The Art of the RFP

The Request For Proposal (RFP) is one of the most commonly used tools to address the cost of printing inside organizations, both large and small.  Like any tool, it can be and is frequently used improperly.  The content being presented draws upon more than 30 years of industry experience across all sources of print including the office, the in-plant and the commercially outsourced print.  This paper will help the reader discover the best practices in the preparation, creation and execution of the RFP.  A properly prepared RFP is respectful of the vendors involved and the requesting organization.  It allows vendors to truly deliver their best response and be fairly compared with other respondents while most efficiently revealing the logical choice of vendors for the requesting organization.  

This paper will break down the RFP process into three key areas:  

• Preparing for the RFP,
• Creating the RFP, and  
• Executing the RFP.  

Each key area contains insights and advice for making the next RFP successful for everyone involved.

Preparing for the RFP

We’ve all heard, and probably used, the old adage, “Fail to prepare, and prepare to fail.”  It has never been more true than when we look at the elements that make up a successful RFP process.  Proper preparation begins with the understanding of your current printing state including device utilization, service plans, cost data (sourcing) and employee habits/attitudes.  Having a print strategy that the RFP will serve is the second essential piece of preparation.  Having data that defines what your institutional baseline is and knowing where you want to go (strategy) work together to allow an RFP to be crisply framed with the specific task of moving forward as defined in the strategy.  Finally, understanding your current baseline and having a print strategy allow you to keep your focus on the Total Cost of Ownership (TCO).

Baseline Data & Understanding

RFPs should always start with the knowledge and reality of where the requesting organization stands today with respect to a defined printing strategy, in general, or print devices specifically.  How else can one credibly measure and prove the success (ROI) from the vendor selection and device installation resulting from the executed RFP?  It is this baseline metric that is required to measure the success (or failure) of the selected vendor over time.  Device RFPs should represent but one step in an overall print strategy that is an investment worthy of tracking and measuring to validate the achievement of the intended results.

BEST PRACTICES:

RFPs should respect their respondents, not overly burden or task vendors to do something that is not possible, nor fact-based, or that may encourage unhealthy assumptions or behaviors.

RFPs should seek to minimize risk for both your organization and the vendors. The introduction of risk always leads to higher prices by the respondents to protect what they don’t know.

RFPs should always demonstrate and encourage transparency. We want their best; respondents can only give their best if they have all the information they need to put their best foot forward.  Remember, it is entirely possible for a vendor to show savings that do not exist, thus allowing a perceived low price, or estimated costing, to be confused with actual costs.

RFIs should never be used as they signal weakness and tell the desired respondents that the customer is inexperienced and not aware of the industry.  Further, asking generic questions is disrespectful to the respondents and often leads qualified respondents to not respond as it extends the investment by the respondents and lengthens an already lengthy and costly investment.  If one needs to go to RFI, they most likely aren’t prepared for a successful or efficient RFP process.

Print Strategy

Any print strategy is incomplete if it doesn’t address both devices and users — the people that actually initiate most print workflows. Furthermore, a good RFP strategy should always include “less print” as a key mandate enroute to reducing print to only the essential print.  Including this statement: “Devices don’t print, people do” sets a pretty clear expectation that the requesting organization is serious about managing both devices as well as user behavior.  If you are not managing user behavior with respect to print, you are not managing print and you are not managing to the least cost as this component contributes more cost than any other single item, up to 75%.  

People print for only two reasons:  1) for convenience, or 2) as part of a work process that requires paper.  Both reasons can be directly impacted positively and directly correlates to the “less print” mindset.  

BEST PRACTICES:

RFPs that include strategy enable vendors to know with certainty what the requesting organization wants/expects and why. After all, clear strategy is what respondents want.  It is respectful and fact-based.  It does not unnecessarily tax their resources (guessing at the intent of various requirements) and allows them to do what they are best at.  It always provides a more efficient and timely process, which benefits everyone.

By not providing vendors with baseline current state and strategy, timelines are invariably lengthened increasing vendors costs. This leads to higher prices and delays the desired savings for the requesting organization.  No one is happy – especially management.  

RFPs should be in concert, not in conflict, with IT or Finance. 

RFPs should present realistic expectations for the respondents. RFP strategy will highlight the need for a holistic print strategy as the environments where print happens are dependent on one another: from offices to departments to workgroups and mobile print, to centralized print services, and to print that is externally procured and produced.

Strategy should never be relegated to the vendor whose desired outcome is not in perfect alignment with the requesting organization.  Vendors’ business models depend on 1) print and 2) more print. The desired outcome of the requesting organization’s print strategy should be to reduce print to only the essential print.  In reality, this means less print, less waste, and lower spend.  

Less print results in at least two undesirable outcomes for the RFP respondent: 1) Your organization has excess equipment on day one that only increases over time, and, 2) respondents are extremely disappointed that what they expect to receive (refresh entire fleet, replacing competitor boxes where possible) has no chance of being realized and may, in fact, cause a loss for them.

Respondents need to know the holistic nature of the overall print environment and be cognizant in their responses that what happens in one environment impacts the other one.  World-class RFPs make sure this is known and acknowledged.

RFPs should request specific examples of communications, training and reporting which identify activity at the user level and enable the assessment of the respondent’s ability to engage in end user behavior management.

Mindless print is like a balloon; If you poke costs on one side, it will expose itself on the other side.

Dictating “less print” is the only way to reduce costs beyond price.  The most secure, the most environmentally friendly and the lowest cost page is the page that never gets printed; period.  Absent the RFP containing this mandate, respondents infer that they can have their way and rarely does one ever get the respondents’ very best, which is ironically, why one goes to an RFP.  Furthermore, it may also lead to unhealthy statements and commitments with promises that may never happen.

Total Cost of Ownership

To support a holistic print strategy, an effective RFP must be written from a total cost of ownership (TCO) perspective.  As such, the RFP should always seek transparency and not lose focus on the TCO as the various requirements are put forth.  The pursuit of TCO should be established in the strategy section of the RFP and carried throughout the RFP.

BEST PRACTICES:

Requesting organizations should seek to understand labor rates, the equipment price, the break-fix service price AND the supplies cost – separately, by line item.  The intent is to understand where the vendor will make their money and thus enabling an expert response.

When asking for prices, it is wise to define the exact monthly volume needs, the number of each device type required (single function, multi-function and B/W or color etc.) and the required speed range for each device type (typically, no more than three speed ranges for each type). This provides for the most efficient and best response comparison.

Please understand that the prime focus of the traditional RFP – and the pricing matrix – is on the box, an item that represents less than 25% of the total cost of ownership.  It should be noted that the box represents just a fraction of the margin for the respondents – the box is the razor – respondents give it away to lock the requesting organization into supplies and break-fix contracts.  Toner/ink, by itself, is a +50% margin item.  A gallon of color ink costs $4,700; black ink costs $1,700; laser toner costs $900; Dom Perignon costs $600; and gas about $3.70.

Creating the RFP

The creation of the RFP should be the culmination of all the preparatory work: the revelation of strategy and the establishment of the baseline data.  Understanding how the vendors’ business models work and how their packaging tendencies are used to protect their margins work in your favor as your RFP begins to shape the details of the competitive field.

MPS

The leading offer in the Managed Print Services (MPS) world today is based on a business model commonly referred to as “Cost Per Copy” or “Cost Per Click” or “Utility Plan” pay only for what you use.  This model seems to be a great way to get a predictable, fixed cost per page which help you plan your budgets and reconcile invoices.  Recall that device vendors benefit from more print, not less print.  What is going on here? 

The MPS world begins financially upside down until a certain volume is attained.  After that volume, the revenue continues to climb in spite of the fact that the costs to deliver those volumes has not changed.  More print, more revenue.  Pretty simple model.  There is a reason CPC is so popular: it is simple, and easy to digest at a superficial level.  It makes sense to “pay for what you use” which should raise a red flag.

The only way that a customer truly gets rewarded for properly utilizing their investments is with buy- or base plus click.  Every other way, the maunfacturers gets the rewards. It must be pointed out, that there is a corresponding risk with base plus click.  This occurs when too many devices are running too little volume and the click portion cannot overcome the base price.  In this event, base plus click will be higher than a straight cost per copy.  

In reality, the intent is to use software to manage users and devices to ensure that volumes are always in a net positive position.  As your strategy dictates, you are driving “less print” which means you’re always looking at how to eliminate aging, less efficient devices as volumes drop corresponding with a positive impact on user behavior.

MPS is touted loudly by manufacturers and resellers, but the truth is “managed print services” turns into “managed printer service.”  Fair enough, call it what it is and get the best possible.  Much like cost per copy, MPS is being offered because it favors the respondents as they know that most organizations are overworked and lack the subject-matter expertise to do it right.  Bottom-line on MPS, it is nothing new.  It has been around since the mid-1980s, and the only thing new is that MPS is no longer called “toner inclusive pricing”.  Imagine that.

BEST PRACTICES:

RFPs should eschew this pricing plan opting instead for base plus click plans, and/or purchase, maintenance and cartridge supplies separately.

RFPs should always avoid MPS deals in favor of procuring hardware, break fix and supplies separately to get what is best for them and for the respondents.

RFPs should be clear to define optimization accurately.  Optimization should include both device utilization and end user satisfaction.

First, any RFP should play to respondent strengths and let them be great at that. They make great printing devices, can be great at servicing them, and supplying them. Ask and test them on what more they can bring, as long as it is what you need – be specific.  And ask why they think they are superior than a competitor – give them that chance.

RFPs should restrict features to exactly what is required and to comply with the intent to move towards standards. 

RFPs should always include all output devices, not just network devices. Personal devices almost always produce the most expensive printed page. Sometimes, we get so excited saving pennies and nickels from the networked devices, we are blind and walk past the quarters and half-dollars available to harvest from eliminating the work produced on locally attached devices.

Optimization is a term that finds its way into the MPS space and routinely is a source of confusion.  If handled properly and defined by the requesting organization, optimization includes device utilization rates, employee-to-device ratio and end user satisfaction.  Without active definition by the requesting organization, vendors will offer their own definition for this word and cloud your ability to make a clear comparison between vendors.  Standardization and rightsizing is not optimization!

Features

Device features become another distraction in typical RFP responses as different vendors try to position the utility of their devices against your needs.  The reality of most organizations is that 98% of their printing needs is handled on standard letter-sized paper (8 ½ x 11).   11×17 capable devices use more space, consume more energy, are more expensive to buy, are more expensive to break-fix and are more expensive to buy supplies for.  Know what your users are consuming as a baseline and avoid costly features like 11×17 as a baseline feature.

BEST PRACTICES:

11×17 page capability, and most other features, should be the exception and not the rule.  Know what your users are consuming and then go to RFP.

Color pages are as much as 5-10 times the cost of black and white pages, yet the vast majority of printed color documents rarely leave the four walls of a department or college.  Discourage color usage and save accordingly.

Using technologes like pull printing, the unique needs can be provided and accessible, just not on every device.Break-Fix: 7×24, four hour response, even same-day service is another savings loser as respondents need to hire and staff to a level to deliver, yet there are better alternatives with additional compounding advantages, such as pull printing.

Executing the RFP

You’ve provided your organization’s print strategy and created the expectation of “less print”.  The vendors are impressed with your knowledge of their business models and your understanding of the impact that user behavior has on the costs of print to your organization.  You have heard, however, that it is not unusual for RFPs to linger for more than a year beyond promised deadlines.  Before you send it on to the vendors, let’s button up a few additional details, all but guaranteeing a successful RFP process.

BEST PRACTICES:

RFPs should have timelines that are reasonable, credible and honored, no matter what.

The longer an RFP process takes, the more inflexible respondents are because they are so overspent – emotionally and with actual costs.  Net effect: the requesting organization does not receive the best response and risks damaging their credibility in the vendor community.

Rarely is the best partner one who asks for more time.

RFPs should always reflect exactly what is wanted: with a “leave nothing to interpretation” message sent to the respondents.  RFPs should use pre-populated tables to create an apples-to-apples comparison and make the process more simple and straightforward for the respondents and for the decision-making process.

RFPs should always limit words per response and encourage succinctness.  Additionally, the burden and cost to the respondents to provide the response is not insignificant.  Since nothing is free, not limiting words/response generally results in higher prices.

RFPs should always be managed to create an extremely competitive process and keep as many vendors in the game as long as practical.

The term of typical MPS deals run 3 years plus an option for an additional year at the same rate (3+1) and sometimes (5+1), rarely more.

Finally, RFPs should always be true to the desired state depicted by the strategy – require less print.  When the RFP requires paper and electronic submission, what signal does that send? Lead by example.  Require submission by email only.

After the RFP has been sent to a set of vendors (electronically), you wait for the responses to come in.  A properly prepared RFP makes the response evaluation even easier.  You will, however, need a tool to help keep personal biases and relationships from unintentionally impacting the evaluation process.  Providing this tool to multiple people on your evaluation team helps to insure the objectivity of the evaluation.  

In Table 1 below, such a tool is provided that mirrors what has been offered in the content presented above.  If you do the math on total points, a vendor can score over 100 – that is intentional and a perfect response should be rewarded accordingly.  However, in reality, that is unlikely.  Now it is time to choose a vendor and their offered solution!Table 1:  The RFP Scorecard

Category	Description	Max Points
Thoroughness of response	Assesses the degree to which the response is clear, concise, complete, compelling and answers the questions originally asked.	5
Maturity of the recommended solution	An organization that is accomplished, proven and has the chops to deliver even when things don’t go perfectly. Relevant references are provided with unfiltered access to the reference source.	5
Alignment with defined strategy	Response indicates an appreciation and respect for the stated strategy; reflects interest in the long term by solving the problems of today and works with the customer and others to exceed SLAs.  Thought leadership permeates the response. Who do you trust?	20
Integration	Seamlessly integrated, the solution is open, compatible and plays nicely with existing systems and solutions.	5
Change management	Demonstrates what it means to look from the other side of the box, and willingly addresses the user behavior that drives print.  Commits project managers and introduces best practices from other accounts.	20
Reporting and analytics	Response demonstrates understanding beyond numbers and charts; presents analytics to anticipate the needs of users and suggest appropriate, fact-based, data driven actions.	10
User experience	Response dashboard is simple, intuitive, approachable and efficient.  Security and environmental considerations would add to the elegance of the solution beyond the actual user.	10
Price and cost points	Response indicates the understanding that total cost is more important than low price only and commits to lowering print volumes, limiting product/feature sets to actual needs and addresses break-fix service most cost effectively.  A particularly innovative price plan and transparency across the board adds to points awarded.	15
Service Coverage and Account Management	Comprehensive local service coverage is an indicator of responsiveness potential of any vendor as is additional regional offices or other significant installations in the vicinity.  Furthermore, the vendor’s senior and local account management must be aligned and compatible to be considered as most likely to deliver their proposed solution.	5
Business continuity	Respondent demonstrates growth and stability in challenging economic times with resources to reflect continuous investment, innovation and customer care.  Respondent shows awareness and credibility in the market capturing trends before they occur.	5
Wow factor	Bonus points for unusual creativity, innovation or flexibility in one or more portions of a response.  Equalizes any other factors that warrant consideration for an impressive submission to this RFP.	10

 

Conclusion

By now, you should have a firm grasp on how to think about an RFP that will provide your organization with the lowest total cost and allow responding vendors to confidently respond in the most efficient manner with their best solutions.  You understand the need to focus on the total cost of ownership and are thinking about how to get the baseline data you need about the devices, print volumes, consumables volume/cost and employee attitudes towards print.  If you didn’t have a strategy for print, you were given some ideas in this paper about how to approach that task.  It makes a lot of sense to have a strategy for managing print in place before you begin work on the next RFP.  After all is executed, you will need to reflect on the outcome of the RFP and its performance on delivering against your print management strategy.

Sharing your strategy in the RFP along with the clarity of a well-defined future state of your organization’s needs helps make the vendor’s task of responding highly efficient.  Having gained insights into the MPS world, you know that the base plus click model is most likely the only model you will consider.  Your clarity around the go forward design and specific device and break-fix needs reflects your baseline data and your understanding of your own users and their trends. As a result, your RFP doesn’t provide any room for devices features that your aren’t using now and might need in the future.  Clarity enables vendor response efficiency leading to a far easier response evaluation when they come back to you.

When the responses do come back to you, you now have a tool to objectively assign points to each response.  The responses can be easily tabulated in a spreadsheet for comparative purposes.  The choice should be obvious.  If not, the vendors are highly competitive which is good news.  At this point, intangibles and relationships come into play as each of the competitive responses could work.  Select who you trust!

Finally, the RFP is just one step enroute to making print how it should be at your organization.  Seek objective, independent counsel and guidance to make it so.  Find someone who can work with you to solve the largest problems and sit on the same side of the table with you.  One who is in perfected alignment and wants what you want: less waste, lower prices, lower costs, less paper, less print, period.  Hope and trust this document will help shape your path forward.

By avoiding these common print-buying mistakes, you can save money and ensure your print projects run smoothly.

At PathForward, we specialize in helping print buyers navigate these challenges to achieve cost-effective print solutions.

 

So, want to source more intelligently and more efficiently?

PathForward can help.