Developing an Effective RFP For the New Environment

Delivering Client Value Through Expert Market Research and Custom Consulting To End Users, Channel Partners and Manufacturers

Market Intelligence and Analysis Programs

ProfessionalServices

• IntelliCom Market DashboardSM • IntelliCom Market Performance DashboardSM

• IntelliCom Intelligent EndpointsSM Database• IntelliCom Managed, Hosted, Cloud Services Database

• Market Demand Drivers

• Disruptive Technologies and Application Assessments

• Service Attach Rates

• Forecasting & Opportunity Assessment

• Customer Needs Analysis

• RFP Develop & Proposal Evaluation

• Contract Negotiation

• Strategic Alliances with Voice Report, TMC and InfoCom

Manufacturer Channels SMB / Enterprise Users

Agenda• This session will draw upon the latest IntelliCom Analytics market research and

experiences regarding the construction of an effective RFP for the evolving communications environment.

• Background… the Evolving Communications Environment

• Key points to be addressed… from the End User Perspective: – Typical end user participants in the process – Information sources for the requirements– A crisp and effective RFP format– Essential information for the RFP supplier recipients– Guidelines for the RFP supplier recipients– Striking the balance between too much vs. too little detail– Dealing with questions from the RFP supplier recipients– Techniques to facilitate proposal evaluations

Agenda (Continued)

• Proposal / supplier evaluation criteria and weightings– Knowledge of the customers business – Proposed “Solution Fit”– ROI and TCO– Proposed solution roadmap and enhancement path– Supplier service, support, project management capabilities and

resources – Supplier financial stability– Financial assistance– Channel partner and manufacturer references and reputation– SLAs

• End user communication with the winning and losing suppliers

Background… The Evolving Communications Environment

• Average Life-Cycles Of TDM vs. Converged Systems

• Five Basic Conditions That Drive Businesses to Install New, Replace or Upgrade Telecommunication Systems

• Multiple Telecommunications Manufacturers in a Typical Enterprise And Mid-Size End User Base

• High-Level View of Telecommunications Station Equipment Shipments into the U.S. by System-Type

Background

The Typically Long Product Life Cycles of TDM Telecom Systems Are Changing As Convergence Proliferates

2% 2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

TDM Systems

Telephones

Network

Eqmnt.

Stora

ge Devices

Servers

/ PCs

Software

Per

cen

tag

e o

f R

esp

on

den

ts

Over 7 Years

5-to-7Years

4-to-5 Years

3 Years or Less

57%

41%

60%

35%

55%

38%

42%

49%

43%

41%

29%

29%

3%

5%7%

9%

34%

7%

8%

Five Basic Conditions Drive a Business to Install New, Replace or Upgrade Telecommunication Systems

1) Greenfield Opportunities• Opening New Business

2) Real Estate-Related Events

• New Location / Relocation• Renovation

3) Existing System Deficiencies

• Limitations in Feature / Function / Capacity• Reliability• Manufacturer Discontinues Production and / or Support

4) Financial Factors

• Lease Expiration

5) New Business Improvement Applications… Enabled by IP Technology

• Measurable Employee Productivity Gains

• Collaboration Capabilities: Messaging, Presence, Mobility, Video

• Improved Customer Service / Satisfaction

• Expense Reduction / Avoidance / Containment

• Business Competitive Advantage / Differentiation

Five Basic Conditions Drive a Business to Install New, Replace or Upgrade Telecommunication Systems (continued)

Most Large and Medium Sized Businesses Have Telephone Systems From Multiple Manufacturers in Their Base… However This is Changing

TDM System Decisions Were Made On A Site-By-Site Basis… Converged System Decisions Are Typically Made From A Corporate Wide Perspective

Large Size Businesses % of Businesses – 1 System Manufacturer – 2 System Manufacturers – 3 System Manufacturers – 4 System Manufacturers – 5-Plus System Manufacturers Medium Size Businesses – 1 System Manufacturer – 2 System Manufacturers – 3 System Manufacturers – 4 System Manufacturers – 5-Plus System Manufacturers

35% 32% 25% 7% 1%

% of Businesses

41% 30% 21% 8% 0%

Source: Survey of NNJTG Member End User Companies, July-August 2010

End User Demand For Converged Telephony Solutions is Steady Excessive Oversupply During The 1996-1999 Period

IP Telephony Is Accelerating Base Churn…. But Challenges Include:– Tight IT Budgets For Many End User Companies– Understanding How Applications Can Improve Business Productivity

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12

Converged*

Centrex**

KTS

PBX

Enterprise Communications ShipmentsTotal Stations Lines Shipped; U.S.

Normalized Average Growth

Source: IntelliCom Analytics; IntelliCom Market Performance Dashboard & Other Research Databases

* Includes all IP Telephony lines, including IP equipped lines of IP-Enabled and Converged Systems, all IP-PBX lines, and those offered as Managed / Hosted Services

** Reflects shipments of traditional Centrex offers; IP Centrex and IP lines offered as Managed / Hosted Services included in Converged

Today

Typical Participants in the Process

Large and Mid-Sized Companies Are Increasingly Using Project Teams to Select New Communications / Collaboration Solutions

Information Technology

Information Technology

Business Units

Business Units

Finance /Accounting

Finance /Accounting

Purchasing / Legal

Purchasing / Legal

Ease of Migration

Manageability

Scalability

QoS & Reliability

Fit & Reliability

Differentiation

Productivity

Business Impact

Applications

Financing

Budgeting

ROI / TCO Terms & Conditions

The Solution Selection Criteria Used By Most End Users Typically Fall Under These Four Major Areas

Financial Health / Stability R&D Investment Reputation Resources / Technical Competence Business Knowledge Responsiveness Flexibility Customer Friendliness

Current Needs Projected Requirements Technical Longevity Business Productivity / Customer Service

Impact

Initial Acquisition Cost On-Going Expenses (TCO) Warranty Coverage Cost Reduction / Avoidance / Containment Measurable Benefits Return On Investment (ROI)

Installation Capabilities Service & Maintenance Remote Diagnostic Tools Network Audits Training Geographic Reach Single Point Of Contact Professional Services

Manufacturer / Channel

TCO / ROI Factors

Customer Support

Proposed Solution Fit

Information Sources and Requirements for the Communication Solution

Critical Functions ExecutivesPower Users• Customer Service• Sales• Marketing• Information Technology• Security• Legal

• Senior• Middle-Management• Executive Assistants

• Revenue Generators• Mobile Employees• Remote Workers• Users With High-Tech Needs

Identifying, Qualifying, Quantifying And Articulating the Current and Evolving Needs and Expectations of These Users Will Facilitate the Development of an Effective RFP

RFP Format and

Contents

Use Of RFI’s and RFP’s By SMBs And Enterprises

►Request For Information (RFI)

• Effective approach to assess supplier interest and capabilities to address requirements

• Typically less formal than a Request For Proposal (RFP)

• An approach to develop / refine a “short-list” of supplier RFP recipients

►Request For Proposal (RFP)

• Typically more formal and detailed than a Request For Information (RFI)

• Effective approach to determine the best supplier, solution, service and pricing

►Usage Trends

• RFPs used much more than RFIs…about a 10-to-1 ratio • RFPs and RFIs used more by Enterprise and Mid-Market…rather than Small organizations• Many suppliers state that RFPs are used to solicit proposals in approximately 50% of

their sales situations• RFPs are almost always used for Government, (Federal, State, Municipal) and Education

verticals

Selection Process , Criteria and Weightings

Format And Critical Dates

A Crisp And Effective RFP Format Striking the Balance Between Too Much vs. Too Little Detail

Supplier Information And Qualifications

RFP Guidelines

Introduction and Background

Resources and Tools

Financial Stability

References

Geographic Presence and Reach

Technical Specifications, Requirements and Expectations

General

Architecture

Features / Functions

Applications

Pricing

+

Terminals / Endpoints

Company History

Other Important Information: - Confidentiality - Disclaimer - Contract

• Capital Expense• Operational Expense• Training• Other Expenses

An Effective Format For RFP’s…From The End User Perspective

►Introduction and Background

• An overview of the company

• Company values and differentiators

• A brief description of the conditions that triggered this RFP

• The goal to be realized and / or objectives to be attained

►RFP Guidelines

• Format to be followed

• Compliance requirements

• Critical dates to be met

• Confidentiality

• Selection process…who’s involved, selection criteria, weightings

• Supplier alternative recommendations

An Effective Format For RFP’s…From The End User Perspective (Continued)

►Supplier Background Information

• Business description

• Executive and Senior Management profiles

• Supplier values, specialties and differentiators

• Staffing resources, tools and certifications

• Escalation process

• Products and services offered

• Geographic reach

• Financial health

• References

• Testimonials

• Awards

An Effective Format For RFP’s…From The End User Perspective (Continued)

►System / Solution Requirements And Specifications

• Overview

• Locations To Be Served

• Current And 5 Year Growth Projections

• Detailed Specifications

• Architecture

• Applications

• Station Equipment / End Points

• Attendant Consoles

• Power

• Wiring

• Administration

• Integration

• Interfaces

An Effective Format For RFP’s…From The End User Perspective (Continued)

►System / Solution Requirements And Specifications

• Installation

• Maintenance

• Service And Support

• Training

• Documentation

• Pricing

• List Pricing

• Applicable Discounts

• Other Incentives

• Leasing Options

• Financing

Communicating With Winning And Losing Suppliers

► The Losing Suppliers

• Strengths

• Limitations

• Appreciation

► The Winning Supplier

• Strengths

• Limitations

• Next steps

Q & A

Thank You!