Not-for-profits make decisions by boards. There is a high degree of scrutiny over their decision-making because they use funds from donors or members. When it comes to purchasing technical solutions, the default is to do what is considered safe – the old tender process.
I have been on both the buyer and vendor side of expensive and lengthy tender processes and, after playing a part in hundreds of them, I have concluded they simply do not deliver good value! There must be a way to tender smarter.
What are Not-For-Profits trying to achieve through a tender process?
Organisations seeking a new CRM system typically undergo lengthy (anywhere from 4 to 24 months!) and costly tender processes.
Industry consultants typically oversee these processes and are often unintentionally perceived as biased towards a particular technology. Organisations endure this struggle to:
- Demonstrate to boards or stakeholders that they have undergone due process in the selection of a solution
- Get an accurate ballpark estimate for the project (because it is their board that needs to approve a budget)
- Select a technology that will work for them (in truth, many technologies would probably work – but how they are implemented matters)
- Select a partner that they trust and can work with (this is the most critical, and often neglected part – the human side of selection)
What do Not-For-Profits normally get out of a tender process?
- A long, expensive process that consumes time and resources.
- A beauty parade of how much resource a supplier can throw at a tender process (this favours the large and overly bureaucratic vendors – of course, they will bill this in the end somehow)
- A skewed view of the real value of each offering, based on pre-scripted templates of functional requirements
- An idea of how well the vendor’s sales team can write and present, which are not the same skills as a services team delivering a complex technical project.
If I had a penny for each time a selection was made solely because of how much time was put into the tender response, I would be rich. I am often left bewildered by the short-sighted choice of technology partner(s).
There has simply got to be a smarter selection process that delivers better outcomes!
And there is.
Nowadays, it is completely feasible for a union, association or charity to run a valid selection process themselves that gives accurate results and lowers the entire risk of implementation.
Here are 3 tips to getting good results from such a process.
Tip 1 – Get to the shortlist, fast!
Let’s assume that most technology solutions that have been out there for some time and can do most of what you need. How different are your core processes compared to other associations or charities? Software does not survive for 20 years or longer in our marketspace if it is not fit for purpose!
There are really just a handful of key criteria that your organisation needs to use to select a shortlist of (say) 3 possible vendors:
- Off-the-shelf vs Bespoke. Bespoke solutions always present the highest total cost of ownership and greatest risk of failure because they are created for a single client. Choose off-the-shelf solutions wherever possible; they are supported, upgraded and thoroughly tested before release.
- Base technology. You are probably going to look at some platform-based commercial CRM solutions, like Salesforce from a membership-specific partner, or a Microsoft Dynamics based provider, or a robust turnkey membership-specific solution, like iMIS. So start there.
- Maturity of cloud platform. In the modern world, cloud really is the only solution, but how mature is the cloud platform? Has it got a tested set of tools and APIs with a vibrant developer community? Can it connect easily to all the other web systems and manage single sign-ons etc? If you are using an app on top of Salesforce or Dynamics, how robust and mature is that app?
- Flexibility and self enhancement. Can you adjust it easily yourself, using tools going forwards. Will you be reliant on the vendor or partner to make costly changes?
- Community. What is the user community like? How well established is it and can you easily access and talk to other users?
- Partner landscape. Is there a network of qualified and experienced implementation partners for the solution. If so, it means that if you are unhappy with the vendor or partner’s services, you can easily find another partner to continue with in the ecosystem.
Tip 2 – The proof is in the pudding. Run a paid Micro-Project
I demo’d CRM systems for nearly a decade, and there is a huge degree of showmanship involved. As a procurer, you can rarely get to the detail you need in the allocated demo time. And even then, what you see is not always what you get.
A smarter way is to create a mini project for your prospective partners. If you want to know what it would be like working with someone – try working with them!
- Define a small but distinct piece of work. It should represent a challenging part of your requirements, but should not be a bespoke build piece, rather a configuration of the software. Set a budget and a vague spec. This is deliberate -you want to see how the partner helps you to clearly define things and then deliver.
- Experience working alongside them. How do they react when things go wrong? How do they uncover information, and how do they deliver against a budget?
- Pay for your prospect’s participation. Set up a reasonable fixed fee for the work. This means each vendor will give the same resources. Implementation teams, rather than sales teams, will do the work. It will still cost less than a full-blown tender process!
It can also leave you with a specific piece of work that can be reused in the implementation of the project. Suppliers may also give you another level of engagement when you pay them, as opposed to a non-paying tender circus.
Tip 3 – Select a Preferred Technology Partner Early
Choose a preferred partner to proceed with early in the process. If choice #1 does not pan out (yes, this happens), you have 1 or 2 more prospective partners lined up from the previous step.
Consider these things in your choice:
- This is not just someone professional at selling. Your staff need to work alongside them for a good many years if your organisation is to meet its goals. What is the rapport between your team and theirs like?
- Did they put project governance tools in place, even for this microproject? Would that scale to a full-blown implementation?
- How easy was it to collaborate and escalate with the partner? Were there clear channels of communication?
- Did the partner look beyond the current project? Did they get you thinking of the future and how your organisation could benefit from a long-term relationship?
- Was the partner able to challenge your business processes and suggest improvements based on their experience, and then put those into practice for your staff?
Next Steps
The next step of engagement starts once you have chosen your preferred partner. Now is when you can request a detailed project estimate. This phase is often called Discovery. Ask them to spend time showing you the system and how it would meet your organisation’s needs (as opposed to a sales demo), then identify where the gaps of functionality lie and how best to meet those gap-requirements.
Get to know what other organisations they have worked with in the past and, importantly, why they chose them and stayed with them.
This is by no means the only alternative to tenders – there are others out there, like Agile used for tendering process, or Is there an alternative to the traditional tender process?
We’d love to hear what you think about this. What is your biggest obstacle to successfully selecting a solution, and have you experimented with similar, more Agile forms of selection processes? What results have you seen?
We’d be happy to share more of our experiences or help you in your next selection adventure.
About the Author
Jyoti is Co-Founder and Chief Revenue Officer of Zentso. He has worked in the not-for-profit sector for over 25 years and is passionate about holistic thinking – both for organisations and individuals.