Creating a Request for Proposal (RFP) is a crucial business practice that allows a company to identify and engage the right supplier to satisfy a requirement. A well-written RFP substantially increases your company’s chances of getting the services or products you need at a price that works for you. The ultimate goal is to ensure you’re working with qualified suppliers at what you consider the best value.
In this blog, we will give you a clear picture of what RFP is and list five tips for writing an effective RFP that can help you get high response rates.
What Is RFP?
According to Wikipedia, A request for proposal (RFP) is a document that solicits a proposal, often made through a bidding process, by an agency or company interested in procurement of a commodity, service, or valuable asset, to potential suppliers to submit business proposals.
In simple words, an RFP is a document created by a buyer requesting information about a product or service requirement, generally sent to suppliers to propose solutions. The purpose of an RFP is to enable buyers to compare the features and prices across potential suppliers.
A great RFP contains clear criteria that are important to a buyer. By properly structuring and articulating the requirements in an RFP, you can identify how well each supplier understands your project and set benchmarks to measure a project’s success later.
This is one of the biggest challenges in crafting RFP, mainly because there is no standard format. The typical RFP includes sets of questions that are split by section and subsection, which is more important for large or complex requirements.
RFP responses can be as simple as yes/no interrogations or require narrative responses. Additionally, suppliers may be requested to submit other information and send additional documents such as the company introduction, why they believe they’re a better fit than the other competitors, etc., to explain the rationale behind the answers.
What Key Elements Should Be Included In RFP?
Though each RFP varies based on the goals and needs of a project, there are a few core elements that should be included in most categories (according to HubSpot):
- Project Goals and Scope of Services
- Anticipated Selection Schedule
- Time and Place of Submission of Proposals
- Elements of Proposal
- Evaluation Criteria
- Possible Roadblocks
Tips To Write A Compelling RFP
When you are putting together an RFP for any category, it is critical to provide a clear overview of the project to attract the best responses. With these five tips in mind, you can be confident that the RFP process will be productive for you and the suppliers who elect to participate.
Planning what to put into an RFP will save you a ton of time in the process of reviewing and selecting the right suppliers. Regardless of the scope and complexity of your RFP, these three main components should always be at the top of your mind. (i) Making sure you have clearly defined your need, (ii) establish your communication strategy and (iii) define your evaluation criteria.
An RFP is all about solving problems for your business. To draw great responses from the suppliers, you must ask the right questions. How can you achieve that? Collaborate with stakeholders. Coordinating with people who will be impacted the most by your purchase will help you identify the challenge, the tools you need, and define success. Bringing these people into the early stage of writing RFP will help prevent scope ambiguity and unclear requirements to suppliers.
Be careful to separate our needs from wishes. Unless money is no object, you may have to clarify what you must have versus what you would like to have, if possible. The process of determining this also has an impact on how you set your evaluation criteria.
Set Important Dates
People usually underestimate the importance of time when writing an RFP – both theirs and the suppliers’ time.
- Write all critical deadlines that suppliers should know, such as the response date, pre-bid document submissions, implementation date, etc.
- Evaluate all timelines and ensure they are adequate to get the job done – from how long it takes to get responses to how long it will take you to evaluate them.
- Try to balance your needs with the reality of how long it takes to respond appropriately to an RFP. For example, if you care mainly about price, don’t ask hundreds of nice questions to know but don’t add value to your evaluation process, and the answer to which is likely to be formulaic and non-value-adding (ex: tell me your 5-year strategic plan). Buyers sometimes forget that every question asked requires the response to be evaluated, scored and ranked.
Be detailed without being prescriptive
Focusing on detailing your project goals instead of telling suppliers how to do the job will encourage respondents to freely use their expertise and insights in presenting their solutions. Suppliers are more likely to respond to RFPs that gives them room to be creative and suggest solutions.
Remember to ensure that you can still evaluate the responses relative to your needs. This is, after all, about what you want.
A great RFP should include as many details as possible to describe the requirement so that respondents don’t have to guess what you need or have to make lots of assumptions. By removing the guesswork, you allow suppliers to focus entirely on the solution – such as optimizing a budget range, satisfying both low and high-level requirements and so on.
RFP Is A Time-Consuming Process…
The better an RFP is, the better the proposal your suppliers can send to you. The best thing to remember is – if you can’t describe what you want, then there is a high likelihood your supplier cannot describe the solution in a way that will be acceptable to you. Up-front work that results in clear and concise requirements, timelines, expectations and evaluation criteria yields the most effective responses (assuming you engaged the right suppliers!)
One way to reduce the challenge is to use automation to eliminate the non-value-added effort and make sure the right suppliers are in your respondent pool.
Remember, the software can be your friend (finding potential bidders, distributing information and coordinating responses, receiving bids according to policy standards, etc.) and can also be your enemy (asking 100 boilerplate template questions when only ten would do the job). A judicious combination of planning and automation helps you achieve your goal – working with qualified suppliers at what you consider the best value.
In the SupplierGATEWAY Sourcing app, you can quickly post new opportunities to promptly find prospective suppliers that are likely to meet your needs. The easy-to-use Bid app accelerates and streamlines the process of engaging suppliers to request bids and quotes and manage responses, even for small projects. Also, The software enables you to schedule web meetings, conference calls, or even in-person meetings with selected suppliers – all in one place. If you’re interested, watch our demo and get started today for free.