Previously, we published a blog post How to Write an RFP for Procurement Analytics Software. To respond to the feedback received for this highly popular blog post we wanted to create an even more comprehensive guide for establishing a best-in-class RFP.
Based on our Sales team's experiences, we created two free resources: an RFP questions template [Download] and a cover letter template [Download] that includes the most relevant information to be given to vendors about your business.
RFP is a two-way street
The RFP process has two meanings. First, from a more traditional point of view, an RFP is used to compare the capabilities of different vendors to meet your organization's needs.
Second, the RFP process can be seen as a method for marketing your company as a business partner.
In competitive market spaces buying companies have started to focus on RFP experience from the vendor perspective to stand out from the competition. This is called reverse marketing.
Before you can choose a suitable vendor among the applicants, the vendor must choose you as a potential business partner by participating in the RFP process.
With a well-prepared RFP process, you give a professional image of your company and attract the best vendors to respond to the RFP. Naturally, it is in your best interest to get the most qualified candidates possible to choose from.
Questions to ask vendors for RFP
The RFP set of questions can be issued in different ways, Excel-file still being the most popular of them.
Large organizations are using sophisticated sourcing systems for running their RFPs, but many times responses received are compared or distributed in Excel format after the RFP.
We conducted a thorough analysis of RFPs that Sievo’s Sales team has received and came up with best-practice questions that address important fields to cover when sourcing procurement analytics software.
The methodology and many of the questions can be utilized in running any software RFP, however.
The structure of the RFP-Excel Template:
- Overview of the document
- Scope of the document
- Background of your company
- Vendor's company information
- Connection / connecting the solution
- Information security
- User experience
To begin with, the overview and scope provide a high-level view of the RFP document. The overview clarifies the meaning of each section in the document. This way, relevant stakeholders for answering each section can be found with ease. Scope defines what is and is not discussed in the document.
The background of your company and vendor's company information is pretty self-explanatory. With the information about the background of your company, such as the ERP landscape and current solutions in place, the vendor is able to understand the context and purpose of the RFP better and answer it more precisely. You wish to include such information that may be relevant to the vendor in the context and scope of your RFP.
The vendor's company information usually covers general information, key products, and key customers of the vendor. This is an important part for you when evaluating the vendor’s business and its compatibility with your operations. For example, customer references indicate what type of customers the vendor has catered to in the past.
The connection section discusses how the solution is connected to your systems, what is required in terms of technology and architecture, and the possibilities of connecting third-party data sources to the platform.
Information security is currently a hot topic. Data privacy, where the data is stored, and how it is handled must be covered as part of the RFP. It is highly important to ensure sooner than later that vendors can comply with your requirements for information security. If a mismatch between how the vendor stores data and your requirements for it are noticed late in the process, it will terminate the possible collaboration and consume time for both parties involved.
User experience considers the operating environment in the solution and the management of users. This typically includes training materials for users, support for using the software, and how user accounts and their access is managed.
Solutions shed a light on the details and functionalities of the provided solutions that are sourced with the RFP process. For example, in spend analysis, the section could cover whether can you create your own reports on the platform and what level of detail (category vs. transactions) can be achieved.
Naturally, the pricing covers what factors contribute to the price of the solution, but other important details are covered as well. The pricing section may address payment terms, billing intervals, different Service Level Agreements available, and their prices.
Download the FREE RFP questions template here.
it is not supposed to cater to every sourcing project but to give some ideas and vision for drafting RFP questions of your own depending on your specific sourcing case and business needs.
How to write an RFP cover letter
The cover letter is a perfect add-on to the RFP process. Too often it is not provided to the vendors, but it definitely should be!
When you do it once, you can pass it on to the next RFP with little modification. With a good briefing, you avoid multiple questions from suppliers later on because they require further details before answering the RFP.
Based on interviews with our sales representatives, we constructed a downloadable Word document that has topics they find useful when answering an RFP. See a snapshot of the table of contents for the cover letter below.
The cover letter is a narrative method for introducing your company, needs, and other relevant information.
By providing the vendor with the cover letter, you make answering to the RFP easier because the vendor can understand the context and purpose of the RFP better.
The purpose of an RFP process is not to make it difficult for vendors to respond but the opposite. You want to enable the vendors to give clear and precise answers.
When vendors understand the context and what you are looking for, you ensure higher quality RFP responses and a more efficient RFP process. This way, misunderstandings are minimized, work hours are reduced for all parties, and the evaluation of the received RFP responses is much easier.
When the right questions are asked in RFP-Excel and supporting information for answering them is provided through a cover letter, you maximize your chances of choosing the right vendor.
Download the RFP cover letter here.
Good luck with the RFP process! :)
Cover photo by: Juha Kahila