Top 10 Most Common E-Commerce Platform RFP Mistakes
When seeking an e-commerce platform, a comprehensive request for proposal (RFP) that thoroughly covers all the critical points can assist retailers in reducing costs and producing better return on investment. If a RFP helps a management team reach a final decision in 12 weeks rather than 16 weeks, an additional month of revenue may be added to the bottom line from the e-commerce channel. This could translate into hundreds of thousands of additional revenue. A well-crafted RFP can also ensure that a company doesn't pay a premium for features it won't need for the foreseeable future.
Given the importance of the e-commerce platform RFP process, there are pitfalls retailers need to avoid. Here's a list of the top 10 most common mistakes:
- Wording questions in a way that enables the vendor to "spin" or obscure the truth: Be as specific as possible with your initial round of questions, and be prepared to engage in a follow-up dialog to probe for more in-depth answers.
- Taking the short view: Retailers should look four years to seven years into the future when considering their next e-commerce platform.
- Trying to be too impartial: Some companies refuse to conduct in-depth discussions with vendors prior to issuing a RFP. Pre-RFP discussions are critical to producing a well-rounded RFP that meets long-term needs.
- Leaving the RFP process to the procurement department: If the information exchange related to the RFP is the exclusive domain of the procurement group, companies will miss many opportunities for valuable dialogs with industry experts who are able to provide insight into the future technology needs that companies haven't yet anticipated.
- Not having a budget before issuing a RFP: If your company doesn't have a budget, it should first complete a high-level request for information or engage an industry analyst.
- Not involving all stakeholders: The RFP should answer questions from all of your company's stakeholders, including the business owner, IT, operations, marketing, channel management and anyone else that will interact with or be directly affected by the new platform.
- Not asking questions that can be easily compared: Consider phrasing questions in such a way that the answers can easily be compared across vendors — e.g., "Is the platform written on a single code base that's an open-industry standard, one, two, three or four?" One is no, four is yes. Two and three are in-between. Once they've been forced to provide a comparable answer, it's advisable to allow the vendors to explain their answer in a more free-form fashion.
- Not doing sufficient due diligence: Consider speaking to analysts or consultants to determine which vendors might best fit your needs.
- Inviting too many vendors to bid: Sending a RFP to a laundry list of vendors can result in confusion and a slow selection process. Due diligence should be completed up front before two or three appropriate bidders are invited to respond.
- Ignoring the people aspects: Don't underestimate the importance of the people you'll be working with to structure the deal, implement the solution and/or arrange for customizations. Will your company's internal implementation team have an easier time working with a Fortune 500 vendor or a smaller, possibly more agile vendor? Will it want to talk to project managers and solution engineers dedicated to their engagement or also have access to and the participation of C-level executives, which may not be possible with a large company?
Taking these common missteps into consideration will help companies approach the RFP process productively, helping them craft RFPs that are best suited to their particular needs. By asking the right questions, you'll be able to select the e-commerce platform that meets — and likely exceeds — present and future requirements.