If your business is considering expanding your services or improving the infrastructure and processes you currently have in place, it is likely that you have considered finding a third-party vendor to provide these for you.
And, right off the bat, the first obstacle arises:
How to find the right service provider in an overwhelming sea of vendors? The good news is, instead of looking for them yourself, you can make them come to you!
Enter RFPs or requests for proposal: business documents that, when done right, can help you find the perfect vendor for your exact needs.
In this comprehensive guide on what is an RFP, we will touch upon the RFP meaning and definition, what an RFP document should entail and how to write an RFP for a successful procurement process.
We will also discuss different types of RFPs for projects in various niches, from software development to eCommerce. Let’s dive in!
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RFP is a formal document outlining a company’s intent and effort to secure a service, solution or a product.
An organization buying a service or a product issues the RFP document to request vendor bids for a product, solution or service and invites them to send their proposal that will meet the organization’s needs.
Businesses create and use RFPs when they:
Want to purchase services that will improve their business processes and bottom-line
Want to outsource business processes (for more on that, learn about what is BPO)
Are aware of very specific business issues that they want to solve with a new and improved solution
Don’t have the internal capacities to tackle some projects, such as creating an eCommerce platform or rebranding their business
What Should an RFP Document Include?
An RFP document is not a one-size-fits-all solution. It needs to be tailored to each business’s specific needs and according to the type of service or solution the company requires.
However, you can start drafting your RFP document by following a template for the initial structure which you can alter.
A standard RFP document should include this essential info about your company:
Project Name or Description
City, State, Zip Code
Procurement Contact Person (PCP)
Telephone Number of PCP
Email Address of PCP
The RFP’s body should also contain additional details about your project, such as:
Your company’s background
Project goals and overall scope
Your overall budget
Proposed selection schedule
Time and method for submission of proposals
Elements of proposal
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RFP Process: How to Write an RFP and Use It for Successful Procurement Procedure
Once you understand what elements constitute an average request for proposal document, it’s time to start drafting it.
But before – and after – you do that, there are certain steps you should take to successfully prepare for drafting an RFP and to see the procurement process through to the end.
1. Define Your Needs and Requirements
Your company’s procurement manager and team in charge of drafting the request for proposal should decide on and articulate the type of service/solution you are looking for. Teams and staff that will be impacted by the procurement – stakeholders, IT department, finance department, end-users etc., should also be involved in the process of gathering requirements.
This team will come up with RFP questions, prioritize the selection criteria and establish the entire scope. The end result of this step is defining the RFP, the issue(s) the company needs to solve or the goal it wishes to achieve.
2. Write a Comprehensive RFP
When writing your RFP, include questions to vendors that reflect your company’s specific needs. You can adapt these questions to any future procurement.
Asking the right questions in your RFP ensures that you’ll have the information you need to make a confident decision.
Some of the questions to your vendors include:
Who are your competitors?
What is your service/product implementation process like?
What kind of training do you provide?
Do you have any references and relevant case studies?
How will you protect our organization from risk?
How will your customer success team help us meet our goals?
3. Ask Vendors to Reply
After writing the RFP, you need to gather vendor proposals. Create a list of vendors, send your RFP to them and ask them for direct responses or use a bid service to post your RFP publicly. The latter option will gain you a bigger number of responses, but may also bring in some responses that are irrelevant to your procurement.
4. Assess the Arrived Proposals
After gathering vendor proposals, you need to evaluate their answers with a scoring approach that will help align your decision factors. Establish point values for individual questions in the RFPs based on their importance for your business to objectively establish which vendor is the best fit for your company.
5. Make a Shortlist
Following the evaluation of the arrived proposals, create a shortlist of the five best vendors (the vendors that are most likely to provide the solution fit for your needs). These vendors will move on to the final stage of your procurement process where you will ask them additional questions related to your business and their offerings.
6. Make a Final Selection
After coming up with your final choice, inform all the vendor you’ve shortlisted, regardless if you’ve chosen them or not. To those that didn’t make the cut, provide feedback on why they weren’t chosen – they may still be a viable option for your company in the future and you should try and be on good terms with them.
7. Establish Vendor Evaluation Process
To ensure that the chosen vendor delivers the return on investment, determine your vendor evaluation process. For example, you can use a supplier scorecard to make sure vendors meet your requirements. Also, it is important to communicate to the vendor the areas they’re lacking in so they can correct them and meet your expectations.
RFP Software Solutions
Plenty of business organizations use software solutions to streamline the RFP process since these documents involve a lot of moving parts and can be quite time-consuming to make.
Create RFPs faster: Especially helpful for companies that issue RFPs regularly and in great amounts. Since a lot of RFPs include the same or similar information and ask a lot of the same questions, RFP software can help by storing and organizing RFP templates and questions that you can reuse quickly.
Gather and keep track of vendor proposals in one place: RFP software tools provide greater visibility into vendors’ responses, saving you time by avoiding follow-ups and reminder emails.
Evaluate proposals side by side: Most RFP software systems make it easy to rank RFP responses, helping you find the right vendor more easily.
The Benefits of RFP
Issuing an RFP helps businesses find the best vendor for their needs and minimizes risk of poor ROI.
A well-written request for proposal helps companies:
Get the best pricing: More competing vendors in the responses increases the likelihood of businesses issuing RFPs getting the best pricing. RFPs allow issuers to compare pricing and value metrics to make sure they work with the right vendor.
Make better-informed buying decisions: By allowing your company to compare many different bids, RFPs help you to decide on the option that gives the most value to you, is most sustainable and most comprehensive.
Save time by easily comparing vendors: RFPs’ strict formatting guidelines save the time your procurement team would lose researching bidding companies. These guidelines ensure your team finds and compares data from each response timely.
Software Development RFP
RFP for software development is the initial document that you can use when looking to select a software development partner, specifically.
Like all other types of requests for proposal, an RFP for software development needs to outline specifics about the project, your business, deliverable dates and so on. The end goal is to procure a software development vendor that is capable of providing a sturdy, reliable product tailored to your goals.
If your company is looking to hire a company to help your digital marketing efforts, devise campaigns for social media, email, PPC and other platforms, you need to create an RFP for digital marketing services.
Similarly, an RFP document for website design and development includes vital procurement information such as presenting the scope and details of your website projects, your objectives and goals, as well as asking vendors essential questions based on which you will make your final decision.
When an organization is in need of a thorough rebranding – or a new company is looking to build their own brand image and identity – the decision-makers may want to procure a professional branding agency.
The most future-proof way to go about this is to draft your own RFP for branding agencies that will present your current branding strategy to your potential vendor, as well as outline specific deliverables, deadlines, expectations and budget.
For new, startup companies and businesses that don’t have first-hand experience in paid advertising, running the first PPC campaign by themselves can be challenging. Even businesses with extensive track records may often produce poor results with their own pay-per-click campaigns.
PPC advertising is best left to professional agencies that specialize in this. When looking to procure one, writing a paid media RFP is the number one step.
This particular document should entail:
An overview of your company
Digital marketing objectives
Your industry and target audience
Info about your website, social media channels and other digital assets
Current digital marketing and paid media strategy and results
Finding a new IT services provider can be a difficult and intimidating process. Requests for proposals are a safe and streamlined way to help organizations procure the right third-party vendor that can deliver professional services and value in this field.
IT is, of course, a very broad industry so the strategic sourcing process relies on evaluating your exact requirements, IT solution’s useability, technical capabilities and customer resources.
In case your business needs a solid eCommerce platform, as well as the auxiliary services that go with it (e.g. SEO for eCommerce), creating an RFP is the first step you should take.
Writing an RFP for eCommerce platform is a demanding process, but a well-structured request for proposal with questions tailored to your future project and desired objectives can help you find a partner capable of providing the fitting solution.
RFP is the essential document for any procurement of third-party services, solutions or products.
Not using a request for proposal when looking for professional services can result in great financial losses. Poor time management and overall inefficiency due to the inferior choice of company can badly affect your business down the line.
Although every RFP is different and varies in length, requirements and submission details, each of them contains essential elements that are pertinent parts of the document.
It is critical to customize each RFP according to your company’s specific project requirements, the type of services you seek and the variety of potential vendors.
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