Article summary

Most organizations hesitate before undergoing the expense and risk of re-selecting a Global Mobility Vendor. Although a Vendor switch can be disruptive, any organizations will switch a longstanding supplier in exchange for increased value. But will significantly more value be achieved, in return for the Customer’s time investment in tendering and transition? This article outlines how customers might want to ensure that the RFP will lead to that better outcome. The article outlines some of the high-level considerations that should drive a worthwhile RFP process and the content of a Global Mobility RFP, in three categories: Price, Delivery capability and Value.


Context

There’s no doubt that a proper RFP ensures that the supplier selection decision has been thoroughly prepared. But will the final selection decision be the first step towards higher performance – or could the Global Mobility team make a selection that the Customer – or indeed the selected Vendor – comes to regret? Will the future relationship boost both partners’ respective NPS (Net Promoter Scores), enhancing the Global Mobility team’s internal reputation and the Vendor’s standing in the market? Or will the supplier relationship be a distinctly average experience or even a constant irritation and drain on time and money?

The issue

A rigorous tender should weed out Vendors who do not live up to promise. Yet some Customers report feeling underwhelmed after starting transition work with the selected Vendor. Anecdotally, warning sighs appear as early as the first transition meetings. If the Vendor requests copies of all current templates, tools and reports in order to replicate them, the Customer is privately wondering if the Vendor brings any proprietary best practice. When some of the new faces in the meeting look familiar from other Vendors or even from the previous incumbent, the Customer will start to question the reality of the promised “fresh approach”.

An RFP plus Vendor transition can represent a time investment of up to twelve months, quite possibly absorbing a full FTE for that time. Before launching such a process, Customers will want to ensure that the RFP results in an improved, tailored service from a new provider or from the incumbent Vendor. Customers should therefore define what the upgraded service should look like (to Global Mobility, to Assignees and to business customers), before launching an RFP. The Customer team will also need to be sure that the RFP process is designed to truly test if that service will be delivered. Lastly, it is important to verify that the RFP will select a Vendor who will continue to bring value as their program and organization develops over time during a three to five-year Vendor contract.

These pre-considerations can fall into three categories:

  • Price: Ensure that bidders initially quote fair, inclusive prices for a genuinely improved and tailored service,
  • Delivery: Ensure that the RFP process includes questions and techniques to truly test bidders’ capability to deliver that transformed service,
  • Value: Ensure that the selected provider can offer a sustained partnership amid inevitable change, both in the Customer’s organization and in the Vendor market’s offer.

Price: Will the customer be paying for value or for a commodity service?

Every Global Mobility leader knows that it’s pointless to drive vendor prices down to levels where services are mediocre, and vendors become unsustainable. In the Relocation sector, the consolidation of suppliers and instances of financially struggling firms serve to illustrate the consequences of uncommercial contract terms. Instead, the cost goal is to ensure that bidders understand the Customer’s objectives, tailor their pricing and work from the most efficient cost base.

This section describes how to set up the RFP in order to compare bids from a cost perspective in a structured way – in addition to the detailed price comparison which will be reviewed in a future Article. Global Mobility teams could find the following RFP content useful across all GM vendor categories including Relocation, DSP, Tax, Immigration and Medical services.

  • Ensure that Vendors bid all-inclusively for the desired tailored service:

To ensure bidders submit accurate pricing, an effective RFP process will unambiguously describe how future services should ideally look, rather than simply reproducing the current scope of services as a lengthy list.
One example is Assignee experience. This specification should include requirements for the vendor’s Assignee portal, for the Vendor’s personal interactions with each Assignee household and, not least, how the Vendor will significantly reduce each Assignee’s workload, stress and uncertainty. This best-practice picture of desired Assignee experience can be built up prior to the RFP, using external research, peer networks and internal soundings. Making scope explicit in this way achieves three objectives: customers will be more certain of receiving all-inclusive, easily comparable price bids; proposals will more clearly show which bidders have truly understood the customer’ s aims; the bidder’s proposed investments will actually be relevant to the customer rather than a generic list of “free” “products” and offerings.

  • Ensure that Vendors differentiate their pricing:

New Global Mobility policies do not just mean less, or more, services picked from the same scope list. Generally, new policies reflect a different philosophy for how a particular category of mobile employees should be treated. Vendor fees must vary to reflect the Customer’s palette of Global Mobility policies, from full scope, classic Assignments through to Host Plus and Local-to-Local transfers. Secondly, total customer spend must genuinely go up and down based on volume changes within each Assignment population. Thirdly, if the Customer seeks to convert internal fixed costs into variable external costs by outsourcing internal customer processes and technologies (like relocation expense management and administering intra-group invoicing), the Vendor’s price structure for those services must be truly volume-based and must reflect increased efficiency savings over time.
Other areas for Customers to verify for differentiation and variability contract management services (“coordination”) which should vary by policy; transition fees; additional technology fees for significant upgrades; fees that a vendor conditions on minimum volumes; fees for incomplete input data and all types of unit-based “bundled fees” that contain assumptions regarding service frequency.

  • Ensure that Vendor price quotes reflect an efficient organization:

Every Global Mobility customer is familiar with the incumbent vendor’s argument that “Our prices are higher because we know what it takes to serve you”. To test that statement, Customers have to compare how each bidder delivers services, behind the scenes. A good customer question is always, “What could we, as your customer, change (other than scope) so that you reduce your fees?” This goes to the assumptions that the bidder is making in order to determine their prices. If the bidder has truly tailored their price list, their answers to questions like this one will tell the customer a great deal about the bidder’s cost structure and whether the bidder has over-estimated or (worse) even under- estimated their cost of delivery. Questions such as “What will be the Headcount and individual skills mix of your Coordination team?” and “In which locations will administrative and support processes be performed?” promote easier comparisons between bids.

Delivery capability: will the vendor strengthen the Customer’s Global Mobility organization or hold it back?

The ability to deliver a consistently good service throughout a period of great corporate change is a crucial test of Vendors and Global Mobility teams alike. Selection criteria in this category include:

  • Can the bidder’s proposed global service organization mirror the customer’s Global Mobility organization,
  • Has the bidder understood the customer’s Global Mobility processes and proposed appropriate resources,
  • Can the bidder’s people, process and technology meet the customer’s required quality standard and, not least,
  • How competently can the bidder truly transition the customer to the new, better service level that customers expect to create through running a very costly RFP process.

Ideally, these selection criteria will be tested not through standard oral presentations but instead through workshop style sessions based on “cases” at the short-list stage. Bidders will receive a set of facts in advance, using the workshop to develop their offer in a dialogue with the customer. It may be appropriate to add a second “surprise” case study to the session. This workshop format has several advantages: it gives a hint as to how a partnership with the bidder’s engagement team could work in practice; it helps test if the bidder has truly understood the customer’s own business objectives; it ensures that bidders only put forward an engagement team with relevant experience and specialisms, rather than corporate executives and sales managers. Perhaps the most important goal of the workshop is to test if the bidder truly brings their own best practice, in the shape of forms, assignment letters, pay reports, processes and the like.

It goes without saying that bidders can only demonstrate their understanding of requirements regarding service model, process, resources and transition if customers have prepared to describe their expectations in these areas during the RFP process. This includes the location of hubs, the required role of the Vendor’s Assignee-facing consultants, the linkages to other Vendors and RACI charts describing customer contacts and decision-making responsibilities. Omitting these aspects distorts the result of the RFP, by giving an unfair advantage to incumbent vendors or conversely disadvantaging the incumbent if the Customer is unaware of what it takes to service their organization.

Furthermore, customers must be ready for oral presentations with an extensive list of pointed questions in order to ensure that both parties have fully understood each other – and follow up in writing subsequently. Customers should also strive during the RFP to describe not only their current set-up but also their future Global Mobility organization. Global Mobility vendor contracts are no longer cast in stone: the best vendors can grasp the customer’s changing requirements and adapt accordingly over the life of the contract.

Value: defining a goal for the RFP

Why should Global Mobility outsource anything? That might seem an odd question, given how rare it is for a Global Mobility team to have skills and resources in Household Moves, Tax Returns or GM Technology. But the question goes to the strategic goal of an RFP. Is the RFP launched because the Customer has to / because it’s time to have one – or does the Customer aim additionally to significantly upgrade the Customer’s own Global Mobility offering to Assignees and business customers?

Examples of strategic goals for any Global Mobility RFP include:

  • Reset the Assignee experience, for example by simplifying the number of contact points, offering a portal with “one-stop-shop” capability and providing richer, “push” updates to Assignees on key elements in the move. 

This goal favors vendors with a real, well thought-out technology offering as well as vendors who are able to collaborate across silos within their own organizations and with other vendors.
  • Significantly improve data, for example by consolidating financial information or tracking real-time assignment status, by accessing live dashboards containing relevant performance information or by accumulating compensation and reporting numbers in a comprehensive and timely way.
    This goal favors vendors who control their networks with automated global systems, vendors whose systems easily interface with other vendors and vendors who have a clear technology vision against those who only improvise technology systems for specific customers.
  • Strengthen the Global Mobility service in key markets, for example by searching for Vendors who can create hubs next to the Customer’s regional Global Mobility centers.
    This goal favors vendors who have already built a substantial global organization to serve existing customers.
  • A closely related goal is access to flexible resources and talent, particularly when the Customer is creating multiple policies or moving into new, important markets.
    This goal favors Vendors with a track record of execution across countries, a responsive international network and deeper Global Mobility expertise that helps the customer communicate and implement new changes across their group of companies. Conversely, Customers with this goal may be wary of an RMC that is inflexible about changing its supply chain partners or a tax / immigration provider that seems to be superimposing an unusually large coordination effort (or even multiple coordination teams) in an effort to harness its federated international network.

Such goals are genuinely strategic. Customers will be looking for vendors with real, current capabilities who can also demonstrate a credible investment program in the customer’s key areas of concern. Key vendor attributes that the RFP should be designed to test include:

  • Honesty and transparency: The prospective vendor discloses both financials and business plans, presents a credible transition plan and demonstrates how they will partner in an open and constructive manner. The vendor can describe, without prompting, the types of decisions that will be taken jointly. The vendor states realistically which resources are available immediately and which resources will need to be hired or redeployed.
  • Strong governance: The vendor can demonstrate in practical terms how they will be accountable for execution. The vendor also shows they understand the concept of a strategic account plan, by presenting commitments to relevant, innovative future improvements at specific future dates. The vendor understands that a governance meeting is not a project management meeting but rather an occasion to continually adapt and improve their offering to ensure that the overriding goal is met. Lastly, the vendor’s proposed Key Performance Indicators should be limited, focused on the main goals and should measure results rather than mere task completion (Global Mobility KPI’s will be the subject of a future Article). Vendors often conflate KPI tracking with tracking thousands of individual transactions, perhaps forgetting the word “Key”. Disciplined Vendors should obviously track task completion internally, but this mass of data is rarely useful or usable for the Customer’s Global Mobility team.
  • The whole picture: The vendor shows an understanding of the Customer’s internal teams and of the services of the Customer’s other vendors. A good bidder makes suggestions to simplify and accelerate processes between all parties and to provide better all-round data to the Customer. Most importantly, the bidder can correctly challenge the Customer on their process, beyond the vendor’s own role: for example, a good bidder should be able to comment on whether the Assignment initiation process is genuinely simple yet fail-safe; are the number of Assignee contact points genuinely minimized; are disbursements to Assignees really as swift and compliant as they can be; is the customer’s cash flow truly optimized, in the shape of (in Relocation) future reduced supply chain costs or (in Tax) recovered tax credits and tax equalization balances that actually hit the corporate bank account.

Summing up

Global Mobility RFP’s are sometimes centered around a questionnaire that was adapted from an off-the-shelf document or one shared within a Global Mobility network. There’s nothing at all wrong with using such a template, which is a significant time saver. But there is frequently a wider concern at the back of the Customer’s mind. Will the RFP bring us forward or back? Will the tender proceed briskly and decisively, or will we get bogged down as we discover unexpected questions, new offerings, possible supplier weaknesses and grey areas? Can our Global Mobility vision be serviced by the Vendor market at a reasonable cost or are we better off if we build a new relationship with our incumbent vendors? This Article attempts to help Customers answer the basic question: What do we want to get out of an RFP?