor. We were told that this was done in the interest of “fairness”. While it was “fair” to the new vendors, it wasn’t in the best interest of the customer. Is that what the customer wants the RFP process to do? To be best for the new vendors, and not their own organization? I think not!
A new vendor who is willing to buy the business by being the cheapest is hoping for a traditional RFP. Because they have no inside knowledge and if they have a box mover type Sales Person than they will drop their draws and give them a bottom feeder price. The traditional purchasing agent is counting on it, not because they want to buy from the new dealer, they want to leverage that offer to force the incumbent dealer to be cheaper. And I get that. I am NOT against competition, but I am against dumbing down that competition to speeds & feeds. Anyone can sell you a BOX that does 35 ppm color output with 4 paper draws, and a stapler finisher. SO WHAT! THAT IS A COMMODITY!!!
The reason that I am writing this is this just happened to me. We won the traditional RFP bid. We met the traditional speeds & feeds that the traditional RFP specified. We reduced our cost to be more competitive. NO, we were not the cheapest bid. We relied on our excellent history of service & support, and the reliability, and ease of use of our equipment to offset the fact that we were higher than our competition. We were the best value, and we still won the bid (because we earned it)! Yet the Purchasing folks still had to make a case to their bosses who signed the deal in their corporate office why we were the better value.
But when we went to implement the RFP equipment, and start the training we heard NEW REQUIREMENTS that the RFP did not specify from departments that were not involved in the RFP. Because we were not allowed to talk to compliance, and really vet this RFP with the IT Department. So now we have another meeting scheduled to discuss a change order to add in what the RFP left out. It will cost more than the winning bid because addition of features required to meet new previously unidentified requirements.
RFPs are not likely to go away, at least in the near future. Although because they require so much work on the customers part I have seen very large organizations award no bid contracts to current vendors who have done a good job for the customer and have a proven track record. I recommend this trend UNLESS the current vendor has NOT done a good job for your company. If you are unhappy with your current Vendor then by all means look for a new one who can earn your business and earn the right to get your renewed business without having to go out to bid each time.
If you have to do an RFP and you have a good vendor, who you consider a partner and trusted adviser then engage them early, Pre-RFP. Engage their Systems Engineers who can both ask the right questions and propose the right solution for your company. Ask for them to use their expertize to help your company craft the RFP so that it meets all of your needs. You may say that this is not fair to the potential new vendors! True, but what do you owe that new vendor? How has that new potential vendor earned your business? The better question to ask is what is BEST for your organization? I know that this relationship has the potential for abuse, and I am not talking about a sweet heart deal. But rather leveraging the expertize of your technology partner to craft the best requirements document pre-RFP, and then make that available to all of the vendors. I have seen this type of RFP and yes, I can tell when another vendor has helped craft an RFP. But that tells me that they are doing a good job for this customer and has earned the right to advise them. Which means unless I can WOW them with something that their current vendor can not do, they will remain loyal to their current vendor. I am OK with loyalty as a reward for good service & support, rather than “fairness” to a vendor who has done nothing for your company, but maybe that’s just me.
What should you do if you don’t have a current vendor that YOU trust to advise you in crafting a great RFP? You could hire a consultant, but most of these that I have met are experts in the traditional RFP process. You could form an internal team to handle the RFP. This team should include someone from Purchasing, the IT Department (possibly the printer expert), someone from Security, Compliance or Governance, and Operations (The people who handle the “Copiers \ MFDs” day to day). This group should meet with at least six months to a year before you award the bid.
Consider sending out a questionnaire to your departments (not just department heads). Ask them do you have any unique scanning, printing, or faxing needs? Do you have any upcoming projects that will involve document management, or printing, scanning, or faxing? Are there any unique compliance or governance issues that may effect how are end users scan, print, fax, or copy? The response to this questionnaire will help you ask the right questions of potential vendors.
Have the group interview a number of vendors and let the Vendors answer the question “Why should our company do business with you?” Then narrow down the list to two or three vendors that are a good fit for your company.
Things you should consider when selecting a Vendor:
Q. How long have they been doing business in your area(s)?
Q. How long have they sold & serviced the equipment that they are proposing?
Q. How long has your salesman been with this company?
Q. How many technicians do they have? In Total? In your area?
Q. Where is their Dispatch? Local or in another state?
Q. Where is their warehouse? Local or in another state?
Q. How much ($) in Parts, Supplies, or Inventory do they have in their warehouse?
Q. Do they have a team of Systems Engineers (dedicated specialist that integrate these MFDs into your network infrastructure)?
Q. Where are their SEs (Systems Engineers) based? Locally or in another State?
You may not care about this information before you purchase your MFDs but these questions will tell you what kind of infrastructure the Vendor has to support you after the sale. This can make or break the long term relationship when things don’t go as planned. It will also give you a better sense of what the Vendor brings to the table. Do they have the infrastructure to support a company like yours or are the simply a Sales Office with all of their infrastructure in another state Like a Hollywood Western town that has a great front, but nothing behind it when you look around back, LOL. A Vendor that has a better infrastructure will cost you more, but will also provide better service & support, and you will end up with less headaches!
Finally, ask your Vendor to give examples of how they have uniquely helped other companies get the most out of their MFDs? Can they give examples of how they have helped a company in your industry (Healthcare, Manufacturing, Education, or Finance)? Vendors who say “We CAN do this, and we CAN do that” may NOT be able to say we HAVE done this, and We HAVE done that! Well done is better than well said!
If you have a Vendor who has earned your business consider not doing an RFP. At least not every time you refresh your equipment. Think of how much time, effort, and money it can save your organization. But if you must do an RFP it is time to bring the process into the 21st Century. This may mean that you need a Project Manager and not a Purchasing Agent to lead the team. Either way focus on what’s best for your company, what brings the best value to your company, that should be more important that who will give us the cheapest 50 ppm copy machine.
That’s my $0.02
Vince McHugh
vince.mchugh@yahoo.com
MFPs, MFDs, PRINTERs & COPIERs 
Vince, this is very well said. I can tell through reading this that this has come through experience. Nice job!
Thanks Larry!
Yes, I am a graduate of the school of hard Knocks!
Vince
very well put! thanks for the info, all most all of my sales are based on RFP’s and this given to a customer prior to the process, can help validate that other reps and companies may be able to assist the customer in ways they had not looked at. We all have lost on price to only follow up 6 months later and nothing is going right, but they got a good deal based on dollars. Dad said once, “you can buy oats for the horse two ways son, you can buy nice fresh oats from the local exchange or the ones that have been run through the horse”
Have a great day and thanks for posting
The sweat taste of A low price is soon forgotten in the face of poor service & support.
I want to mention that I had a follow up meeting to “debrief” the Director of Purchasing who ran the RFP process. They wanted to call us on the carpet to discuss why they needed to pay more after the RFP was awarded. This was a conversation that I was looking forward to. My Sales person and I sat down in a conference room with about a half dozen people form the company that awarded us the RFP bid.
The Director of purchasing asked us\me why we didn’t include the feature that they ended up needing” in our proposal. I replied because your RFP did not spec that as a need. He replied but you should have known that we needed it. My retort was if we did include it, we would have lost the bid and you would be having this discussion with Xerox, because Xerox would not have included a similar feature (That wasn’t in the RFP). As a result of NECS trying to do the right thing Xerox would have been SOOOO much cheaper you would have awarded them the bid.
I went on to explain that If we were allowed to work with your company to use our expertise to help you write the RFP we could have uncovered that need, and then BOTH Xerox and NECS could have competed on a level playing field to bid on what your company really needed. But to ask us to go above and beyond the specs of your RFP when our competitor is not going to do the same, is business suicide!!!
The Director of purchasing was uncomfortable with this discussion because it exposed the flaw in the “fairness” of the RFP process. He implied that I should have reached out to their IT department to make them aware of this need. I said if I did contact their IT person directly (who we have a very good working relationship with) I would have been in violation of the rules of the RFP, correct? He responded yes, that would have violated our RFP policy.
The Director of purchasing came into this meeting trying to expose that we did something underhanded, and it cost his company more than they wanted to spend AFTER they awarded the RFP. What he ended up learning (begrudgingly) is that we behaved not only ethically but completely within the rules of the RFP. What became the elephant in the room was the flaw in the RFP process, and the glaring need to update how an RFP is done. Since the RFP has been a staple tool in a Purchasers tool box, he was very uncomfortable that the RFP itself had caused the problem that we were there to discuss. We’ll see if they really understood that when they go to issue their next RFP.
Sounds like all this customer really needed was a trustworthy and experienced independent consultant. Then all of the problems you experienced would have been avoided. While I agree with 90% of what you’ve written Vince, one area I have issue with is a customer asking a dealership to assist in drafting an RFP. Any purchasing person doing that should lose their job!
Jeff,
I understand your concern, but I have yet to meet an independent consultant that genuinely understands the technology that the various dealers offer. Most of them come at the RFP process from a cost savings prospective. In fact they are often paid based on how much they save the customer. Putting them at the same disadvantage as the Purchaser.
I have been involved on a number of RFPs that were written by an independent consultant. One that comes to mind was for a mid size law firm. My company has extensive experience supporting the legal community. After reading the independent consultants RFP we replied with a decline to bid which shocked both the Law Firm and the independent consultant. The RFP was completely one sided, protecting and favoring only the law firm. It was designed to get the rock bottom lowest price, and to allow the law firm to break the agreement capriciously without penalty.
A good business deal has to be good for both parties. We are not beggars at your door. We are not a non profit organization. If the positions were reversed do you think the law firm would enter into such an agreement? Would they counsel a client of theirs to enter in to such an agreement? If they did they would be sued for malpractice and rightfully so. But their seems to be an attitude with Purchasing agents, and especially independent consultants that they need to slant the deal so that it only favors their company. That’s simply bad business. And they end up getting only the bottom feeders to bid on their RFPs.
It is neither wrong nor immoral for a company to make an honest profit on their goods and services. When an RFP insists on denying this honest profit something has to suffer, usually it is service after the sale. So we would rather lose the short sale that we can not make an honest profit on, and wait until the cheapest bid shows themselves for what they are. Then (usually 3 to 5 years later) when the cheapest company is no longer allowed to bid because they have demonstrated their inability to support them after the sale, we will win that business and we will be allowed to make a reasonable profit. Do you think in the long term getting the cheapest bid really helped the customer?
We sell value and not the lowest price. My company can afford to do this because we are in this for the long haul. We have a great reputation for service after the sale. On the rare occasion when we lose a customer to a lower price we often get them back as soon as they get out of their current “lower price” bid. We had one school that we lost to a lower priced competitor that called us in six months asking us to help them get out of their lease. Another law firm bought out their lease 2 years early at a significant expense because the service and support they were receiving was so poor. All of this has a cost.
Generally speaking the independent consultant is long gone by the time these issues come to light. S/He has no skin in the game when it comes to making the solutions & equipment work after the sale. S/He has been paid to get the low price and is on to the next consulting job. This is what is different about a vendor who has become a trusted partner and has helped their customer in the past. A vendor that has a proven track record, that can support what they propose and is committed to making it work after the sale. I think that vendor has earned them the right to advise their customer on what should be in the RFP. To keep it honest We still have to bid on it, but their won’t be any surprises after the sale because the RFP was written by someone who really didn’t understand the technological needs of their customer.
So I will respectfully disagree, and stand by my post.
Vince, I guess you chose not to respond to the RFP we issued for such Chicagoland customers as Crete Monee School District or the College of DuPage. It sounds as if you knew there WAS such a consulting firm as you describe (knowledgeable, fair, honest, with support after the sale) that you would be in favor of working with them. You write as if there are no such firms or never could be, but you really haven’t researched it very well. Just as you don’t like consultants who don’t understand our business (and I agree that describes 99% of my competitors), I don’t like folks disparaging what I do or pretending that somehow firms like mine don’t exist. Look up http://www.probuyersllc.com and my background then give me a call if you want. Or keep your head in the sand and hope we go away. The reality is we can help you earn business with firms that don’t want to consider you. All you need to do is present a fair proposal. Are you willing to be held up to the light of the truth?
Vince I noticed after my post that you are from the Boston area not Chicagoland. Sorry got the dealer name mixed up! How about the Salem State University RFP, did you review that and find fault with it? I’ll send you a copy of that RFP if you can’t find it, just let me know.
Jeff,
I am sure that there ARE consulting firms that look at more than getting the cheapest price. It seems like your firm is one of them. I am sure that if we were in the same market place that we would likely do business together to the mutual benefit of our common customer.
But by your own words you said that this blog article describes 99% of your competition. That also has been my experience. Hence this article. There is always an exception that proves the rule. The challenge that you and I run into is customers too often have to experience the pain of the “cheapest bid” to understand the difference between “the cheapest” and “the best value”. Without the bitter taste of poor service and support after the sale fresh in their mouths customers too often succumb to the lure of a cheap price. Hopefully your firm can show them the difference!
Best of Luck,
Vince McHugh