April 11, 2022
A request for Proposal (RFP) is a multi-step process that takes time, patience, and research. It is curated after careful consideration of the company's budget, goals, time limitations, software requirements, and more.
So, in this article, we have covered the principles of an RFP and how to structure it for high-quality responses.
RFP – Breaking the ice
It is a formal request for a product, service, or solution sent by an issuer to prospective vendors. So, theoretically, a strong RFP clarifies requirements, project details, and overall expectations concisely.
In other terms, an RFP is a formal request for vendors to submit ideas demonstrating how their product or service may address one or more of the issuer's key business needs. Furthermore, it encourages transparency and impartiality and enables companies to make data-driven decisions based on a set of criteria.
The RFP document demands that all interested vendors submit their responses in a formal proposal document. This systematic approach aids in the generation of competitive proposals from which a final decision can be made.
Eight must-haves for an effective RFP
A clear, concise, and well-written RFP document should follow a certain structure to clarify all the requirements. This structure can be broken down into 8 important areas that every technical or non-technical project should follow. We will go through each area one by one to help issuers start drafting a clear and concise RFP.
This section outlines the entire project, as well as provides a detailed introduction of the organization and its values. A strong introduction is necessary because it eases the vendors into what they're going to read by giving them a quick summary of the project, product, or service's needs.
It explains who the RFP issuers are as a company, what they hope to accomplish with the RFP, and provides a synopsis of the work required in a few key areas and the proposal deadline.
2. Background information
This section provides a history of the company issuing the RFP and its ambitions. It includes contact information for the people who will be examining the bids.
You should include any background information about your organization and its history that you believe is vital for potential vendors to know.
3. The project's objectives
Usually, companies include the project objectives to inform potential vendors of the project's aims and objectives. Sometimes the exact problems the company is seeking to tackle as well as why its existing approach isn't working are explicitly delineated.
The actual description of the project is one of the most crucial components of creating an RFP. Make this part as comprehensive as possible, so vendors understand exactly what you're looking for and whether they can fulfil your requirements.
4. Scope of work
This portion of the RFP is the most detailed and is specifically about what the project wants to accomplish. The more information is provided in this part, the less back-and-forth you'll have to go with the vendor. Additionally, the cost estimates that the vendor provides also become more accurate according to the details provided here.
It matters most that the RFP issuer has spelled out exactly what they anticipate. Some other important elements that can be included in this part are support-specific characteristics and technical constraints or limitations imposed by an industry (financial industry regulations, HIPAA compliance, etc.).
If you're looking for really specific systems, tools, or services, you'll need to include a checklist, so vendors know exactly what you're looking for. Add a list of the characteristics that are necessary and desirable, such as system integration requirements, tools, or systems that you like, etc.
5. Timeline for the Project
Companies must communicate their expectations for the project's completion timeframe. If no specifics about the timeline are provided, then the vendor can inquire when preparing queries.
An issuer can instantly eliminate any vendor who can't meet the deadlines by specifying a timeline in their RFP.
Dates and deadlines that should be included are:
- RFP launch date
- The due date for receiving queries from vendors
- The date on which query responses will be provided by the issuer.
- Due date of the RFP
- Announcement of finalists
- Presentation dates for Shortlisted vendors (optional stage)
- Date of the final award
6. Format of the proposals – Response
This section serves as a guide for organizations that will reply to the RFP. It instructs vendors on how to organize their proposals and what the company expects to see in them. Is there a certain format to follow? Do they prefer a Word document, a PDF, a PowerPoint presentation, or any other format?
Typically, the instructions include:
- References of similar past projects
- Explanation of project methodology
- Experience with a certain technology stack
- Portfolio of the technology stack
- Project team
- Resumes of all resources who will be working on the project
- Company's value proposition
7. Selection Criteria
This part explains the criteria that will be utilized to choose the successful bidder for the request for proposal. The selection criteria section helps companies obtain better, more focused offers as a result, making the decision-making process easier if the vendors do not satisfy the criteria. It also provides the vendor with a solid idea of what to highlight and saves them time working on items that will have no bearing on the selection.
After receiving the RFP responses, each section must be examined and analyzed to decide the winning bid. Each aspect of the RFP may subsequently be scored according to the degree to which requirements and priorities are satisfied, using a pre-defined scoring system.
Some organizations, for instance, provide information on the weightage that will be accorded to technical and financial evaluations. They provide answers to common questions like if the technical evaluation is the prerequisite or vice versa. Since any company that fails on either of the prerequisites is out of the run. Companies can provide the answer to such questions or others and explain if both technical and financial sections will be evaluated simultaneously or one will act as a prerequisite.
Sometimes a compliance sheet can be added here with a list of points for which responses are converted to scores that are used to assign a percentage value to the variables that are most essential to the business. The responses are usually limited to compliant, non-compliant, and partially compliant. As an example, the weighted scoring criteria may be as follows:
- Overall technical expertise: 25%
- Data governance: 20%
- Open-source solution: 10%
- Financial cost: 30%
- Experience with specific technology stack: 10%
- Time to go live: 5%
8. Proposal Deadline
Finally, a deadline is provided for when the proposals should be submitted and when the award will be given.