The idea to solicit bids from vendors using simple notices in newspapers and trade publications started in the late 1880s during the rise of industrialism. For decades, this process changed and evolved into the current state of RFPs.
Regardless of your industry, it is inevitable that you will come up against the RFP process sooner or later. Being diligent in how you draft an RFP and how you divulge your specific needs to a vendor is crucial if you want your project to be successful. That way you get a vendor you can trust with the right ancillary tools that you specifically need. This guide will equip you to face up to the challenge and emerge successful. To understand all of this a lot better let’s take one step at a time into the world of RFPs.
What Is An RFP?
In simple words, A Request for Proposal (RFP) is essentially a document that a company or organization puts together in which the business owner asks potential vendors to submit proposals. This proposal must illustrate how a product or service they provide can meet one or more of the issuer’s business needs.
The RFP specifies what the customer is looking for and enables them to quickly compare vendors shoulder to shoulder and pick the best option. It has quickly become a standard practice for most modern business launches and many governments use them almost exclusively. The RFP generally includes a statement of work describing the tasks to be performed by the winning bidder and the timeline for finishing the work. At times, it also provides specific guidance on how the bids should be formatted and presented and what information must be included.
At its core, RFPs are pain point(s) described by prospective customers. When written well, they attract potential vendors. A good RFP will allow the supplier to collect offers from a wide range of vendors so they can compare their strengths and skills before they choose the vendor that best meets their criteria. It outlines the scope so interested vendors know how to win the work. Lastly, a proficient RFP acts as a tool that quickly evaluates the strengths and weaknesses of the vendors without spending a lot of time researching each company.
Benefits Of Issuing an RFP
Must you issue an RFP? There are a vast number of benefits of issuing an RFP. Here are some of those:
Provides Transparency
Produces an Organised Selection Method
Helps Ensure Project Success
Cost Effective
Provides Transparency
When done properly, an RFP encourages fairness in the selection process of vendors while providing transparency about which vendor was selected and why. This is an effective way to eradicate favoritism and corruption.
Produces an Organised Selection Method
Systems selection projects are usually scheduled over months rather than days because of team and vendor availability. This methodology and the RFP process help you track and compare your observations, questions, and conclusions. By using a good RFP and a streamlined selection process you can make the perfect application decision for your company.
Helps Ensure Project Success
Just the process of drafting and issuing the RFP can help you understand your own project better, including all the components required to complete it successfully.
Cost Effective
It opens up the gates to some good old-fashioned competition, which can be expected to keep project costs lower. In addition to this, it also reduces the workload on project managers, giving them a chance to focus their energy on other important matters.
When To Issue RFP?
Both large and small companies have the necessary resources they need to maintain current operations. If the company decides to take on a new project or expand an already existing project, an RFP gives them an effective way to recruit the expertise they need to complete the project. It soundly connects you with vendors, partners, consultants, or developers that have the resources, skills, and expertise to help your project. However, it isn’t always necessary to issue an RFP for simple, straightforward projects. An RFP is usually the right way to go when the following criteria are met:
- Is your project complex?
- Does it require technical information?
- Will it help to know the exact processes that the vendor will use to fulfill your order?
- Do you need data to analyze and compare which vendor is more viable?
If pricing is the only issue or if a good presentation is all that you need to decide between vendors, it might not be worthwhile to go down the RFP route. So, before you send out an RFP, because it seems easier than sitting through sale pitches or because people say, “it keeps up appearances”, analyze your project first and determine if it really is necessary or not.
Steps In an RFP Process
Now that we have a general idea of what RFP is, what its benefits are, and how to determine its necessity, let’s look into the steps in an RFP process. All companies are not the same and each business has its own unique method of doing things. Although this is true there are some common steps in the RFP process:
1 Discovery
Before drafting the RFP, it is imperative to do some thorough internal planning with the stakeholders that can guide the RFP writer in understanding the project requirements and constraints. Speak to all the stakeholders and finalize the budget of the project, non-negotiable deadlines, and compulsory technical requirements.
Determine the scoring criteria to evaluate prospective bidders. As an example, you can select prior experience, price quote, or size of the company as the scoring criteria.
2 Draft And Issue
This next part is a very important step in the process as a well-drafted RFP is essential to clearly describe the demands that need to be met. The document should contain information about the business, a short introduction to the project, project objectives, budget, milestones, and deadlines to achieve them.
For essential requirements, form questions in a yes or no format to help quickly eliminate unqualified suppliers. Furthermore, if you are looking for a partner with a thorough understanding of your industry and its needs, open-text answers can encourage suppliers to share their creativity and vision.
Once the RFP is ready, publish and circulate it so that potential bidders can know about the opportunity. You can advertise it in the classifieds’ sections of local and national newspapers or in trade journals relevant to the project.
3 Review The Bids
While reviewing the bids, remember to pay close attention to the plan of action and other scoring criteria you had drafted. Compare criteria factors to vendor strengths and eliminate vendors who are not qualified or underqualified.
Be sure to clarify any questions that vendors may have during the submission window. Also, reach out to vendors if you think additional meetings are needed to make a decision.
4 Select a Winner and Send the Contract
Once you narrow it down to two or more leading vendors, negotiate between them and make your final choice. Finalize details regarding milestones, timeframes, and deadlines. Document these details in the contract.
Best Practices for Submitting RFPs – What to include in an RFP?
Some typical information to include in your RFP are –
Keep it short and sweet in order to give the vendors a general idea of your company and its journey.
A project overview outlines the important details of the project including basic information, such as the project name, the problem it may solve, and the goals the team hopes to achieve.
Provide a detailed timeframe in your RFP to save yourself from some major headaches that may arise later and be very clear about your project deadline.
This final section should brief the vendor about when, where, and how to submit their proposal.
This section must be highly detailed so that the vendors understand your expectations well. It must explain the services that the selected vendor must provide on the project and the work that will be performed under the subsequent contractual agreement. This section lists performance requirements, both qualitative and quantitative.
A draft of the contractual agreement will be provided so that the vendor can review the terms and conditions that need to be adhered to on winning the contract.
Include an outline of the proposal submission so that you receive responses in your preferred format, from suppliers, making it easier to evaluate.
This section should give the vendor an idea of how they are scored and know ahead of time how they might fare.
The Right RFP Template
As mentioned before, well narrated RFPs are brief, effective, and alluring. Remember, as much as you are giving vendors an opportunity to work for you, you are also presenting yourself as a partner that the right vendor will want to work with. You can do this by using the right template and including the right information.
Here are a few tips on how to perfect your template and make it attractive to potential vendors:
Include A Project Overview Section
Paint a clear picture of your company history and needs. At a minimum, remember to include:
- Company history and overview
- Project name and goals
- RFP point of contact information
- Submission deadline
Share your RFP Process
To avoid any misunderstandings in the future, explain your RFP process so that the vendor knows what to expect from the start. Also inform them if you will request any online or onsite meetings following your initial reviews to ensure the vendor comes prepared to meet your needs.
Proposal Template
Include an outline of the proposal submission so that you receive responses in your preferred format, from suppliers, making it easier to evaluate.
Learn From Peers and Browse Online for Sample Templates
Observational learning is the best form of learning. There is an array of great RFP examples online for almost every procurement situation. Observe what information other businesses request as it can help reassure you if you are asking the right questions.
Categorize and Tag Questions
While building a catalog of RFP templates, save time by categorizing and tagging RFP sections on the bases of how you use them. For example, you can ask all technology vendors the same security questions, group them together and easily incorporate the grouped questions into your technology RFPs.
Draft Contractual Agreement (aka DRAFT Terms and Conditions)
A draft of the contractual agreement will be provided so that the vendor can review the terms and conditions that need to be adhered to on winning the contract.
Ask What You Need to Know Before Making the Deal
Ask about anticipated key milestones and how much time your team will need to dedicate to this project. For example, if you and your team have to dedicate 100 hours of development work or more. Everyone benefits from knowing this information in advance.
Selecting The Right Vendor
The most challenging step of the RFP process is choosing the right vendor. However, it might also be the most important. The future of the project depends on your selection; so, there’s an enormous amount of pressure to get it right.
Here are a few things to consider when selecting a vendor:
Price
Your main goal should be to get the maximum result for the lowest cost possible. Alternately, be wary of vendors who submit very low estimates, or you may receive less than acceptable products. Communicate to bidders the full extent of your needs so you receive an accurate bid. Understand if the vendor wants to add travel surcharges, administrative expenses, or maintenance fees, and always read the fineprint.
Quality Of Product
Price does not matter if the quality of the product is not acceptable. If possible, ask to see the vendor’s previous work.
Check References and Customer Service
References are priceless. Request vendor referrals from people whose opinions you trust.
Ethics and Integrity
Try to learn a little about your vendors and how much importance they put on working with high ethical standards. It is always best to be alert about issues before you sign on the dotted lines.
Long-term Relationships
Sometimes vendors hike their price after being with a business for a couple of years because they feel like they have the business, and it is safe. Be wary of this. Stay sharp and rebid the job every few years to ensure you get the best value for the money.
Share Your RFP With Fingent
Fingent is a certified global software development company with a client base across four continents. We power customers with a devoted and highly skilled team of experts to back up our tech innovations. Our processes are customer-oriented, curated to be cost-effective, address IT challenges, and offer a useful competitive edge in the market.
Our Unique Process includes:
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Collaboration: We first analyze the client’s business requirements and tech opportunities to understand them thoroughly.
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Innovation: Through our HLR Process and brainstorming, we research, analyze and build sustainable models that will suit the specific needs of the client
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Development and Delivery:We work with an expert team of developers and employ an agile process to work out the right solution.
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Continuous support:We continue our relationship with the client with post-launch support and updates.
You can see our complete process here: https://www.fingent.com/uk/rfp/
Our expertise, with emerging technologies, has empowered various businesses to sustain, function, and thrive remarkably with smart innovations. This opens up your business to huge opportunities that you could never have imagined before. Reach out to us and let’s discuss what this can mean for you.
