REQUEST FOR PROPOSAL

Implementing an RFP Process to Reduce Cost, Channel More Dollars to Ministry

SOME BACKGROUND: GOING “LEAN”

• Business embraced Lean Enterprise in 80-90’s

• Simple math…– If company makes 5% profit margin…

– Have to sell $20 to make $1 more in profit…

– Lots of external influences on sales…

– BUT spending and efficiency in direct control

• Conclusion: Cost reduction must be core focus

POWER OF PARTNERSHIP

• Every organization relies on outside parties

– Service Providers

– Material Suppliers

• These vendors are a key component of Lean

– They possess knowledge and skills we do not

– They know best practice to be more efficient

ENTER “REQUEST FOR PROPOSAL”• Request for Proposal (RFP) is a

tool in your negotiation toolbox– Reserved mostly for large scale /

complex business opportunities

• Documented offering to potential Business Partners– Business available– Desired outcome(s)

• More than “low bid wins”– Seek solutions and value

ONLY FOR BUSINESS…RIGHT?

• Your church can benefit from “Lean Thinking”– Every organization has inefficiencies

– Market conditions, technology change constantly

• Are the savings really meaningful?– PCC has saved almost $100K*

– Average per capita giving like 100 more attendees

– For a church of 600 that’s like growing 17%!!

*Your mileage may vary

CONCEPTS SOUND FAMILIAR…?• Parable of Talents

– God gives us resources• Including the talents of our

business partners

– He expects us to be good stewards of His resources

• Parable of Lost Coin– When something valuable is

lost stop at nothing to find it– You have “lost” resources

that could be used for ministry…GO FIND THEM!

LET’S GET STARTED!

THE PROCESS1. Identify targets

2. Compose RFP

3. Select Participants

4. Distribute RFP

5. Follow-up

6. Decision / Award

STEP 1: IDENTIFY RFP TARGETS• Run report: last fiscal year

vendor payment summary

• Survey staff and ministry leaders @ poor performance and/or perceived poor value

• Look for opportunities to bundle

• High dollar and/or high complaint gets first attention

STEP 2: COMPOSE RFP

• Introduction

• What’s on the table

• Desired outcome(s)

• Proposal format

• RFP Timeline

STEP 3: SELECT PARTICIPANTS• First Pass Long list

– Peers– Blue Pages– Angie’s List– Church Leadership– Word of mouth

• Narrow to Short List– Who truly has resources,

reputation, experience to handle your business?

STEP 4: DISTRIBUTE RFP

• Contact the vendors on Short List– If not given specific contact name during STEP 3

due diligence ask for owner or sales contact

• Conduct brief telcon, review RFP at high level

• If interested schedule 30 min onsite– Review RFP in more detail

– See your business opportunity in person

STEP 5: FOLLOW-UP

• Encourage RFP participants to ask questions– If they identify a major gap in RFP information be

sure to share the info with all participants

• Touch base with participants at halfway point of timeline– Questions? Moving forward?

• Countdown: 3 day, 1 day deadline reminder

STEP 6: DECISION/AWARD• Honor your deadline

– No extensions unless all

• Review proposals and award business ASAP

• Once deal is done, notify others via telcon– Professional courtesy– Give constructive feedback

THE PROCESS

1. Identify targets

2. Compose RFP

3. Select Participants

4. Distribute RFP

5. Follow-up

6. Decision / Award

REAL LIFERFP EXAMPLES

MULTI-FUNCTION COPIER RFP• PCC CONCERNS:

– Machine reliability, slow service response

– Cost of unused contract copies, uncontrolled color copies

• Winning Partner Solution:– Reduce lease $$ / month + rollover contract copies

– Default B/W copies, login for color copies

– Include used machine for Family Ministry Office

• Outcome: $4250 savings / year + soft costs

COMMUNICATIONS RFP• PCC CONCERNS:

– Biz spread across four separate vendors• No buying power = poor accountability, perceived high cost

– Bandwidth needed for administration and guest wifi

• Winning Partner Solution:– Bundled business to meet “national account” status

• Outcome: one call for service issues + 5x internet bandwidth + $540 per year savings!

REFINANCE RFP• PCC CONCERNS:

– Interest rate well above market– Admin burden @ reporting – Minimum account balances– Severe penalties for early payoff

• Winning Partner Solution:– Incumbent refi at low APR, removed contractual strings

• Outcome: $26K annual savings + accelerated principal paydown + significantly reduced admin burden

CLOSING THOUGHTS

AKA HELPFUL HINTS TO MAKE YOUR RFP’s A RESOUNDING SUCCESS!

HELPFUL HINTS• If RFP target under contract:

– Beware auto-renewal language

– Put expiration tickler on calendar

– Ask current partner to help you reduce cost / improve value

• Avoid low value targets– RFP’s take time…get good return

on your time invested

HELPFUL HINTS• Write your RFP in MS Word or

Powerpoint, distribute as PDF

• Submittal deadline MON 8am– Gives overworked owner / sales rep

weekend to complete

• Avoid “pencil sharpening” rounds– Wastes time, undercuts credibility

– Require best proposal from get-go

HELPFUL HINTS• If high dollar / high impact decision:

– Assemble a Project Team (you plus two) to spread work and gain leadership buy-in

– Include a Decision Making Matrix in your RFP construction (another valuable tool)

• Beware Insider Trading– If you want companies to give their best

offer, give them fair shot to win

– Doing business with church members can be a risky proposition

– If awarded, schedule regular reviews and keep them accountable to RFP parameters

THANKS FOR BEING HERE!

QUESTIONS???

MY CONTACT INFO:Greg Wells, Manager of Operations

Parkside Christian ChurchCincinnati, OH

Email: greg@parksidechristian.comTwitter: @gregwellsOH

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