A Request For Proposal or RFP is one of the most important documents you will have to write if you're looking to make a significant purchase. It helps organizations set out their requirements and engage with potential suppliers in a transparent, structured, and fair way.
If you’re completely new to the topic, or you just want to boost your knowledge before starting the procurement process, you have come to the right place. This article will go through what an RFP is and define the writing procedure, including the main components you can’t miss.
Ready to learn more about RFPs? Let's get started.
What is a Request for Proposal?
So what is an RFP, and what is it used for? It is a business document organizations use to announce new projects, ask for bids, or announce new workstreams to interested parties and suppliers. They are used to explain the scope and objective of the project, document the stakeholder requirements, and explain the selection criteria and the contract terms.
In particular, this type of documentation lets organizations deal with potential suppliers and partners transparently and consistently. Put simply, by publishing an RFP, you are asking potential vendors to respond with their best estimates on how they would accomplish what you need to get done.
A common use, for instance, is when a business is searching for different software purchase alternatives to fulfill a specific need. In this case, they can build a custom-made RFP for this task and hand it out to the different suppliers to fill out. This way they ensure a common ground to make the right choice.
RFI vs. RFP vs. RFQ vs. RFA vs. BMP
But what about RFIs, RFQs, RFAs, and BMPs? You might get them mixed up and, although they are all part of an organization’s procurement process, they each take care of different aspects.
First, let's talk about the terminology.
- RFI (Request for Information) - An RFI is used to gather information and understand potential suppliers, products, or services available in the market. It is often used in the early stages of the procurement process before the RFP stage to gather preliminary information and get an overview of potential suppliers.
- RFQ (Request for Quotation) - An RFQ looks after obtaining price quotes or bids for specific products or services. It is used when the organization has clearly defined requirements and seeks pricing from vendors. The request must set out the quality and quantity of products needed so that all responses can be compared consistently.
- RFA (Request for Application) - An RFA is used for grant and funding procurement activities. It is a document that invites organizations or individuals to submit applications or proposals for specific programs or projects.
- BMP (Best and Final Offer, Best and Final Proposal) - BMP is a term used to indicate the final offer submitted by a vendor after participating in a competitive bidding process. It is typically used when multiple suppliers have submitted proposals, and the organization requests revised and improved offers before making a final decision.
Let's take a look at each one in a little more detail:
|RFP||Request For Proposal||To provide a structured response for potential suppliers to engage with.||Used in the mid-stage of a procurement process as a way of engaging with potential suppliers and partners.|
|RFI||Request For Information||Used to gain an understanding of the product/service landscape.||Used in the early stage of the procurement process to understand the market and its key players.|
|RFQ||Request For Quotation||Used to get competitive pricing information from potential suppliers.||Used to get pricing information based on the specified scope of work.|
|RFA||Request For Application||Used to facilitate grant-based procurement activity.||Used to outline eligibility and evaluation criteria, funding amount, and application process for grant-based procurement activity.|
|BMP||Best and Final Offer, Best and Final Proposal||To obtain the final and improved proposal from a potential supplier.||To help the requesting organization make a final decision.|
Why is a Request for Proposal important? 6 benefits
Some benefits of using an RFP when kicking off a new purchase initiative in your business include:
- It makes your organization easy to deal with from a procurement perspective. It sets out the framework and contact details needed for supplier engagement.
- It ensures that the requirements for the new product or service are captured in a single, central location.
- It makes the process transparent and fair and ensures no potential for bias.
- It mitigates risk by explaining the business terms, conditions, and legal or regulatory requirements. It reduces potential errors and misunderstandings and ensures everyone is on the same page.
- It provides a documented record of the procurement process, capturing the requirements, selection criteria, regulatory, compliance, or legal constraints, and decision-making process.
- It helps to build relationships. The process enables vendors to engage with the organization, ask questions and clarify any confusing points. This sets out a culture of collaboration, support, and communication between both parties setting a solid basis for a supportive working relationship.
13 components of an RFP
The power of an RFP lies in the clearness of its content, which should define an organization’s specific project and requirements to be communicated to external vendors.
The following components will guide you through the main aspects to include:
- Introduction - An overview of your organization, its values, and what it stands for.
- Project objective - What you will achieve from the project and what needs to happen to accomplish the project goals and objectives.
- Project scope - Explain in quantifiable terms the project deliverables so the supplier can create an appropriate response.
- Requirements -Detailed and specific requirements that set out exactly what is needed from the supplier.
- Key deliverables - What is needed from the supplier to deliver the project successfully.
- Timings - A clearly defined timeline that calls out key milestones and deadlines.
- Any vendor prerequisites - For example, ISO 20000 accreditation.
- Evaluation criteria - How vendors will be evaluated and scored based on their responses and details of the scoring system you plan to use if appropriate.
- Any contractual, compliance, or legal requirements.
- Budget and payment details.
- Vendor qualifications - You can ask for samples of previous work and proof of success in previous projects.
- Submission guidelines - How the response should be submitted, the format and details of any portals or shared mailboxes.
- Contact information/point of contact for any queries.
Request for Proposal process
Once again the same disclaimer. Every organization is unique, and there will always be requirements that are specific to organizations and their people. But, put in general, here are the basic steps in an RFP process.
- Build your team - For this, include all key stakeholders and ensure the voice of the customer is represented. Your team will be responsible for drafting the RFP. You must include subject matter experts, input from finance to ensure the costs are acceptable to the organization, and support from your legal team.
- Draft your RFP document - Create your document based on the headings we've looked at in the previous section (particularly, don’t forget project goals, constraints, and budget). Also, ensure you build a review cycle to have the appropriate level of oversight.
- Distribute appropriately - Once your RFP has been created, it needs to be issued so potential suppliers, vendors, and partners can review it. The most common ways they are issued are via email or a dedicated portal on your corporate website.
- Create your shortlist - Once you have your responses, you can create a shortlist based on the organizations that best fit your requirements. Evaluate each candidate based on your assessment criteria.
- Award contract - Finally, make sure you do your due diligence, ask for samples of previous work, check references, and ask to speak to existing customers.
How to write a Request for Proposal?
Writing an effective RFP will take time and effort. We've already outlined what your RFP should contain and given some example headings, but the best advice we can give is to really look inside your business. What outcomes do your organization and its customers want from this engagement? What are your requirements? What are the types of vendors and suppliers that you want to work with? What are your core values?
When writing your RFP document and going through the different components, keep the following questions in mind in mind to guide you through the vendors main points:
- What's different about you as a supplier or partner? What sets you apart from the competition?
- What experience do you have in our industry? Do you have any customers you'd be willing to let us speak to or any reference sites if appropriate?
- What members of your team would be working with us on this project? Do they have the appropriate qualifications?
- Do you offer trial licenses so we can get a feel for your product and how it could support our objectives?
- What is your typical implementation process? Do you offer warranty periods / early life support? How long does it normally take to transition into BAU support?
- What training and Knowledge Management do you offer?
- What does your customer support model look like? How do you handle it when things go wrong?
- What does your release/upgrade cadence look like?
- Do you have the capacity for regular service reviews? Will you offer SLAs, OLAs, and XLAs so we can measure experience and technical performance?
- How do you build Continual Improvement into your offering?
IT Request for Proposals: RFP templates
When making large IT purchases, it's essential to engage with the RPF process to ensure that you get a quality outcome. Looking for IT solutions is a common scenario amongst businesses that can be quite tricky. This is, not only because of the wide range of options out there, but also because of the large amount of technical language involved.
Two major IT procurement examples are ITSM tools and ITAM tools, so let's look at each in more detail. We have included some of the basic information your RFP document should include if you're looking to acquire one of these tools.
IT Service Management RFP template
As well as the standard RFP content we've discussed previously, ITSM tool RFPs should particularly include the following:
- How are core ITSM practices covered?
- Self-service capabilities.
- Automation and AI features.
- How easy is it to install and modify the solution? Is it codeless?
- How easy is it to integrate the tool? What about APIs?
💡 Need an ITSM RFP template? Click here to download it!
IT Asset Management RFP template
An ITAM tool RFP should not leave out the following information:
- How are core ITAM practices covered?
- How easy is it to integrate the tool with your existing IT infrastructure? Can we communicate with Microsoft AD, for example? What APIs are included?
- How does the discovery aspect work?
- What support is in place for Software Asset and License Management?
And, if you’re still eager to dig a little deeper, we have also assembled an ITAM RFP template and an ITSM RFP template (with free downloadables included!). There you will find all the information you need when designing a document to purchase these tools.
To sum up
Request For Proposals are a structure for vendors to engage with a potential customer organization. If you’re starting a new project and need to compare different purchase alternatives, building this document will help you organize and standardize the process and make sure your final choice is aligned with your needs.
Basically, building an RFP means having your requirements in a central place and a transparent and fair way to assess potential suppliers and partners. Although to work best it must clearly capture your business interests, there are a few main components and useful guidelines that can help guide the process and make sure everything important is included.
If you need further help with your ITSM or ITAM RFPs, remember we have a team of experts ready to jump in – all you have to do is book a quick call!
Frequently Asked Questions
What is the purpose of an RFP?
An RFP aims to set out requirements and make it easier for vendors to engage with you. It outlines the organization's objectives, product or service needs, evaluation criteria, and terms and conditions. Vendors are expected to submit proposals that set out how they would match what is set out in the RFP.
How long is a typical RFP?
As long as needed! There is no one-size-fits-all; the RFP length depends on your project's size and complexity.
What happens after the Request for Proposal?
Review and decision to award.
When not to use an RFP?
If your project requirements are straightforward and you already have a supplier or partner in mind.
Who usually writes the RFP?
RFPs are best written by a team of colleagues so that multiple perspectives are considered.
What makes a bad RFP?
If you don't know what you want! Sounds simple, we know, but if you're not clear on your requirements, then you're not going to get the best out of your responses.