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ERP, Management, Management, RFP

October 3, 2014

Key Steps to Success in Your ERP Request for Proposal


The steps required to draft a request for proposal (RFP) tend to vary in function of the scale of your expenses category and the potential profits you hope to gain.  Often times this process is done too quickly in order to find a solution at a lower cost.

An example from a company seeking proposals for an information technology solution will be used to illustrate and to better understand the RFP process.

Figure 1: The 5 Key Steps to Preparing a RFP


There are a few things to avoid during the RFP process in order to ensure that investments are being made in the appropriate areas. Participant bias, ignoring important criteria, and an incomplete needs assessment are examples of problems that may hinder the RFP process.

One recommendation is to assign the management of the RFP process to an expert in that particular domain, who is independent of the participants in the decision-making process, in order to ensure that the recommendation is not biased.


1. Current State Review

The first step in preparing an RFP is to understand your needs. The acquisition of new professional ERP software must stem from your business needs, not your technological ones. Technology is used to support operational activities. Once you understand your needs at a higher, more strategic level, thoroughly assess your environment by defining the architecture of existing processes. To facilitate this task, you can build a grid of processes with the following columns: System – Owner- Features-Users– Interfaces – Costs (maintenance), and Costs of upgrades.

This first step helps provide an orientation with respect to business needs and the relevant costs.

The following deliverables should be produced:

  • The initial project plan for the RFP
  • Environmental specifications
  • Assessment of the current situation


2. Define Requirements

During the second phase it is important to define your detailed needs. Several workshops and training sessions should be scheduled with the relevant parties in order to collect the customer’s requirements and their potential benefits. It is at this stage that alignment should be achieved between all parties. During this stage, which is the most important in the process, all requirements of the targeted offer should be documented. The most difficult part of this stage is to envision the future situation in order to define what the current needs are.


3. Technology Options

This step concentrates on technology options. You need to analyze the current state of the market, list the pros and cons and then recommend options and combinations. The end of the third phase results in the development of a strategy for the RFP. It is recommended to organize informational demonstrations with vendors at this step. The meeting should last about two hours, where the vendor should introduce itself, and should present an overview of the solution and its functionalities. This meeting will also provide the vendor with an estimated budget and will refine the requirements (without the RFP for the moment).

The following deliverables should be produced:

  • The estimated budget of technology options.
  • Definition of requirements (future situations), updates.


4. Evaluation and Selection

This fourth stage is divided into several sub-sections.


a. Preparation and organization of the RFP.

Using the deliverables produced in the previous steps, you now have all the necessary information to organize and write your final RFP, appendices included. You can also determine the list of targeted vendors. Depending on the type of RFP, the number of targeted vendors will not always be the same.

The following deliverable should be produced:

  • the final RFP document.


              b. Review and Evaluation of the RFP.

This step corresponds to the analysis of responses to the RFP. In order to determine which vendor to select, you need to determine the selection criteria and analytical grid. Most companies use a point system. Vendors are evaluated according to precise categories that cover the detailed requirements, in addition to the total amount covered by the proposed solution. This analysis will guide the project team in the selection of vendors. You may not want to continue to the next step with all vendors, so you can pre-select and remove some. Be sure to identify who will analyze the submitted proposals. Key members of the project team and the “sponsors” are generally included in this group.

Following your decision, you must now notify the selected and non-selected vendors. In the case of unsuccessful vendors, you must inform them.  The purchasing department is usually involved in the process, and they will communicate directly with the applicants in order to maintain a certain degree of neutrality throughout the process. In the case of successful vendors, they will move on to the next step, which is the demonstrations stage.

The following deliverable should be produced:

  • Analysis of proposals and costs analysis.


             c. Demonstrations of Qualified Vendors.

During the demonstration, a vendor Evaluation Committee is established. Each member of the evaluation committee is responsible for judging the vendors on several points. The selection criteria grid must also be pre-defined in the preparation phase.  The rating scale varies depending on the type of RFP. For example, the document may contain a section called “Demonstration of Scenarios” focusing on scenario compliance, quality of compliance, simplicity AND complexity of the solution. Strengths and weaknesses will be weighed and judged by the Evaluation Committee.

The following deliverable should be produced:

  • The selection criteria grid.


                d. Comparative Analysis

Following the demonstrations of the vendors, you must prepare a document containing your analysis and comments regarding the results, in addition to a price comparison chart. Both documents will be part of your final recommendations.

The following deliverables should be produced:

  • Analysis and comments on the selected proposals
  • Price comparison chart
  • Document containing final recommendations.


                 e. Due Diligence

Due diligence should be performed at this stage in order to confirm that the price paid for the acquisition is “reasonable”. A negotiation phase led by the project team buyers is involved at the same time.  At the end of this stage, the final document of recommendations must be approved.

The following deliverable should be produced:

  • The final updated document of recommendations


Finally, once the winning proposal is selected, you can begin elaborating budget plans, resource requirement plans, and performing a return on investment analysis.  The implementation of the solution can then begin.

If you follow each of the key steps listed above, you can be sure to have a successful request for proposal process!


By Arthus Guyard Consultant
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