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10 Steps to Choosing the Best Offer for SAP Implementation

Analyzing responses to a request for proposal (RFP) should be a relatively simple task, but it often presents difficulties. Why does this happen?

The preparation of an RFP for a new project, especially a transformational one to S/4HANA, begins with identifying the key business processes covered by the project, both from a business and functional perspective. Business Process Owners (BPOs), who ensure the consistency of processes with other business areas, and key system users, who oversee the functionalities used daily, are involved in gathering business-functional requirements.

Both groups have habits related to the IT system (including SAP) setup in the organization, covering process flows, document templates, data flows, report formats, etc. They are generally skeptical of changes as maintaining the status quo seems easier. The preparation process for an IT system implementation involves defining business-functional requirements neutrally to extract the best from the considered options. Potential bidders may raise concerns about the level of detail of the requirements or need more information, prompting questions or a Technical Dialogue to clear up any uncertainties.

Why, then, do most tender processes struggle to compare offers and choose the best one? The primary reason is that organizations often want to transfer 1:1 functionalities of the current system to the new infrastructure, not considering that the new system offers more possibilities. Organizations find it challenging to transition from the known environment to the unknown, even if it’s a newer version of the system used. As a result, they cling to their habits and lack openness to change. While they declare readiness for change, in practice, they strive to maintain the status quo.

How does it look from the perspective of a bidder responding to an RFP? Most will assume: “This is what they want, so this is what they’ll get. We’ll execute the tender according to expectations, then thrive on CRs (Change Requests).” Few bidders dare to suggest stepping out of the comfort zone and say: “Hey! Some processes can be done differently, eliminating custom extensions, significantly reducing long-term system maintenance costs.”

This approach leads to a situation where the procuring entity receives offers that are not comparable. The same effects in IT systems (including SAP) can be achieved in different ways, and bidders approach the subject matter differently. Some adhere to the client’s habits, while others maximize the system’s capabilities and aim to apply standards.

In such a situation, the procuring entity has several options, usually choosing between two:

1. Analyzing offers based on the lowest price and discussing with bidders who declare meeting the client’s needs within the set budget.
   Organizing a Technical Dialogue with bidders and trying to align the offers to a common denominator.
2. Choosing the lowest offer carries the risk that the bidder lacks sufficient knowledge and experience to properly execute the task. A Technical Dialogue is a better solution but can be organized at the RFI level, examining the market before considering final offers.

Both options are costly, prolong the tender process, delay the benefit from the new solution, and increase team involvement, generating costs.

So, how to conduct the tender process correctly, cost-optimally, and select the best offer? Here’s a kind of decalogue for those responsible for preparing and executing tenders related to the implementation, development, or technical-functional maintenance of the SAP system:

1. Engaged Project Sponsor
   Every project should have a sponsor at the board level who is the face of the project in the organization, takes care of finances and resources, motivates the project team, implements changes, and makes key decisions.
2. Precise Definition of Strategic and Operational Goals, Including Functional Expectations
   Project goals should be well-known, understood within the organization, and transparently communicated to potential contractors. Without this, success is hard to achieve.
3. Collection of Existing System Documentation
   Defining the “zero point” at the project’s start is crucial. Knowing what we already have, the challenges we face, and what we lack while being open to changes that bring us closer to standard solutions is essential.
4. Establishing an Expert Team for the Tender and Ensuring Its Availability
   Internal experts responsible for the consistency and completeness of the RFP and evaluating the substantive value of the offers are needed for key project areas. They are also crucial in organizing the Technical Dialogue.
5. Technical-Functional Training and Workshops for the Internal Expert Team
   The team must have the broadest and most up-to-date knowledge of the new solution from the very beginning of the tender preparation.
6. Ensuring Objective Expert Support for the Internal Team
   In addition to training, securing the availability of external experts who bring knowledge and practical experience to help prepare RFPs and then understand and compare offers is beneficial.
7. Definition of Bid Preparation Guidelines for Potential Bidders
   The tender documentation should specify the offer structure to facilitate their comparison and organization.
8. Specifying Key Behavioral Aspects of Cooperation
   The organization should communicate its project methodologies, communication standards, and cooperation values from the start, asking bidders to refer to these expectations.
9. Definition of Objective Offer Evaluation Criteria
   The internal procedure for evaluating offers and selecting the best one should be clearly defined. The cheapest offer is not always the best.
10. Continuous Openness to Dialogue with Bidders
    Providing “consultation windows” at various stages of the tender process allows for clearing up any ambiguities.

According to Gartner, 75% of ERP projects fail: they exceed time, budget, or are executed improperly. Why is this rate so high? Implementing a system is a unique, unautomatable task. Therefore, good RFP preparation and proper offer analysis are crucial. The time spent on preparations before the project start is as important as the execution itself.

About the Author:
Michał Wierzbowski is an experienced SAP consultant, solutions architect, team leader, and consulting director. He supports major market players in their digital transformations, optimizing the use of SAP solutions, creating effective project teams, and representing them in negotiations with implementation partners. With nearly 20 years of experience in SAP, he helps clients maximize the use of resources, knowledge, and IT infrastructure.

Learn more about advanced SAP consulting at Awareson.