RFP best practices and alternatives in the vendor selection process
The main purpose of a Request for Proposal (RFP) document is to help you choose the best IT company to develop the solution that you need. It plays a crucial part in selecting a good long-term technology partner, especially when the project is likely to take months or years.
In order to give you an idea of when an RFP usually comes into play during the vendor selection process, you need to be familiar with its typical phases in the first place:
- a Request for Information (RFI) is submitted to qualify vendors for the RFP process,
- wait for their response,
- analyse the gathered information,
- shortlist the best options,
- evaluate the shortlisted companies in more detail – through an RFP,
- select a final vendor.
As you can see, the RFP is just a single step on the rather bumpy road of selecting an IT partner, yet it can be a pretty tricky one. That’s why we’ve prepared a list of practical tips to walk you through the RFP process smoothly, without getting bogged down.
RFP: 5 best practices
- Understand the business case
Start with yourself and define what exactly you’re trying to achieve, and what you expect from the product or services that you’re looking for. Knowing what you’re buying may sound obvious, but you would be surprised how many clients cannot specify what they actually want. - Focus more on the output rather than the input
In other words, don’t tell your potential vendors what the solution should look like; instead, focus on what you want to achieve with it. After all, they are experts in their fields and you are hiring them to find the most optimal way to help you reach your goals. You can work it out with them during specialised workshop. - Determine the expected type of contract
The legal and procedural side of a contract is no less important at this stage. Any non-compliance may be a reason for you to eliminate the company from your shortlist, so it’s important to be clear and honest from the very beginning. Focus on the terms of cooperation, payment options and principles that are essential to you. You can also have a look at the checklist to ensure that you include in the contract all the key issues. - Describe how the relationship should work
Be precise in terms of the type of relationship that you want to have with your IT partner, how you expect the governance model to function, and what kind of service metrics you want to achieve. - Respect your own capabilities to deliver on time
Remember that the RFP process is a two-way street, so don’t set timelines that are simply too ambitious and unrealistic. Be responsive and don’t miss your own deadlines.
This list will help you avoid the most common mistakes that many businesses make during the RFP process. And to make this even easier on you – we’ve prepared an RFP template that you can either fill in straight away or tailor to your specific needs first.
It’s also good to keep in mind that even though an RFP is the most popular choice in the vendor selection process, there also exist other alternative solutions.
RFP alternatives
The RFP is designed for companies that want to follow a more traditional approach to making supplier comparisons between the same types of solutions. But there are also some other options that you should definitely know about.
Visionary Sourcing
If you want to focus more on design and get a few different solutions to choose from, then you may want to consider Visionary Sourcing. This is a process that was designed by the sourcing experts behind Horizon Seven. How is it different from an RFP?
- It includes a face-to-face workshop designed to help the client come up with the best solution.
- It’s focused on the business case.
- It involves a fewer number of suppliers, usually 3-4, instead of 12-15 or more.
- It involves parallel contract negotiations.
- It requires assistance from external advisors though the general process.
Other options
If your time is very limited and/or you have a smaller/short-term project to run, you may also choose to go a simpler way. For example:
- You could send a brief RFI to selected companies, and then organise a video conference or meeting with the vendors on your shortlist, instead of starting an official RFP process.
- You could prepare a detailed scope of work, send it to the chosen companies and ask them how they would approach this. Then you could make a decision based on their responses.
- In addition, there’s always the option to invite a few companies to work with you on a very small sample project to see how it goes. This would allow you to avoid a lot of theoretical debates, and after clarifying all the necessary details, you could get straight to work. This would allow you to not only test their skills and knowledge but also give you a chance to get to know their processes, values and culture in practice.
To sum up
There are many ways to select the right software company for your project, so choose the one that fits your needs best. Your decision should be based on your own preferences, as well as on the scope and nature of your project.
However, if you don’t feel like experimenting, you can always count on an RFP; just don’t forget to follow the above-mentioned set of best practices. It may be the safest option to go with since it’s the one that is ultimately chosen by many and also provides a detailed description of the project and proposal. Here at Future Processing, we even have a ready-to-use RFP template that you can use during your own vendor selection process. And in case you still have questions about any of this, we’ll be more than happy to answer them and help ease any doubts that you might have.
