Why RFPs are a Terrible Way to Outsource

September 12, 2017 | Shaunvir Singh
Why RFPs are a Terrible Way to Outsource

Whilst infrequent, occasionally, we will receive an RFP – ‘request for proposal‘ – from a prospective client looking to outsource. An RFP is a company’s sincere efforts to outsource diligently and invest time into the whole process. Unfortunately, sending out RFPs is not a diligent way to outsource. That it is established and successful companies are submitting RFPs is a telling reflection on just how poorly the vast majority of companies understand outsourcing and approach the “how to outsource and which outsourcing company should we partner with” conundrum.

Successful outsourcing is not just about ensuring you partner with a vendor that possesses all the necessary skills and qualification at a cost that meets your budget. (Surprised? Wait, there’s more.) Rather, to successfully outsource, you need to ensure that the vendor’s business model also compliments the way you need to work (and not necessarily the way you want to work). Secondly, successful outsourcing is about finding a vendor with whom you are able to strike a good rapport and relationship.

The problem with an RFP is that neither of these two key facets to successfully outsourcing can be articulated properly in an RFP by the vendor or assessed by the prospective client. For instance, the most recent RFP we received had huge amounts of contradictions running all throughout it. On the one hand, the client had stipulated that they wanted to hire a remote offshore employee, whilst, in other parts, the RFP asked how we would manage their processes. Remote staffing and process outsourcing are at two completely different ends of the outsourcing spectrum and yet the client was requesting a bit of both! We couldn’t pick up the phone and point out the client’s error of judgement as the only permitted form of communication was the RFP!

Now we all know that RFPs get mass-mailed to several vendors and so, whilst we tried to politely explain the massive contradiction in the RFP itself, we couldn’t exactly go into great detail as to why, frankly, this company was going about outsourcing in all the wrong way.

Rather than sending an RFP, had the client actually spoken to vendors, they would have realized that their requirements from a particular delivery model were unfeasible. And that a delivery model that combined both, the remote staffing and process outsourcing models, simply did not exist. Talking to vendors would have better educated them about the outsourcing industry and enabled them to modify their plans. If, how you want to outsource, how you should outsource and the business model of the outsourcing vendors are not all in alignment it spells an ominous outcome.

Most likely, what will happen is that one of the vendors out of the many who was sent this RFP, will claim to be able to provide everything the client has requested (even though we know this is not feasible). That vendor will have the best shot at winning the contract, as they have ‘best met all the key criteria in the RFP.’ But, a few months down the line, the client might find that the process has failed because, in reality, what the client wanted simply was not feasible. And should the client’s outsourcing endeavours fail, most probably ‘lack of talent’ will have to ‘foot the bill,’ whereas, in reality, the truth is that the delivery model the client was requesting was simply doomed to fail from day one. A quick chat with a sincere vendor would have revealed that a planning rethink would have been the most prudent step.

Furthermore, we all know how important rapport and relationships are in business partnerships. I would go so far as to argue that they are sometimes even more important when it comes to outsourcing overseas. And yet, most clients completely take out the human element from the outsourcing process. You can learn so much about a vendor simply by picking up the phone and speaking to their client account managers and having just a little bit of dialogue. Often, speaking to even just one client account manager tells you so much about an outsourcing company’s culture and business approach. Communication is the foundation of any partnership in any sphere of life; you pick up on small intuitions and gut feelings. But none of this can get communicated in an RFP! In many respects, just a 15-minute video conference call with a vendor can tell you so much more about the outsourcing company than any lengthy RFP and that is the second reason why I most certainly do not advocate using them when deciding who to outsource with.  

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