The Oracle RFP. Design it to create tension.

An RFP that names Oracle and asks for a quote produces a quote. An RFP designed to create genuine competitive tension produces a negotiation. The difference is in the design, and the buyer that designs the process well captures the value.

The request for proposal, the RFP, is one of the most powerful tools the procurement team has for an Oracle purchase, and its value depends entirely on the design. A poorly designed RFP that simply asks Oracle for a quote on a predetermined solution produces a quote with little competitive tension, and the customer captures little of the value the process can deliver. A well designed RFP that creates genuine alternatives, defines the requirements in outcome terms, and structures the evaluation to reward competition produces real tension, and the customer captures the value. The difference between the two is in the design.

This article walks through the Oracle RFP process design. The competitive framing and the credible alternative. The requirements definition in outcome terms. The evaluation criteria and the scoring. The negotiation that follows the RFP. The common design failures. The framework helps a procurement team design an RFP that creates the competitive tension the customer needs.

The competitive framing and the credible alternative.

The competitive framing is the foundation of the RFP's value, because the tension that drives the negotiation depends on the credibility of the alternative. An RFP that names Oracle as the only realistic option, that defines the requirements around Oracle's specific products, and that signals the decision is already made produces no tension, because Oracle understands it has no real competition. An RFP that presents a genuine alternative, whether a competing product, a different architecture, or a credible status quo, creates the tension that drives Oracle to compete on price and terms.

The credible alternative does not require the customer to intend to switch; it requires the customer to present a genuine option that Oracle must take seriously. The alternative can be a competing vendor, a re-architecture that reduces the Oracle footprint, a move to third party support, or a credible decision to defer or reduce the purchase, and the credibility of the alternative determines the tension. The customer that frames the RFP around a credible alternative creates the competitive tension. The customer that frames it around a predetermined Oracle solution forfeits the tension.

The structural response is to frame the RFP around a credible alternative, creating the competitive tension that drives the negotiation. The buyer that presents a credible alternative captures the tension. See the sourcing procurement pillar and the competitive quotes article.

The requirements definition in outcome terms.

The requirements definition determines whether the RFP allows genuine competition, and defining the requirements in outcome terms rather than product terms is essential to the competitive process. An RFP that specifies the requirements in terms of Oracle's specific products and features, the named database options, the specific Oracle modules, locks the requirements to Oracle and prevents genuine competition, because only Oracle can meet requirements written around Oracle's products. An RFP that defines the requirements in outcome terms, the business capabilities, the performance needs, the integration requirements, allows multiple vendors to compete.

The outcome based requirements definition requires the customer to understand its actual needs, the business outcomes it requires, rather than the specific products it currently uses, and the translation from products to outcomes is frequently the hardest part of the RFP design. The customer that defines its requirements in outcome terms opens the process to genuine competition, and it frequently discovers that its actual requirements can be met in ways it had not considered. The requirements definition is the foundation of the competitive process.

The structural response is to define the requirements in outcome terms, opening the process to genuine competition. The buyer that defines outcomes captures the competition. See our new license procurement service and the procurement documentation standards article.

The evaluation criteria and the scoring.

The evaluation criteria and the scoring determine how the RFP responses are assessed, and a well designed evaluation rewards the competition the RFP creates. The evaluation criteria should weight the factors that matter to the customer, the total cost over the contract life, the fit to the requirements, the contract terms, and the risk, and the scoring should be designed to distinguish the responses on these factors. An evaluation that weights only the headline price misses the total cost and the terms, and an evaluation that weights subjective factors heavily can undermine the competitive discipline.

The scoring should be designed before the responses arrive, so the evaluation is disciplined rather than reverse engineered to support a predetermined choice. The customer that designs the scoring in advance, that weights the factors that matter, and that applies the scoring consistently maintains the competitive discipline of the process. The customer that designs the scoring after the responses arrive, or that allows the evaluation to drift toward a predetermined choice, undermines the competition. The evaluation criteria and the scoring are the discipline of the process.

The structural response is to design the evaluation criteria and the scoring in advance, weighting the factors that matter and applying the scoring consistently. The buyer that designs the scoring maintains the discipline. See the Oracle Negotiation Playbook white paper and the database licensing deal type page.

The negotiation that follows the RFP.

The negotiation that follows the RFP is where the competitive tension the RFP created is converted into value, and the customer must design the process to carry the tension into the negotiation. The RFP responses establish the competitive baseline, and the negotiation that follows should use the baseline to drive the terms toward the customer's position. The customer that runs a competitive RFP and then negotiates only with the incumbent, abandoning the alternatives, loses the tension the RFP created. The customer that carries the competition into the negotiation captures the value.

The negotiation should maintain the credibility of the alternatives through the process, keeping the competing options live until the terms are settled, so that Oracle understands the competition remains real. The customer that allows Oracle to understand the decision is made, that abandons the alternatives before the terms are settled, forfeits the leverage the RFP created. The customer that maintains the competitive tension through the negotiation captures the value of the process. See the competitive quotes article.

The structural response is to carry the competitive tension into the negotiation, maintaining the credibility of the alternatives until the terms are settled. The buyer that carries the tension captures the value. See the renewal negotiation service and the Oracle Database product page.

The common design failures.

The common design failures in the Oracle RFP are predictable, and the customer that understands them can avoid them. The most common failure is the RFP that signals the decision is already made, that names Oracle as the only realistic option and asks for a quote, producing no tension. The second is the requirements definition written around Oracle's products, locking the requirements to Oracle and preventing competition. The third is the evaluation that drifts toward a predetermined choice, undermining the discipline of the process.

The fourth common failure is the abandonment of the alternatives before the terms are settled, signalling to Oracle that the competition is not real and forfeiting the leverage. The customer that designs the RFP to avoid these failures, that frames a credible alternative, defines outcome based requirements, designs disciplined scoring, and maintains the competition through the negotiation, captures the value the RFP can deliver. The common failures are avoidable, and avoiding them is the difference between an RFP that produces a quote and one that produces a negotiation. See the procurement compliance article.

The structural response is to design the RFP to avoid the common failures, framing a credible alternative and maintaining the competition through the process. The buyer that avoids the failures captures the value. See the sourcing procurement pillar for the broader framework.

Designing for competitive tension.

The Oracle RFP delivers value when it is designed to create genuine competitive tension, and the design is the difference between a process that produces a quote and one that produces a negotiation. The competitive framing, the outcome based requirements, the disciplined evaluation, and the negotiation that carries the tension each contribute to the value, and the customer that designs the process well captures the saving the competition makes possible. The RFP that names Oracle and asks for a quote produces a quote. The RFP designed for competitive tension produces the value the customer needs.

For the broader framework see the sourcing procurement pillar and the procurement compliance article.