An RFP, or request for proposal, is a document created as part of the procurement process, wherein a business (i.e., buyer) identifies a need for a product or service and solicits proposals from suppliers and/or vendors (i.e., seller) asking them to offer solutions and bid for the job.
The suppliers/vendors then create and submit proposals (i.e., bids), in which they outline their ability to deliver on the buyer’s business objective, with the goal of winning the bid and turning the proposal into a contract and the requester into a client.
We’ve created this guide to help you better understand the RFP and proposal management software market. Whether you’re looking to invest in RFP software for the first time or looking to upgrade your current system, this guide can help you make a more informed purchase decision.
Here’s what we’ll cover:
RFP and proposal management software helps buyers and sellers manage each side of the bidding and procurement process:
These tools act as a centralized workspace, helping to increase the transparency of the workflows involved with issuing and responding to RFPs and facilitating collaboration among users.
Another key function of these systems is centered around making critical information more easily accessible:
It’s important to note that “RFP software” is an umbrella term that refers to the tools used on both sides of the RFP process:
While these processes are absolutely related, they are on opposite sides of the transaction process, and it’s not common to find them together in one integrated suite.
In fact, you’re more likely to find proposal generation tools tied with your sales and CRM systems than with those used to issue RFPs.
As such, it’s important to understand the differences and similarities between each process and tool set to ensure you’re choosing the right RFP software for your business:
Issuing an RFP: Businesses issuing an RFP are seeking proposals from a supplier/vendor for a product or service that will help them solve a specific problem and/or achieve a specific business objective.
RFP’s often come after an exploratory request for information (RFI) and before soliciting an invitation to tender (ITT) and request for quote (RFQ) from a shortlist of approved suppliers/vendors.
The core steps within the RFP creation process include:
Responding to an RFP: Suppliers/vendors responding to an RFP are being asked to deliver a product or service to help the buyer achieve a strategic business objective. As such, they need to propose a solution that will outshine their competitors and help them win the job.
To do so, they need to create a detailed, professional proposal that meets the requirements laid out by the buyer. But first, they need to receive and review the RFP before deciding whether or not it is a worthwhile investment to pursue the sale.
As such, it’s important that suppliers/vendors actively take steps to identify the prospective customers in their space and let them know they are open to receiving RFP requests. They should also create a standard RFP response template that they can modify according to the request at hand.
The core steps within the RFP response and proposal generation process include:
Look for the following functionality as you evaluate RFP software and proposal management solutions:
|Contact management||Maintain a catalogue of important contacts within your industry.
|Task management||Create and assign tasks to resources. Schedule start and due dates and track progress to completion. Set up alerts to notify users when assignments are nearing their due date or are overdue.|
|Requirements management||Assists users in performing stakeholder analysis to capture, document and prioritize requirements during the initial planning stages, then managing change and tracking communications regarding those changes over the project life cycle.|
|Workflow management||Define structured workflows for various business processes via rule-based decision making, to better manage and control the flow of work through the system. Users know where a work item has been and where it needs to go next, which increases transparency and accountability. Assists with performance monitoring and process evaluation, so business units can identify inefficiencies and strive for continuous improvement.|
|Document management||Create and edit documents, share with other users, track changes and different versions. Often includes the ability to create and save templates, set up custom fields, add approval workflows and electronic signature. Buyers need document management for RFP creation and sellers need this capability for generating proposals.|
|Content management||Create and manage digital content. Maintain a centralized repository of past RFIs and RFPs (for sellers, this would include proposals in response to the RFPs), allowing stakeholders to easily access important information and potentially even reuse documentation for future needs. Organize content using tags, categories, filters and attributes, making your content management system easily searchable.|
|Contract management||Once a job has been awarded, both buyers and sellers need to track and manage the contract throughout the project life cycle. This includes authoring the contract, getting approvals, tracking requirements and obligations, then maintaining compliance with the contract commitments during project execution.|
Additionally, RFP response systems may include applications for, or integrations with, your sales pipeline management and customer relationship management (CRM) tools.
Both RFP creation and response systems may include applications for, or integrations with, project management tools, so that if or when proposals are awarded, the job can be transferred appropriately.
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