Your RFP process….. it’s everything and nothing


On the 16th March this year, Andrew Bailey, Chief Executive of FCA, gave a speech at a conference for Independent Non Exec Directors in Hong Kong. It was interesting, if a bit cerebral in places. What was very significant was the title – “Culture in financial institutions: it’s everywhere and nowhere”*.

In order to explain the title of his speech, Mr Bailey said that “people ask if Culture is an ‘input’ into behaviour in firms or whether Culture is an ‘output’ from behaviour in firms?

He was very clear in answering this question, in his opinion, although Culture does drive behaviour, is it important to focus on the fact that Culture is defined and derived and therefore changed by behaviours and conduct.

Culture is therefore “a summary indicator of the consequences, including behaviour of many inputs.”…… and that …….“almost everything that goes on in an institution affects its culture.”…….but ……..“You can’t take institutional culture down from a shelf and seek to change it in some mechanical way.

He also lists a summary of the ‘contributory forces’ that affect Culture:

  • the structure and effectiveness of management and governance
  • including the well-used phrase ‘the tone from the top’
  • the incentives they create
  • the quality and effectiveness of risk management
  • the willingness of people throughout the organisation to enthusiastically adopt and adhere to the tone from the top.
  • adherence is crucial: actions really do speak louder than words and are at the heart of how we judge the intent towards good outcomes and thus culture.

He also highlighted that “A question that FCA seek to answer is whether practices such as recruitment, performance management, reward and capability drive positive behaviours and create a culture that works in the long term interests of the firm, its customers and market integrity.

It is for firms to ensure that their desired culture is consistent with appropriate conduct outcomes, to identify the drivers of behaviour within the firm and control the risks that these drivers create.

The answer is not to try to tackle the culture, but to act on the many things that determine it, of which governance and remuneration are important.

Apologies for simply quoting quite large segments of the speech but I think the fact that the CEO of the FCA is majoring on these themes and being very specific about what they are looking for is significant. That he is drawing direct links between their strategic priorities and specific areas of interest to us such as ‘performance management’ and ‘capability’ is also very important.

This should help us to secure priority and focus resources and attention on these areas and Training and Competence within our firms.

My company, Redland Business Solutions, develops and sells software solutions, designed to help firms to mitigate people and conduct risks in their operations and deliver cost savings and operational efficiencies.

If your firm is considering the benefits of a technology solution to help with Performance Management or Training and Competence or Senior Manager Regime or Certification, at some stage you will probably go through a formal procurement process which will include a ‘Request for Proposal’ (RFP) stage.

Solutions to these needs are what we supply and consequently we receive lots of these RFPs.

The general effectiveness of the RFP process and how it helps (or doesn’t help) firms select the best supplier and the best solution varies enormously and I would like to share some examples of good practice and suggest ways to use the process to promote the narrative of good culture within your firm.

It is vital that the key business teams talk and meet with suppliers to properly understand that the potential solution will succeed!

Assuming you are considering a project to implement a solution, what is the best way to go about selecting the most appropriate one?

In many firms there is a central procurement team who will get involved and manage the formal process of comparing and selecting suppliers and solutions. Often the RFP has many objectives, and tries to achieve several things:

  • Define the ‘scope’ of the intended solution
  • Defines a set of ‘requirements’ which can encompass
    1. Business and Functional
    2. Technical
    3. Operational
    4. Key assumptions to be made
  • Overview of the formal Procurement process, including timeline
  • Scoring and evaluation criteria
  • Any Contract requirements or restrictions

Potential suppliers are asked to complete the RFP in some detail and provide answers to the questions asked, such as:

  • Confirm degree of support for each of the Requirements, often including some description
  • Supplier details and overview to facilitate the start of potential Due Diligence processes
  • Technical details, including:
    1. Security and Information control
    2. Architecture and Hardware requirements
    3. Support and Maintenance

The result is usually a significant process and requires a lot of effort for suppliers to complete and accurately answer and even more effort for the business and procurement teams at the firm to assess, understand and score the results.

Obviously, much of this information exchange is important and needs to take place but this formal process often prevents customers and potential suppliers from actually engaging with each other and achieving an understanding of how well the solution fits.

It is vital that the key business teams talk and meet with suppliers to properly understand that the potential solution will succeed!

It is also critical that senior sponsors of these programmes engage in the process and meet with suppliers to explain what it is that the programme needs to deliver to be considered a success.

We see dozens of RFPs from many different firms with, it would be fair to say, with very varied degrees of quality. In one recent example, an RFP contained 24 different sections and over 900 detailed questions and requirements. I think I would challenge any firm to successfully analyse those responses to form a coherent assessment of the best solution!

The following is a list of 10 things to consider to make your RFP process more successful:

  • Separate the formal information exchange required for Due Diligence from the Functional and Business Requirements
  • Ensure the process allows time and space for the business teams properly engage with the supplier and the solution
  • Allow enough time for some detailed demos – 1 hour or even 90 minutes is not very long. When you’re selecting a solution you will probably be using for key operational processes for several years, making 3 or 4 hours available for a good, in-depth review is more than worthwhile
  • Ask open questions about how supplier works and their plans for the future. For example, their strategy for developing and maintaining the product?
  • Seek opinion and advice from suppliers – suppliers are experts in their solution and have probably seen it implemented in many ways, in many firms. Ask them how they would use their system to support your policies and strategies? Give them some problems to solve.
  • Think about the life expectancy and the cost of ownership of the solution. How many different versions of their system are suppliers maintaining? Support for technology developments, like Windows 10, Tablets important. It is critical to know if you are at risk of subscribing to what might become a ‘burning platform’ or legacy system in the future.
  • How mature is their solution? (in some cases, ‘Does it really exist’?) Many suppliers are guilty of demo’ing ‘smoke and mirrors’ when it comes to sales presentations. Also, allow time to take out References. Check with other firms similar to yours what their real experience of using the solution is like.
  • Clearly set out what your requirements are but also what your strategic objectives are. It adds great clarity to the process if the suppliers are informed that this initiative needs to deliver against a clear set of business goals.
  • Despite intending to address the same requirements, most suppliers use different language and the structure and the way they describe their solutions is very different. This makes direct comparison between responses very difficult. To help with this, plan Q&A discussions following responses.
  • Allow discussions to resolve differences in working assumptions, one supplier might quote £100K and another £20K for what should be the same thing. One is probably not ‘trying it on’, they have probably misunderstood the requirements or made the wrong assumptions.

We have some vanilla flavoured, generic RPF Business Requirements templates covering both traditional FIT and T&C, and SMR and Certification, intended to help firms with this stage of their process. Please get in touch if you would like copies.

Your corporate culture will influence how well this procurement process works but this process will also acts in significant ways to influence and shape your culture.

At a recent conference, one speaker talked through their experience of implementing their SM&CR solution. At the outset they gave the programme to the Head of HR because it primarily looked like a ‘HR initiative’. A few months in, it was clear that it was not working and as a result, a member of the Executive took it over and completely reorganised.

By giving the programme the right imperative and priority and the right ‘tone from the top’, it was possible to deliver some organisational changes, some investment in systems and some shift in attitudes and behaviours. Anyone from the regulator who subsequently comes looking will very clearly find the focus and emphasis that this firm has placed on delivering SM&CR and that they are prioritising on getting ‘Accountability’ right.

I am not trying to suggest that the only way to deliver SM&CR compliance and to evidence that your firm is prioritising the right Culture is to undertake an RFP to buy a system, by any means. However, where your response to the strategic changes across Culture, Conduct Risk, Performance Management, SMR or Certification does consider the business case and a potential RFP for a solution, ensure that the ‘link’ is clear.

If your Culture is ‘everywhere and nowhere’, your RFP process is ‘nothing and everything’ – in isolation it could easily be ineffective but if promotes sufficient time and attention and delivers the right outcome, it could do a lot to evidence the importance your firm is placing on getting this right.


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Carl Redfern is the Compliance Director and co-founder of Redland Business Solutions, the market leader in specialist GRC Solutions for the Financial Services industry, for the past 15 years I have spent my time: • Working with Industry Forums, Professional Bodies and Regulators to help to assess the impact and define the requirements of developing regulation. • Designing solutions to support key strategic functions within Compliance, T&C, Conduct Risk, Governance and Operations. • Helping businesses to develop the business case for people, culture and conduct initiatives. Most recently, I have been extensively involved in the development of the SM&CR regimes, working with industry bodies, both regulators and many firms, assessing the implications of the rules and designing specialist solutions to enable efficient and effective implementation. Redland have been voted the Best Solutions Provider – Senior Managers Regime with our specially designed technology solution, Insight SMR, to help firms comply with SM&CR and holistically integrate Certification with wider Culture and Conduct programmes.

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