Who do you think completes your RFP/ITT anyway?

A recent robust debate on Linkedin has prompted me to collate some thoughts I’d had in my head for a while.

I don’t like RFPs/ITTs (insert your Country/Industry/Organisation TLA here).

First a few light-hearted observations from my life in the world of pay and HR software to help illustrate why, then some thought on the nature of ITTs/RFPs .

When you write an ITT (invitation to tender) for a new software system or service, did you ever stop to think about who completes the response when it arrives at the potential supplier?

Having worked for a number of software houses before moving on to concentrate solely on implementations and projects, I’ve seen the ITT process from the other side of the fence.

I used to train end users in a payroll system that was a product of one of the leading suppliers at the time.

On one course I had a group of trainees who made it quite clear they hated the system and felt it didn’t do anything they wanted.

At a coffee break I tried to gently enquire about the selection process. “Oh it took ages” was the response ”but in the end, all the demonstrations melted into one and we couldn’t remember which system did which – but we liked your Salesman the most”. That readjusted my view on the rigour of their selection process and made me more relaxed about why they had bought a system they hated.

One ITT from a government agency said that they had a policy of adopting the very latest technologies – but later on said they wouldn’t use any system that didn’t have five references from other similar agencies available – I wonder which agency they thought was going to be the first?

At the same company I used to get ITTs to respond to as I knew the product pretty well. After a while I reached a few conclusions about ITTs (and responders).

Questions on an ITT about functionality are open to interpretation. In addition; some are just plain silly – like the card they give you to fill in on the plane to the USA that asks if you are entering for the purposes of drug trafficking or terrorism – just as you are unlikely to say yes on that card; who in their right mind is going to say “no” or “does not satisfy” the requirement that their system is “user friendly” ? (I’m not kidding – I have seen this “requirement” on countless ITTs).

You should also bear in mind that no salesperson is going to talk the product down – why would they? Therefore you aren’t all that likely to get many “no” answers from Salespeople responding to an ITT.

If the salesfolk have given the ITT to someone else, then that person’s answers may be shaped by their own position in the Company; take this along with the fact that there is often not a simple yes/no to some questions (and that a perfectly innocent “yes” may still leave you thinking – “well yes it does that but not in the way I wanted/imagined”) and you will see that I think ITTs need to be used with care.

I used to think that those suppliers who just answered “yes” to everything were despicable – but looking back I’m wondering if it wasn’t better to get past the ITT stage and get to talk to the customer about what the product can really do.

I used to complete the ITTs with what I considered to be scrupulous honesty and care – but I now wonder if it was all worth it – apart from keeping food on the table at our house of course. I know that some of my “no” answers got changed to “yes” and there was nothing I could do about it.

We went through a phase of potential customers asking for the ITT to be written into the purchase agreement. I can see the logic (in theory suppliers would tell the truth if it’s contractual) – but when you think of the costs of legal action and the ability of the suppliers’ lawyer to argue questions were answered in good faith, it may seem a little pointless. It’s also not a great way to begin a supplier relationship.

In the end there are few things to think about – top of my list I have to ask this-

What do you hope to achieve from a new Payroll and/or HR System?

Unfortunately, this isn’t always clear – and when it is, the expectation of improvements may be based on a false premise. Very few organisations I’ve ever worked with are prepared to address their business process issues, even though doing so would save a lot of money.

A new system won’t solve a problem like payroll receiving late notification of events like an employee leaving. A slick system may make it easier to notify all the relevant parties, but if no-one enters the data in the first place, it’s a waste of cash.

You won’t get all your requirements. No off the shelf product or service is going to do everything you heart desires all the time – cars don’t, houses don’t, mobile phones don’t why should Payroll software?

Even if you did, get a “yes” to all your requirements – how do you know that how the system does things in a way that is going to actually suit you?

In any case, the first two points are largely academic because the truth is – you don’t know your requirements.

This is a question of degree; from organisations with a twenty year old legacy payroll system and no supporting documentation on how payments are actually calculated, to those with huge volumes of documentation about how payments are calculated and what process to follow to book time off, no organisation has a proper handle on it all.

Even if you do today; by tomorrow it has changed.

Just because it’s written down somewhere doesn’t mean anyone has ever read it or that staff members actually do it that way. By the time you have written the requirements down (or more likely done a copy and paste from a few other documents that no-one reads) they are at least partially out of date and inaccurate.

Providers don’t want to say “no”. Unless you are a notoriously scary organisation, most suppliers want your business, so they will do anything they can to justify a “yes” or “met” or whatever is on your ITT.

So with all that in mind, what can an ITT be useful for, and what’s a better way to get a system that will meet the organisation’s needs?

ITTs/RFPs can be good for qualifying suppliers – if your organisation has rules (most large ones do seem to) about the kinds of suppliers it deals with, then you can weed out suppliers that you can’t consider.

Similarly, for determining which general products and services a potential supplier might be able to offer, the ITT/RFP can determine this – for example, if you wish to take the system totally off-premise and a supplier doesn’t offer this, you can discount them.

For functionality, I am an advocate of a process advocated by Naomi Bloom here and a similar variant of which I have seen in use by Accenture. In short, the process involves determining some key functions that the business depends upon and writing scripts for them (I am summarising hugely for the sake of brevity). These can be used to examine not only what a product’s capabilities are but also the manner in which they are accomplished.

More Legislation - but Blink and You'll Miss it - CMEC

One of the many onerous duties that payroll departments perform on behalf of government agencies is the collection of money due for child maintenance or court orders. Needless to say, there is a set of arcane and labyrinthine rules to be followed.

The consequences of not deducting a court order can appear severe - a summons can be issued naming the payroll manager personally and demanding they appear and explain why. Thankfully this is rare.

Since everyone seems to recognise that the CSA hasn't really been working out, a new agency has been created. It's called CMEC. As such agencies do, they have decided that they want to make some changes to what is required of employers - and since many employers use payroll software, the implication is that the software providers will need to make changes.

CMEC published what they called "Business Requirements" on their site some time in July. Unfortunately I missed it at the time. Since then they have removed the document that had the requirements in from their website without explanation.

With any luck the requirements will be back soon. In brief they cover some new admin rules and a new method of reporting data - all to be in place by April 2011. They have apparently promised that the final requirements will be available to software providers by October this year.

Bonanza for Outsourcers?

Recent UK Government initiatives like RTI and Pensions Auto-Enrolment, coupled with a gathering momentum in US HR thinking (which tends to arrive here 12-18 months later) is leading me to see a potential future in which a much higher portion of Pension and Payroll Processing is outsourced.

The received wisdom in the US (and here) amongst many HR, finance and other business people seems to be that Payroll is not a function that has the potential to offer strategic advantage. It's a generic thing that can be done by outsiders without affecting the way the business operates or your "Employer Brand". I don't agree - but who cares what I think - that seems to be the way the wind is blowing.

Add to this the fact that in trying to simplify things, the Government is of course making them more complex, and you might forgive business people for running into the open arms of the outsourcers.

I hope I'm wrong about this - and I would encourage any organisation thinking of outsourcing to be very cautious and thorough as I've seen some examples where it didn't provide any of the intended benefits - but I can see a move to outsourcers in the future.

Pensions Auto-Enrolment

There is a lot of stuff on the net about this and how it’s a major change. For once, you do need to believe (some of) the hype.

It is a big deal and it will have an impact on Pensions and Payroll administration.

The requirement is that employers will soon need to enrol employees into a pension scheme as the name suggests, automatically. So far so good, but as with all things legislative, there’s a degree of complexity. For one thing, there’s a requirement to check earnings each period and determine if they are above or below a threshold.

In short, the requirements are going to affect both pensions and payroll administration functions and any systems they use.
Every employer needs to be thinking about how they will approach this – even if it’s just to pick up the phone to suppliers and ask “what are you doing about this”.