Sending out a Request for Proposal — an RFP — is what most companies do when they’re looking for a technology solution. But what if instead of a Request for Proposal, the RFP became a Request for Partnership, as my friend Kate Vitasek from the University of Tennessee suggested several years ago? It seems like companies are starting to move in that direction, viewing and evaluating providers of technology not as prospective vendors, but as prospective partners.
What factors are driving this change? What’s required to establish a strong and effective partnership? How is the software-as-a-service (SaaS) model aligned with this partnership approach?
The Evolution of Relationships
I began my interview with Josh by asking him if he also sees this trend of companies seeking partnerships with their technology providers, and if so, why he thinks this is happening. “Companies have been around the block already with SaaS deployments, which have been out there for over 20 years, and they have learned from this experience,” said Josh. “They realize they need to get more from a software provider relationship.”
“Another factor is the evolution of software across multiple applications,” added Josh. “There is a balancing out of features and functions across vendors — down to the second, third, and fourth levels of functionality — and people are starting to look beyond that to see how they can get more out of these relationships long term.”
Simply put, companies are looking for ways to achieve higher levels of value from their technology provider relationships, especially as there’s greater feature-function parity across providers.
Looking to the Future
As the marketplace continues to evolve more rapidly, and as software applications become more robust, companies have begun to understand that simply matching features/functions to current needs through traditional RFPs is fool’s gold. What is really needed is the ability to quickly adapt and innovate in order to address future needs and conditions we don’t yet know about.
As an example, Josh notes that, “Over the past few years there has been the convergence of transportation management, where multiple modes have been brought together into a single platform. We are now seeing supply chain convergence, as well. Companies are being pushed to grow into new areas and they are looking for partners who can grow with them and react to the market environment with functional enhancements, as well as provide [a connected trading partner network] to maximize the value.”
SaaS vs. In-house
I asked Josh how SaaS relationships compared with in-house deployments in providing the partnership benefits we were discussing. “It’s right there in the name,” says Josh. “We’re all about service. Each month I send you an invoice that puts right in front of you what we are providing. Month over month, year over year, I have to demonstrate the value of the services we provide you or you can walk away. Thus, the SaaS model supports an active partner relationship.”
Josh also points out that the active partnership promotes discussions on long term goals and sharing of initiatives, as well as understanding the stresses and strains that partners are under. This allows better alignment of product goals with customer needs.
Josh says establishing a partnership starts during the sales process. “It’s not about selling a product,” he says. “It’s about getting to know the customer’s processes, what they are going through on a daily basis and what their goals are. The relationship is then cemented during the implementation process where you build trust through appropriately reacting to things that happen, whether good or bad. That carries into the long-term engagement by open and honest ‘top-to-top’ discussions about customer initiatives and technology roadmaps, even challenging each other’s perspectives. This may lead to altered roadmaps or the timing of customer initiatives so the partners can better align their goals.”
Traditionally, one of the concerns companies have had with SaaS is getting the features/functions they need in a timely manner if they’re using a single-instance, multi-tenant solution. Is this a valid concern?
Josh says this is more perception than reality, especially if you understand today’s software development process. “We’re on an agile two-week development cycle where we roll out new functionality to customers and seek their feedback. Together with our discussions of customers’ long-term goals and initiatives, this enables us to address customers’ changing needs. And by sharing our roadmap and engaging customers early in the development cycle, it gives them the ability to impact the development. This is a whole new way to develop software that meets customer needs.”
The Proof and the Process
It’s great to talk about the benefits of agile development, but the key is how this plays out in real-world partner relationships. Josh provided a number of excellent examples from their engagements to show how this works. I also asked Josh what questions a Request for Partnership should ask. (Hint: it’s about strategic alignment, not yes or no questions.) I encourage you to watch the full episode for all the details on these topics and more. Then post a question or comment and keep the conversation going!