RFPs and Technology Transformation: Are You Asking the Right Questions?

As outlined in our year-end Surprises and Predictions post, 2023 was a year of discovery, with firms realizing the evolutionary power of innovative technologies and coming forward to present their own clear paths to transformation. As FundGuard President John Lehner stated, “This surprisingly rapid acceleration – compared to past years – of on-prem software migrations to scalable, cloud-native SaaS stems from multiple different drivers, including demand for cloud upgrades and management of TCO [total cost of ownership], plus alternative managers and their service providers who also want to migrate and future-proof.”

With this awakening of the industry, we have seen a steady flow of Requests for Information (RFIs) and Requests for Proposals (RFPs). Our team of seasoned investment accounting professionals and technology experts have been  paying close attention to how firms are framing their paths to transformation and the questions they are asking of their providers.

As one of the first people to review these inbound requests, FundGuard’s Peter Muldoon, Product Strategy Director, has noticed that some firms still trend toward “legacy thinking” when it comes to how they articulate and frame their needs. These firms have very clear intentions to evolve, but their perspectives can be clouded – no pun intended – by the barriers enforced by legacy tech. FundGuard’s role as a transformational industry leader is to help broaden our clients’ perspectives and open more eyes to the possibilities that lay beyond legacy tech’s limitations.   

With this in mind, Peter has outlined some of the top RFI/RFP questions that we have seen over the last year and proposes – through the lens of possibility – how firms can evolve these questions to reflect the very transformation they are trying to achieve.  

Why Your RFP Questions Might Need a Refresh

The RFP process provides crucial communication between clients and vendors, enabling the two to ensure their needs and capabilities are aligned. 

When RFP questions stem from a legacy tech way of thinking, this can lead us to a potential  mismatch in expectations. From the perspective of a vendor, these types of questions can result in a variety of assumptions:

• Future Resistance: Questions that do not account for advancements in technology can cause concerns that a potential client is not prepared to adopt a modern solution. 
• Misalignment: Without the right RFP questions, providers can encounter misunderstandings during the evaluation process, as well as misalignments between client expectations and vendor capabilities. 
• Time Commitment: When these questions persist within the RFP process, this leads to a need for clarification or reframing to address the current landscape. This clarification can take time and effort, taking away time that could be otherwise spent on business innovation. 

Additionally, your RFP questions can be tremendously influential in finding the right providers. When you ask modern RFP questions, you can often reveal whether a vendor has embraced advanced technologies or if they still rely on outdated legacy systems. 

With the right partner, you shouldn’t have to ask for specific solutions necessarily — you should be able to bring your problems directly to your partner and receive future-proof, scalable solutions in response.

Get Better Results by Transforming Five Traditional Tech RFP Questions 

Our industry has grown accustomed to the inherent restrictions of  our mainstream traditional technologies — recognizing that these are big constraints, can help to reshape views of technological advancements as empowering.

Consider this perspective as we discuss five outdated RFP questions and how to improve them: 

1. Do you maintain backup tapes for data recovery?

The Better Question: What is your failover redundancy across availability zones?

Ask providers to explain their data backup and recovery mechanisms, including frequency and accessibility, as well as details about their cloud capabilities and built-in redundancies. 

Regarding data recovery, a modern RFP should request details on a vendor’s approach to failover redundancy. Also inquire about zone mirroring (anything happening in one zone that is duplicated in another zone) to ensure redundancy in a secondary region if the primary region fails. 

For example, when sending an RFP to FundGuard, asking about failover redundancy opens the door for a conversation about modern, cloud-based technologies that can reduce or eliminate failover. While a legacy system may take hours to bring up another datacenter, FundGuard can eliminate failover time and switch to another environment within seconds thanks to our cloud-native framework. 

In this case, the evolution of your perspective comes from realizing that failover is not a guarantee — in fact, failover can become a non-issue with the right technological approach. 

2. Can your software be installed locally on our servers?

The Better Question: Can you describe your cloud deployment process and requirements?

In traditional legacy environments, you had to ask about on-premise components to ensure you had the proper physical infrastructure in place. However, today’s modern tech-based environment has largely replaced on-premise equipment with a cloud-based service model.

Consider questions that refocus  on cloud deployment requirements rather than on-premise components, as most cloud deployments do not require onsite equipment at all. 

In this scenario, be mindful of the vendor with whom you are communicating. Legacy vendors often offer software-only solutions or rigid hosting infrastructures, while modern SaaS providers can deliver not only the software but a dynamic and expansive  cloud infrastructure necessary to operate it. 

3. What are the specifications of the physical servers hosting your SaaS application?

The Better Question: Can you describe your cloud infrastructure, scalability, and datacenters?

This RFP question can be reframed to reflect a better understanding of how to access processing power from a cloud-based system.

The traditional approach to achieving a no-failure system required costly and high-performing servers, as well as backup servers should a failure occur. Not only are these servers expensive, but they also lack efficiency, often having to do heavy processing for only an hour or more per day. 

By contrast, a modern cloud-based infrastructure can share processing power where it’s needed. 

If you were asking this evolved question of FundGuard, we could inform you of our scalability capabilities that allow us to leverage whatever processing power is needed. 

4. How does your SaaS solution integrate with legacy on-premise software?

The Better Question: Can you explain your integration capabilities with cloud-native, third-party APIs?

The traditional question in this scenario circles back to the assumption that on-premise software is part of the equation, while the evolved question assumes cloud-native technology is a given. 

Approaching this question from a more modern perspective reveals more crucial information about the availability of connectivity tools and API integration capabilities. This can also include asking about mapping capabilities that help bring outside data in successfully. 

For example, at FundGuard, we provide clients with a report center (handling outbound requests),  mapping tools, and an interactive API based integration environment. 

Ultimately, the modernization of this question could reveal a vendor’s ability to provide true cloud-native levels of connectivity rather than brittle on-premise file based workflows. 

5. Is perpetual licensing available for your software?

The Better Question: Can you explain your subscription-based licensing model and options for longer-term commitments?

Though the perpetual licensing model once dominated the software market, modern subscription-based licensing is replacing this outdated approach that does not align so well with an ongoing vendor client SaaS relationship.

A modern SaaS environment enables an ongoing cost model where revenue correlates with servicing costs. Perpetual licenses, on the other hand, can lead to vendor risk and hurt ongoing client vendor relationships as the vendors using them will likely scale back their servicing costs in years when their new business targets are not achieved. 

This evolves the relationship between client and vendor, as you have an ongoing relationship with your SaaS provider that better serves your needs in terms of improved features and redundancy. 

Evolving RFP Questions is Two-Fold: Achieving a More Modern Focus

Outdated legacy systems have many built-in constraints that clients no longer recognize due to how deeply intertwined they have become in day-to-day operations. 

While it is certainly important to ask modern RFP questions, looking deeper into how you frame your firm’s approach to technology, software, and vendor relationships can provide you with more insightful responses to compare. Modernizing your perspective can better help you to evaluate responses for today’s technological advancements and account for your own modern systems and transformation plans. 

In addition to rephrasing  the traditional tech questions above, richer questions can better help address your specific needs and set the expectations of a vendor.

For example, let’s look back at the question of data backups. Rather than simply asking for an explanation of data backup and recovery mechanisms, you could go for a more detailed and nuanced question, such as:

“Can you describe your automated failover processes and how quickly the system can recover in the event of a server or datacenter outage? Additionally, explain any built-in monitoring systems for detecting failures and triggering failover.”

This more detailed question adds much more to the conversation, indicates your advanced understanding to the vendor, and helps to ensure that the vendor’s capabilities truly align with your needs.  

Discover Possible. 

At FundGuard, we’re here to help you ask the right questions.

Our cloud-native investment accounting solution drives efficiency and innovation, helping you adapt your operations and achieve a truly modern approach across all processes. 

Reach out to the FundGuard team today to get started.