What is a Request for Proposal & How the RFP Response Process Looks Like
What is a Request for Proposal or RFP?
A request for proposal (RFP) can be defined as a type of bidding solicitation in which a company or organization announces that funding is available for a specific project or program, thus allowing companies to place bids for completing the project.
The RFP outlines the entire bidding process, as well as the contract terms, but also provides guidance on how a bid should be formatted and presented.
This bidding solicitation usually includes full background on the organization making the bid and its line of business. Additionally, the request sets out specifications presenting the solution it seeks, and the factors used for evaluation disclosing how all the proposals will be eventually graded. The request for proposal can also include a statement of work, presenting all the tasks that need to be performed by the winner of the bid and a timeline which should be followed in order to provide the finished work.
There are situations in which the complexity of a project may result in the need of creating a formal request for proposal, allowing the organization to benefit from an increased number of bidders and perspectives when looking for an integrated solution, coming from multiple suppliers.
Let’s simply take a business that is now trying to make the switch from a paper-based system to a computer-based one. They will surely request proposals for the hardware, alongside software and user training, highly needed for establishing and integrating the new system into their existing business.
What do we need to know about the RFP process?
Before making the first steps in this direction, let’s try to fully understand the way it works. To sum it up, the RFP process is divided into two main steps: the RFI and the actual RFP.
The first one stands for Request for Information and it’s a way for a company to find out essential information about another one. It starts with the first company issuing an RFI, with the goal of finding a group of companies able to help them achieve their goals.
The RFI consists of a set of questions regarding the company’s history, capabilities, future plans and other essential details. When the company that issued the RFI gathers all responses, it will be able to put together a list with all the potential contractors.
After this entire process is over, the company issues the Request for Information, which provides the details needed by everybody interested in working with the company. Obviously, the most important step of this stage is the proposal, as this is where the responding company shares their solution, along with the way it will be implemented.
RFP template: what should your Request for Proposal contain?
Now that we know how this entire process goes, it’s time to focus on another important aspect. Specifically, the proper way to conceive a request for proposal.
Creating an RFP is considered by professionals art and science, according to Brendan Hufford. He also put together a comprehensive list of the must-have sections of an RFP template, as follows:
- Company and Business Overview
- Customer Segments
- Customer Insights
- Project Scope
- Current State
- Future State
- Team and Metrics
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- Products / Services
- Website Navigation
- Content Management System (CMS) Requirements
- Design UI / UX
- Third Party Integrations
- RFP Deliverables
- Criteria Selection
- Attached Document
However, it’s not just about having these items on your list, since what matters the most is what goes into each of them. Every section on the list allows interested partners to learn about your company and proves that you are aware of them as well.
What does the RFP response process look like?
Moving on, let’s take a few moments to talk about how the RFP response process unravels. Below you can find a practical example of an RFP process, as presented here.
1. Review the RFP document
- Identify production and delivery issues that could impact the process.
- Establish the project scope.
- Keep a running list of questions.
2. Identify project team members
3. Identify and make initial contact with sub consultants
4. Create a table of contents for the response
5. Request detailed information from sub consultants
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Keep in mind, the best way to create an RFP response is to collaborate. If you have a proposal manager running everything, you will end up with a better strategy, and a better result thanks to the diversity of your team.
Who do you send the RFP to?
Finally, now that the RFP is complete, you must send it.
Most people tend to search for recipients on Google, to find top vendors, but this is actually one of the biggest mistakes companies make, as the search engine algorithm actually has nothing to do with how successful they will be on your project.
A second mistake they make is going only with the most important players. If a company is big, this doesn’t mean that it is your best option.
Finally, avoid, as much as possible, sending an RFP to too many suppliers. Evaluating 10 responses, let’s say, is way faster and cost-efficient, than doing it for 50 responses. Also, you may end up with poorly-evaluated proposals, due to the lack of time, and can even draw a conclusion based just on the estimated pricing at the end of the proposal.
With all these three mistakes in mind, do your research and target your RFP to partners that will return the best responses.
Responding to RFPs can be pretty demanding for organizations, but what if there was a software that could complete this task? This would significantly improve the speed of the process, not to mention its impact on the efficiency of a team.
Using an RFP software significantly improves the manual process, as it can deliver the highest quality responses for each section, faster completion time and less involvement from the team.