03 Oct Creating a B2B eCommerce RFP? Your process might be broken
Retail companies are very familiar with eCommerce software and platforms. Business-to-consumer (B2C) companies have been working with eCommerce systems for years. Both understand and have the talent to support them. As it becomes necessary to evaluate a new eCommerce platform, retail companies know how to assess the differences. B2C companies understand their business requirements and know the right questions to ask in order to evaluate the different solutions in the marketplace.
Now, here is where the problem arises.
If you were to ask the typical Business-to-business (B2B) organization if they have the experience and the resources to properly evaluate eCommerce software to assess the right fit for their organization? In my experience most will emphatically answer “no.”
If the same B2B Company were selecting a new Enterprise Resource Planning system (ERP), a tremendous level of expertise would drive the process. There would be a team of qualified people with the right knowledge to choose the best platform for the business. In this case you are not selecting an ERP, so the challenges are unfamiliar as you chart new territory and select a new eCommerce platform.
The Typical Approach
The models for selecting an eCommerce platform originated in B2C. This creates a challenge in B2B since traditional models do not work. The challenge is due to a lack of resources or knowledge which limits the eCommerce experience, omits the right questions and cannot differentiate vendors. The typical selection (by and for) looks like this:
- Analyst is hired to clarify software platform landscape.
- Consultant or Agency is hired to identify platform requirements
- Request for proposal (RFP) is written.
- High-level requirements are built.
- Requests for information (RFI) sent to multiple vendors.
- Vendors narrowed to the top three.
- RFP with more detailed requirements is developed and sent to remaining vendors
- Top vendors present and demonstrate individual platforms and differentiators
- Build use cases
- Top vendors demonstrate use cases
- Use case demonstration is evaluated.
- Select the platform
Albeit lengthy, the process achieves the desired result. Business analysts document requirements and needs; companies qualify and solicit vendors, and select a vendor with the best qualifications. In general, the process is also straightforward. The organization issues an RFP, evaluates proposals, chooses a supplier and negotiates a contract. There is a sense of safety in the RFP process. The competitive element creates an environment in which the customer feels confident that they made a good deal. Unfortunately, B2B companies are often unaware that the RFP process is fundamentally flawed. A B2B company that follows this model will often result in failure and occasionally, even termination of the original decision makers.
The traditional software selection processes:
- Heavily favor vendors over customers
- Are stagnant, producing little change over the past two decades
- Follow a waterfall process
- Remain costly
- Are separate projects from the actual implementation
- Are tedious and time-consuming
The world and our use of technology have changed significantly over the last several decades, but the software selection process has not. Ultimately, RFP building consultants are the sole beneficiaries of this process.
The B2B eCommerce RFP process is broken
The process of writing an extensive RFP and evaluating and accepting complicated bids from unknown vendors is risky and expensive. A company will often invest substantial time and money into creating an RFP. The vendor will often spend a comparable effort to win a big project. The winning vendor must amortize the RFP response work over the execution of the project. The losing competitors make a substantial effort but earn no money. As a result, risk gets passed on by the creation of higher prices on successful bids.
For both sides, the effort produces useless paper that holds little value beyond making a poor decision.
There is a better way to select software platforms.
If not RFPs, then what?
Based on years of watching companies struggle, I have taken the best examples of agile and social approaches to selecting software platforms and create a brand new step by step approach. The AgileRFP.
AgileRFP is a step by step, agile, and social approach to selecting B2B eCommerce platforms.
If you are not interested in the new process, start with this article: 6 best practices for selecting an eCommerce platform.