Are you looking for an analytics solution and struggling with evaluating and assessing potential vendors?
To compare vendors’ abilities to meet your organization’s needs, it might be a good idea to issue a request for proposal (RFP). The RFP should be well-thought-out to get informative answers from vendors and ultimately find the best software provider.
Writing a comprehensive RFP is challenging and requires effort. At Sievo, we've received and answered hundreds of RFPs from leading procurement organizations worldwide.
This article is based on research into the 30 best RFPs we've received, containing hundreds of different types of questions.
Based on our experience, we wanted to share four key points to consider to write a best-in-class RFP. At the end of this post, we have also provided a template with example RFP questions.
Click HERE to download the free RFP template for procurement analytics
Writing an RFP for analytics software
In this blog, we'll focus on RFPs for procurement analytics, although many of the factors considered can apply to other types of solutions.
Define your scope
There are many procurement analytics software providers that all focus on different areas. As a rule of thumb, software vendors can be divided into best-of-breed and full-suite providers.
Best-of-breed vendors focus on a specific niche, for instance, analytics, whereas full-suite providers aim at having all applications under one platform.
To narrow down the scope and include only relevant vendors in your RFP process, it is a good idea to research to market and consider what services and solutions you would need.
Shortlisting vendors and booking demo sessions with a few is a good way to get a basic understanding of their solutions.
Align internally
Include all stakeholders in your organization that have needs from the software. For instance, Procurement, IT, and Finance should internally align their requirements for the software. Including relevant people in your organization helps in formulating helpful RFP questions.
If you don’t know what you need from your software, it is difficult for the vendor to guess what type of solution your organization is looking for. They might provide you with too much or too little irrelevant information, which is time-consuming for you to review.
Give relevant background information
It's essential to provide the vendors with background information for them to understand your current situation, your organization's needs, and the challenge you are trying to solve, in addition to the purpose of the RFP and other things that are relevant for your project, such as the timeline you have outlined.
Stating necessary technical details at an early stage will prevent roadblocks in the later stages of the project. Giving the vendors as much relevant information as possible at this point saves you some time since you won't have to answer the same questions they would ask you individually.
Depending on the software provider, some information vendors would often need from your organization to provide a pricing estimate include some or all of the following:
- Amount or ERPs/source systems
- Number of users
- Annual spend
- Internal and external spend
- Addressable/non-addressable spend
- Direct/indirect spend
- Amount of taxonomy levels required
- Description of categorization
- Number of invoices and purchase orders
Provide clear instructions
The deadline for a response to the RFP and the preferred format in which the vendors should submit their response should be determined, such as an Excel spreadsheet or a PDF file sent via email. It is also a good idea to define the length of the response you wish to get, for example, by word count.
Standard format RFP responses enable you to make comparisons across vendors and help vendors know how detailed their answers should be.
Share the next steps in the RFP process
It's a good idea to share with the vendors how their responses are assessed and which criteria are used. Let the vendors know how the selection process will continue, for instance, if the best two-three vendors based on their RFP responses are selected for the next phase.
RFP question tips
Section your question areas. If you send your RFP questions in an Excel file, it is worth considering making separate sheets for each question area.
In procurement analytics software RFPs, the question areas could include some or all of the following:
Want more templates? Check out this free RFP template for procurement savings management software
Pose clear questions, get clear answers
Asking clear and specific questions allows for concise and informative answers. Do your best to formulate the questions so that all vendors answer the same question and understand it in the same way.
Instead of asking potential vendors to "describe your solution," you might want to ask something like, "can you extract data from multiple different ERP systems within our organization."
It is difficult for the vendors to know how detailed their answers should be if you ask them to describe their solutions.
Underline the importance of question areas where you'd like detailed descriptions and where vendors can elaborate on their answers in contrast to questions with simple yes or no -answers.
Attach an appendix
Additionally, tell if sending appendices as a part of the response is allowed.
Fitting a detailed description might also be challenging to fit it into an Excel cell and you might end up receiving an appendix of 50 pages explaining all the technical details of their offering.
Click HERE to download the free RFP template for procurement analytics
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