Every few years, it seems, economists warn of an impending economic slowdown. In circumstances where these predictions have merit—like now—should businesses cut back, or should they embrace change?
Indeed, as every surfer knows, it’s impossible to ride the crest of a wave forever, and the troughs are where they regroup and build momentum. Or, as the late Winston Churchill once said, “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”
I recently sat down with RFPIO’s Chief Executive Officer and co-founder, Ganesh Shankar, to discuss the changing economy. We will discuss whether, like Churchill or the hypothetical surfer might, companies can leverage software like RFPIO to turn fiscal challenges into revenue-generating opportunities.
Wendy: Many economists predict a time of economic uncertainty. What is your opinion?
Ganesh: I am not an economist, but I see some macroeconomic challenges lurking. However, I see it as an opportunity. Stronger companies will have a chance to thrive.
Wendy: You have spent your career in the tech sector. In your experience, how do economic downturns generally affect tech?
Ganesh: In the grand scheme of things, this is a time when companies are looking for ways to be more efficient. Technologies tend to help companies become more efficient.
Better efficiency doesn’t mean that automation will take people’s jobs. I strongly feel that technology will allow companies to produce more and deliver better outputs with less infrastructure.
I believe this is the first time we are seeing a downturn in the SaaS ecosystem. Although, when I recently spoke with with two of our enterprise customers, they brought an incredible amount of energy to the meetings. They even flew people in from outside the country to speak with us. It’s evident that they see technology, and specifically our technology, as mission-critical.
Of course, not every technology can claim that, but I feel that RFPIO is fortunate in that it is seen as mission-critical software. Mission-critical technologies will be super important and help companies thrive during a changing economy.
RFPs in a changing economy
Wendy: RFPs are revenue-generating opportunities. During bullish economies, do you feel that companies tend to focus on the low-hanging fruit, such as MQLs and SQLs, rather than RFPs? If so, how does that change during a downturn?
Ganesh: I recently spoke to a CEO of a startup company. I asked why he was looking at a technology like RFPIO. Generally speaking, RFPs are relationship-based, and deals go to companies that are known to the purchaser.
For that reason, time- and resource-strapped small, mid-market, and startup companies often feel that responding to RFPs is a wasted effort.
The startup CEO looks at RFPs very differently. Instead of nurturing existing relationships, his company sees RFP response as an opportunity to put his brand in front of the customer. Even if they lose the deal, he said, RFP response improves brand awareness.
In the past, his company didn’t have the resources to respond to all the RFPs they received. With RFPIO, he told me, he can automate the response process, and it gives his company a chance to register his brand with buyers, whether they win the deal or not.
When the buyer is ready to look for a different company, and they are looking for a simple and economical solution rather than a giant brand, there’s a chance that they’ll remember his startup from the previous strong RFP response.
RFPIO helps his company respond to more RFPs and creates efficiencies in his organization’s response process. Now they have more time to respond, and now his team has the ability to participate in more bidding processes.
Wendy: Roughly ⅓ of revenue comes from RFPs. How might that change during a downturn?
Ganesh: I’m not sure of the metrics, but in changing economic times, companies will more thoroughly scrutinize and be more detail-oriented in evaluating options. In all industries, but especially in the SaaS economy, there are tons of options for customers.
Previously, perhaps due to a time or resource crunch, they made hurried decisions. In a challenging economy, buying decisions are more stringent and thorough. For that reason, I anticipate that organizations will see more RFPs.
Whether customers prioritize pricing, technology, etc., RFPs are a great way to objectively analyze each potential vendor’s offerings. I believe that RFPs will become even more common in the months to come.
Navigating changing times
Wendy: How should companies look at response teams if they need to restructure?
Ganesh: I don’t see technology as a vehicle for cutting people’s jobs. I see it as a way to make systems more efficient. I understand that companies sometimes have to take unwanted measures, but in challenging times, it’s important for companies to centralize their knowledge.
When employees leave an organization, and there is no centralized information repository, the company’s native knowledge walks out the door with them unless it’s documented and centralized.
You want your organization to speak the same language. The information that proposal and RFP managers curate for the company is client-facing. RFPs are often legally binding documents. Response managers must ensure they’re putting forth the right, most relevant information.
Wendy: Does RFPIO have a role beyond response management?
Ganesh: Companies spend time and energy creating their content, so why not optimize and repurpose it for use cases beyond RFPs? This would help other teams consume the content to be used for use cases. That is what I call the “democratization of content,” where organizations can use the same content over and over again. You can recycle and reuse content; you don’t have to reinvent it.
Especially in changing economies, it’s critical for companies to centralize and democratize content to help make informed business decisions. RFPIO’s industry-leading content management functionality provides a single source of truth for leadership, customer-facing teams, HR, finance, legal, etc.
Wendy: How do economic challenges affect the RFP go/no-go decision-making process?
Ganesh: Now is the time for companies to be more efficient and evaluate whether the opportunities are right for them. If it’s not the right opportunity, sometimes it’s okay to say “no-go” and move on to more fitting possibilities.
This is an excellent opportunity, however, for companies to loosen their criteria and do as the startup CEO I spoke to said. Now could be a great time to position themselves for future purchasing decisions by putting their brand in front of customers.
Wendy: A Forbes article suggests that government spending generally remains stable during a recession. What are your thoughts on that, and are there other recession-proof sectors?
Ganesh: Healthcare, education, utilities, education, and financial services are relatively stable.
Wendy: Do you have any advice for seeking out unsolicited opportunities?
Ganesh: This is the time for companies to step up their game and explain the value proposition they are offering. Sometimes customers may not think they are looking for a solution like yours, but then the onus goes on to you to educate and nurture the prospective customers and explain why yours is the right solution.
This is the time for value-based selling. You have to show the value and explain the ROI. Now is the time to become more serious in explaining to the customers.
Wendy: According to Gartner surveys, CIOs prioritize tech stack consolidation, centralized data management, and embracing emerging technologies as cost-cutting measures. How does RFPIO fit with those priorities?
Ganesh: I strongly believe that RFPIO fits into all those pockets. It helps companies be more efficient and reduce resource use. For CIOs, this is the time a platform like RFPIO is mission-critical. Regardless of the economy, companies tend to spend more on technologies that help them generate revenue.
That is why revenue-generating companies tend to be more successful during economic downturns. They are helping their customers earn revenue, which is one of the reasons RFPIO has one of the best-in-class customer retention numbers. We serve all three segments—small businesses, mid-market, and large enterprise companies.
Wendy: What about security spending?
Ganesh: Security spending will only increase, almost regardless of the economy. In the future, most large purchasing decisions will be preceded by security questionnaires to ensure that all vendors, and their vendors’ vendors, comply with buyers’ security protocols.
RFPIO® LookUp and Content Library saves hours on each security questionnaire by leveraging machine learning to answer up to 80% of a security questionnaire’s questions—with the documentation to back the answers up.
As for our platform, RFPIO is entirely scalable and secure enough for companies such as Microsoft, Salesforce, and Google.
Wendy: This has been an enlightening talk. Is there anything you’d like to add?
Ganesh: This is a good time for companies to think strategically. Most of the biggest deals involve at least an RFP. Sometimes they take a little longer to close, but the rewards are great. RFPIO can help companies thrive through changing economies by helping them win more of those bids.
Wendy: Thank you, Ganesh.
If you would like to learn more about how RFPIO can help your company navigate economic uncertainty, schedule a free demo.