How to Write an RFP
As self-sufficient as all companies might like to be, none stands alone. To concentrate on its core business, every company is going to have to turn to outside vendors to provide myriad products, services, and support. But relying on an outside vendor can be a dicey choice, and for non-commoditized goods and services it is a choice based on criteria that go beyond price. It is a matter of finding the company with the right technology or skills, with the team with whom you feel comfortable working, and with the approach that makes you comfortable about the quality and execution of the product or service they deliver.
Since such decisions can be so important, it is wise to take a methodical approach to the vendor selection process. One part of almost any such approach is the Request for Proposal (RFP), which is often the principal document for communicating requirements to a potential vendor. This article explores the role and elements of the RFP and provides an example of a typical RFP for the digital media space.
The RFP and the Vendor Selection Process
Selecting a vendor for a mission-critical service can be a choice that makes or breaks your business. For some services, like content delivery or collocation/hosting services, businesses can become totally reliant on outside vendors. Thus, it is very important to formalize the vendor evaluation and selection process in to hope of making the wisest choice as quickly as possible. Developing and issuing a request for proposals is often an excellent way to start the process. It forces you to define and organize your requirements and provides a framework for direct comparison of potential vendors.
As part of developing the Request for Proposal, you should identify a list of possible vendor candidates to whom you will send it. Depending on the market for the product or service, it is wise to identify five to ten potential vendors to receive the RFP. Assume that several vendors will decline to respond, and several vendors will be revealed as obviously inappropriate fits based upon their responses. You should then use the remaining responses to select three serious candidates with whom to enter into more detailed discussions and negotiations.
Their Request for Proposal response should establish that their price is within at least negotiable range of your budget and that they have the capability to meet at least your minimum requirements. After this is established, it is time to move on to the next step of the process—getting to know their team, product, or nuances of their services (including what they can offer in terms of a service level agreement, if applicable) in order to decide which vendor is ultimately the best match for your company.
The remainder of this document describes the Request for Proposal in more detail. It gives some overall advice on how to approach writing one, describes the sections typically found in an RFP, and provides an example of an RFP for digital media businesses so that you can see these sections carried out in more or less a "real-life" scenario.
Garbage In, Garbage Out
The reason the Request for Proposal can be so valuable is also the very same reason it can be difficult to prepare—because it forces you to document in detail your own requirements, expectations, and desires. In my experience, it is no trivial task to articulate exactly what you know you need, what you want, and what would be nice to have, as well as where you need help and advice from the vendor.
You should plan on putting the majority of your time and effort into defining your own requirements as explicitly as possible. Whenever you have a specific requirement or parameter for the solution, be sure to detail it as precisely as you can. In areas where you do not explicitly know what you need (as is often the case when you are requesting proposals), try to state the problem as completely and succinctly as possible, and explicitly state that you desire the vendor to propose a solution to the problem. If you know in advance any constraints under which the solution must operate, be sure to detail them. The more forethought you put into your own requirements, the more likely it is you will receive a proposal that meets those requirements, and the happier you will be with the vendor you ultimately select (and the happier they will be with you).
Elements of the Typical RFP
There is no single perfect RFP format. Many large companies, institutions, and government organizations with formalized sourcing processes have standard templates and response criteria. If you work for such an organization, check with whomever is responsible for procurement for your department. If you work for a smaller organization, what follows describes a few sections that are common to most RFPs.
If you know your requirements and have a well-defined project already, the form of your RFP may be very different than if you have a well-defined problem and are merely looking for a proposed solution. Certain elements or phrasings make more sense in the context of a search for a product as opposed to a service. As such, these sections are not comprehensive and in some cases may be overkill. Add or remove sections based upon your needs.