Buying Like a Big Business

 
 
By Peter Coffee  |  Posted 2006-12-11 Email Print this article Print
 
 
 
 
 
 
 

Analysis: eWEEK Labs offers SMBs advice for buying smarter.

A small or midsize business can take some pages from the playbooks of the biggest companies when it comes to going into the market in search of either goods or services.

The SMB need not settle for overpriced off-the-shelf offerings but can send out an RFP (request for proposal) that invites a supplier to apply its insight and expertise to meet a need better or make the cost lower—or even, in the best of all possible worlds, to recognize an opportunity for synergy that achieves both goals, perhaps even paving the way for both buyer and seller to grow.

The SMB RFP

Regardless of the size of the buyer, an RFP should be an accurate but not overwhelming statement of who the buyer is, what the buyer wants to accomplish and what constraints the supplier should strive to satisfy. Buyers should be careful, though, not to handicap would-be proposers by stating the expectations as if theyre firm requirements.

If theres a hard deadline for meeting a requirement, for example, thats one thing, but a tentative schedule should not morph into a minimal requirement for acceptable proposals. There are any number of reasons why giving proposers some flexibility in schedule, or in many other proposal parameters, might dramatically improve their bids.

The RFP has some of the same elements as a specification, but its not the same thing. An RFP thats overly specific may screen out innovative responses, failing to take advantage of supplier expertise. A vendor should be encouraged to respond to an RFP with a set of options that represent differing blends of price, performance and risk, rather than being constrained to offer only one option.

The RFP also has some of the same elements as a contract, but, again, it is not the same thing. The RFP is the want ad for the job, not the employment agreement for the new hire. Its goal is to give the buyer the best possible variety of options, not to scare away qualified suppliers.

Its perverse to let an RFP become so laden with legalisms that it might as well be a want ad that reads, "Suspicious micromanager seeks supplier desperate for work—tolerance for uninformed supervision a must."

Dancing With An Elephant

When a small customer buys from a big supplier, there are special issues that require consideration and also particular opportunities worth pursuing.

Click here to read more about SMBs big business needs. Big suppliers achieve economies of scale by accumulating expertise and intellectual property that they can then apply to meet the needs of other customers in the future. If a buyer wants any degree of exclusivity in owning the rights to work thats done in the course of providing a solution, that preference should be clearly communicated early in the process.

In the increasingly complicated environment of legal and regulatory mandates, its possible that a large supplier may know more than an SMB buyer about applicable requirements that a solution must meet. An RFP should make it clear that any such requirements mentioned in the proposal are not an exhaustive list and that proposers will be evaluated in part on their relevant expertise and input in identifying any other requirements that must be addressed.

If a buyer is seeking technology transfer from the supplier in the course of solving a problem, rather than paving the way for a continuing service relationship, thats also something that needs to be clear—or a buyer may discover that the supplier wasnt intending to sell what the buyer thought it was buying.

Technology Editor Peter Coffee can be reached at peter_coffee@ziffdavis.com.

RFP: SMB buying concerns

Statement of Goal

* Business need to be met (not a predefined technical solution)

* Desired scope of proposal

• Design/development

• Turnkey delivery

• Operation/support

* Description of proposal process

• Proposal timeline and criteria

• Method for handling questions

General Project Elements

* Timeline and deliverables

* Ownership of work Technology-specific elements

* Existing technology environment

* Hard limits, if any, on key parameters

* Known applicable regulations and mandates

Proposal Elements

* Supplier background/references

* Key team members (if applicable)

* Third-party involvement

* Proposed solution

• Key details and unique features

• Budget/schedule

• Risks (cost/schedule/technical)

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Peter Coffee is Director of Platform Research at salesforce.com, where he serves as a liaison with the developer community to define the opportunity and clarify developers' technical requirements on the company's evolving Apex Platform. Peter previously spent 18 years with eWEEK (formerly PC Week), the national news magazine of enterprise technology practice, where he reviewed software development tools and methods and wrote regular columns on emerging technologies and professional community issues.Before he began writing full-time in 1989, Peter spent eleven years in technical and management positions at Exxon and The Aerospace Corporation, including management of the latter company's first desktop computing planning team and applied research in applications of artificial intelligence techniques. He holds an engineering degree from MIT and an MBA from Pepperdine University, he has held teaching appointments in computer science, business analytics and information systems management at Pepperdine, UCLA, and Chapman College.
 
 
 
 
 
 
 

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