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Requests for Proposals (RFP)
TIS is known throughout the industry as the RFP experts. We have worked with corporations, mid-sized companies, colleges and universities, and not-for-profit organizations on RFP projects for 15 years.
Our experience in the field gives us a depth of knowledge and a wide range of banking contacts that enable us to:
- Identify problem areas quickly using current account analyses
- Evaluate the current banking structure
- Know where to get information
- Know what questions to ask.
Assistance for specific needs
Over the years we have identified critical points where companies and universities can benefit from outside help. One of these points is deciding if they should undertake an RFP project at all. Other organizations may be able to manage an RFP project themselves but can use additional expertise in evaluating bank proposals or in identifying problems in their current banking arrangements.
For many firms, using an outside firm to manage an RFP project is the only way it can be completed because the treasury staff is small. In some cases, the company feels that the TIS knowledge of banking services can be a valuable addition to its own experiences.
We work with our clients to provide them with the help they need. This can be very short-term consulting, consulting on a retainer basis, or long-term consulting engagements.
Why do an RFP?
Companies undertake RFP projects for a number of different reasons:
- They may be dissatisfied with the level of service provided by their current bank or banks. Often this is related to increasing bank fees.
- Some companies use periodic RFP projects as a way to control bank costs.
- A new bank calling with information about useful services not available at a firm's current bank may cause a firm to consider using a new bank.
- Mergers and acquisitions-on either the corporate or the banking side-often spur a company to reexamine its banking structure.
- Technology upgrades, such as new financial software or the installation of enterprise-wide information technology, are often the catalyst for the treasury function to restructure banking relationships at the same time.
- Certain organizations routinely put their banking services out to bid on a regular schedule, such as every three, four, or five years. This is more common in the public sector, where it may be required by statute.
What is involved in an RFP project?
Over the years, TIS has developed an effective approach to managing request for proposal (RFPs) projects. We provide as much assistance for each step of the RFP process as our clients wish. Our approach to RFP projects is structured around the following key activities:
An RFP project is a commitment
Doing a full-fledged RFP project requires a serious commitment in time and staff. Even if a firm hires outside help to manage the process, key treasury people, as well as other financial staff, will be required to spend time discussing their current operations and what changes they would like. They also will help prepare or at least review the RFP before it is distributed, and they will have to spend time reviewing the bank proposals, make site visits, and participate in bank presentations. It is not unreasonable for a full RFP project to take six months to a year until it is finished (see RFP timeline .pdf).
The TIS approach to RFP projects
- Analysis of the current situation
This normally begins with a review and evaluation of current banking services. The analysis includes: reviews of bank account analysis statements, interviews with key managers to identify current problem areas and new service possibilities, and further research to identify potential services.
- Definition of new services required
Based on further discussions with key managers, we formulate a new banking structure, if needed, and define the banking services to be included in the RFP. We also begin to collect volume/usage information.Back to List
- Selection of banks to receive RFP package
Our clients often have a long list of banks as a potential RFP group. We may suggest additions or deletions, based on our review of the current situation or if our clients feel they want to include new banks. We then work with our clients to pare the list down to a manageable number of banks to receive the RFP.
- Creation of the RFP package
When the banks have been chosen and the bank services to include in the RFP package have been agreed upon, we work with our clients to create the RFP document. This consists of relevant information about our client and its treasury structure, key dates in the RFP project, volumes for service activity, and the questionnaires for each service.
We start with our own tested questions and customize them for each client, creating new questions when needed. We also suggest weights for each question so that they can be scored using a response matrix approach during the analysis phase.Back to List
- Coordination with banks
During the project, we are available to handle the communications with the bidding banks. This reduces RFP-related work for our clients and enables them to focus on their normal responsibilities during the RFP project. It also insulates them from undue pressure from bankers.
We answer questions, provide guidelines, and supply information to the banks about the client's current or desired services. If our client wishes, we lead a question and answer session for all bidders before the proposals are due. All bidders are invited to this meeting, which allows the banks to ask questions and receive additional information for preparing their proposals.
- Analysis of bank proposals
When the proposals have been received, we and our clients analyze the responses. We do this quantitatively, using a response matrix. This approach uses assigned weights and a rating given by the reviewer to compute a numeric "score" for each bank for each service. We believe that this approach is an integral part of the analysis as it forces the reviewer to look at each bank's response closely.
The analysis often generates new questions for each bank. We normally coordinate with the banks to obtain their answers and work with our clients to reach consensus on the results.
In addition, we help our clients evaluate the bank proposals qualitatively, to see where there is a good fit between bank and client. In this stage we also help them check references.Back to List
- Final selection
Based on the analysis, we work with our clients to select a smaller group of banks - typically no more than three - that will be asked to make final presentations. Banks may also offer site visits at this time. Sometimes we accompany our client on visits; in other instances we coach our clients for the visit but do not go along.
After bank presentations and visits, we help our clients make the final decision. We also provide guidance and rationales for notifying each bank that submitted a proposal. In some instances we have also met with or spoken to bankers that were not selected.
- Post-selection support
At a client's request, we will review final bank service contracts to be sure that they conform to the terms of the proposal and any other final negotiations. On occasion, we have identified discrepancies between what was agreed upon via the proposal and what appeared on the legal documents. Our review can head off any difficulties at a time when everyone is suffering from RFP fatigue. We also provide coaching help to our clients to prepare them for final bank negotiations.Back to List
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