Preparing responses to RFPs (Request for Proposal) can be an interesting affair. RFP’s here have nothing to do with the RFP for the SMTP protocol. For Indian service companies, RFPs decide their financial fate. Sales folks live and die by their RFP successes and failures.
Traditionally, most outsourcing deals have been small. For a $50 million per year run rate company like mine, a $2 million RFP is a fairly large deal, $10 million is a blockbuster. Why, even for the biggies, the infosys and the wipro’s of the world, most of their deals are the small ones, the $2 million ones. And despite their size, a $10 million deal is still a pretty big hit. You see there isn’t a single indian company yet in the league of an Accenture or an EDS. Profits wise, yes, but not in terms of revenue (though at least a couple will get there eventually), and more importantly, not in terms of the capacity/bluster to pull off the truly mega deals. The $1 billion per year and above deals. That would take some doing. That’s when you want your variable pay component to be 50% of your salary. Slurrp…To my knowledge, the highest Indian deal has not exceeded $150 million. My general knowledge I admit has seen better times.
Huge bank #3 for instance has a 10 year $1.5 billion or so per year outsourcing contract with International Business Machines. Now that’s when you go “Size does matter”. Compared to that, we are kids just out of the blocks, grinning away to glory on clinching a fraction of that – Your friendly door to door salesman.
Anywayz, you do what you can do, and you bid what you can bid.
But now that for better or for worse, we share the same bed with our bearded father company, we are in a position to bid for substantially larger RFP’s than before. We could do that earlier as well, but with a $50 million balance sheet, bidding’s one thing, winning a bid quite another. With a $500 million balance sheet though, completely different ball game.
That doesn’t mean of course that bearded father company is better than us. Au contraire (Isn’t that the word?). As I discovered yesterday, while size might matter, it ain’t very pretty.
Was up at the office till 3 yesterday night sitting in discussions on bidding tactics (strategy is a word cheapened with over usage, so I intend avoiding it as far as possible) for the latest big RFP going around, and for the most part, it was incredibly funny. Probably would have been awfully irritating if I had had more meaningful things to say, but as a largely dormant participant, it was one hell of a riot.
If I have two tips for the future, Excel and Power Point would be it. Differential Calculus and Abstract algebra ought to be taken off the books. These two put in. But you know that of course.
Here’s hoping we clinch the deal. Highly unlikely IM Honest O, but there’s something to be said for loyalty and hope.