Archive for March, 2012

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Why RFP for Copiers don’t work anymore. Who’s buying just copiers?

March 24, 2012

Actually 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

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“Just a Copier company”

March 1, 2012

One of our Sales People took over an account from a company that he used to work for. While he was there doing some follow up training his main contact was telling him how much she appreciated how smooth the installs went, both from the Service Tech & our Systems Engineer. She said that she had gotten used to doing all the network portion of the installs herself with little to no help from our predecessor. She said that they don’t have Systems Engineers (SEs).

Seeing one of the competitors MFDs that was still under lease my salesman asked her how do you like the Xerox? To which he got the reply “The machine is OK, but they are just a copier company”. They can’t connect it, and integrate it with my network, my computers, or my software. My Sales guy was very pleased to hear that his old company is still just a copier company, they are still just selling boxes. Good luck with that!

Don’t expect to maintain any reasonable margin if you are just selling boxes. If you can’t leverage the functions of a multi functional device and integrate it into your customers infrastructure then you will have to be the cheapest. Because until you can actually solve your customers business problem you are selling a commodity. When you genuinely solve their problem by knowing how to configure your hardware & software within their environment you have added value. You have sold them (dare I say it) a solution.

By the way, no one calls us (NECS) “just a copier company”, how about you?

That’s My $0.02
Vince McHugh
vince.mchugh@yahoo.com