Investing in a project is not a simple decision to make because companies need to see what they’re getting into. That’s why writing a document describing the details of the project has become a reasonable solution.
But what should you include and what’s worth omitting? Here’s everything you need to know about requests for proposals as the key to finding a software partner and a step-to-step guide to creating them efficiently.
What is an RFP?
A request for proposal, which you may encounter as an RFP more often, is a document addressed to potential vendors in pursuit of an IT solution.
The goal of RFPs is to introduce the company’s needs and criteria based on which vendor’s offered solutions will be evaluated. Eventually, a vendor has enough information to provide a response on whether the desired solution can be provided, and if yes, on what conditions it can be produced.
Considering the particular cases in which a company may need to create an RFP, they include both products and services that already exist or need to be developed with no prior alternatives.
That’s why it’s so important to describe the need in the first place in enough details to learn whether the vendor is the right fit.
Simply put, a request for proposal is an announcement about a project that requires funding aimed to attract bids for project completion and outlining the bidding process. Some of the requirements introduced in the RPF are the vendor’s ability to provide what’s requested, the vendor’s feasibility, or the health of the vendor’s company.
Why Do You Need to Compose an RFP?
In a nutshell, requests for proposal help companies communicate their business needs, analyze the market in terms of the existing service providers, choose the most suitable option balancing cost and quality, and achieve their business goals in the long run by meeting the technical requirements for the project.
But there are some particular benefits of well-crafted RFPs to discuss.
Introducing business needs. Since a request for proposal is a paper, it’s a good way of reconsidering, formulating and organizing the view of what your project needs to be completed, what is essential and what can be neglected. From the vendor’s end, client’s RFP is a clear and concise list of what the software partner is expected to perform, which allows understanding whether it’s possible to provide or not.
Exploring the market. Requests for proposals are beneficial for both clients and vendors since both usually deal with several RFPs and have a pool to choose from. Vendors save time communicating the opportunities with the client by receiving a list of the project’s requirements/expectations on the type of services, budget allocation and the contract terms and provide a clear answer with no misinterpretation or miscommunication.
Choosing the best ratio. Providing RFPs provokes competition and the variety of alternatives. Having several options of both partners and clients increases competition, which leads to a reduction in the service cost and an increase in its quality. In the long run, you receive the best price-to-quality ratio for a project.
In addition, RFPs allow seeing the variety of offers and come up with an integrated solution by mixing technologies or uniting vendors, for example.
5 Criteria of a Good RFP
To attract the right vendor within a set timeframe, your RFP must be properly composed. These are the 5 elements to include in your request for proposals.
1. Shedding light on goals
Since the purpose of an RPF is to introduce a project, it has to outline the business goals it is aimed to achieve. This includes both short- and long-term objectives that finding a suitable vendor helps to reach.
2. Requesting resources
As a part of the goal-setting process, RFPs require stating deadlines and financial expectations for the project. Being specific in how much time you need, what budget you rely on and what team you request shows that you’ve done your research and know how to make your project work.
3. Listing examples
Writing something like “I want to build one more Facebook” isn’t the best way of illustrating the idea behind your project. But mentioning a couple of products or services that already exist and perform similar features will give a full image of the plan to the vendor.
4. Expressing the need
Any project must be useful for some type of audience, otherwise, there’s no point in developing it. And as a client, you are the one to communicate the aspects of the problem your project can fix, why it needs to be fixed and who’s interested in getting it fixed. These basically explain the core purpose of your project.
5. Showing business value
Having listed all of the above, interpret it into a bigger picture. Explain what your project can bring in the long run and how it can benefit the vendor. If possible, mention the potential stages of growth for your project to illustrate the final end you’re looking for.
While these are quite detailed, keep in mind that you don’t want to make your request for proposal too overwhelming with excessive details. So balance the scope of information you include.
Creating the RFP in 5 Easy Steps
What seems to be a complex process can be divided into several smaller stages. Step by step, you can come up with a perfect request for a proposal:
1. Make a draft to list the key ideas.
2. Add technical requirements and outline the bidding process and project implementation.
3. List questions to the vendors.
4. Check the structure to organize every section properly (see templates here).
5. Send your RFP out to find out software partner.