• Request for Proposals (RFP): What They Should Include
  
  

Before requesting for proposals from vendors it is important to be clear what internal business problem will be solved by the product or service. Even though all requirements may not be defined pending your evaluation of what solutions are available in the marketplace, know to a reasonable level "must haves", "show stoppers" and "nice to haves".

There are basic elements of an RFP that should be included no matter the product or service. Consider eliminating the prospective vendor if they are unwilling or unable to provide the information. Although not an exhaustive list, here are 10 Steps to Weigh During an RFP Vendor Evaluation:

1. Financial information and company history
Financial and company history speaks volumes about the success and longevity of a business partner. If the product or service being purchased is a temporary fix this aspect is not weighted as heavy. Often times the mistake is made that this is simply a vendor relationship that can be tossed aside. However, if a collaborative partnership is wanted this type of information is vital.

2.Client references: including satisfied and non satisfied
It is well established that happy clients tell the story far better than a salesman ever could. Marketing 101 reminds us of the 10X10X10 rule when a company tries to make up for loss sales due to dissatisfied customers. Client references are one of the cornerstones to a successful RFP and vendor selection process. Even though it is clear that the vendor will provide “success” story clients, chances are in this age of sophisticated networking if dissatisfied customers are out there, they can be found.

3. Service levels and maintenance
Although maintenance primarily refers to software, hardware, MHE type vendors, service levels apply to both product and services. Depending on the business problem to be solved by the solution being sought, service levels can make all the difference. After all, if the service is outsourced fulfillment and the cycle time is not reduced or value added services (VAS) are not performed up to par, then most likely this vendor is not the appropriate long time partner. During the RFP process service levels should be weighted accordingly.

4.Features and functionality
This is the part of the RFP which should be weighted the highest. Most likely the feature, functionality or service is the very reason the product/service is being sought in the first place. Does the solution best fit the problem? Is the solution scalable, flexible and easily changed as the business rules change? How many modifications are required versus standard functionality? Will this solution not only solve the problem, but enhance the work of employees, and provide additional value to customers? Keep in mind, the more specific the requirements the more accurate the RFP and thus the ultimate product/service selection.

5.Upgrade paths, new releases, patches & bug fixes
For any business that has installed software or sophisticated equipment of any type, patches, upgrades and like become an integral part of the process. Obviously the more customization the less upgrades and fixes can be applied. However, when weighting this factor it is not as critical as other components. Most businesses, although not totally unique, have specific nuances that oftentimes cause upgrades or patches useless. Consider again the problem being solved and weight this factor accordingly.

6.Databases, scalability, platforms & architecture
Again this applies to software; however in today’s environment of fast changing technology it is important to determine the best strategy considering business changes, technology changes, and possible government or customer mandates. One example is the much talked about RFID revolution. The amounts of data that will be collected are enormous. Having the appropriate database configuration and architecture can make a significant difference.

7.24x7 availability and services
Whether product or service, these days it is imperative that assistance be provided around the clock. As many companies due business all over the world being able to communicate with the service provider for help, downtime, and “rush” situations is a must. This level of service often times set the provider above the competition. Be sure if this service is required it is dully noted in the RFP process.

8.Issue resolution and escalation processes
Issue resolution and the escalation methodology go hand in hand with the aforementioned service of 24x7. When critical downtime or deliveries and the like need to occur, but somehow go a rye, how will the provider step up to the plate? Ask for specific documentation and customer specific examples to establish a solid foundation of satisfactory issue resolution.

9.Types of personnel and number of employees
In addition to how long the provider has been in business, what types of personnel are available? For example, if a software company is the personnel equally divided among development, implementation and service? Or are they heavily staffed in development? If a service provider, such as a 3PL, do they have adequate operations and customer service staff? Are they equipped to handle complex freight management? Or are they expecting the customer to provide most of their own operational expertise? Since this area is critical to running and/or maintaining execution and operations, it is a pivotal part of the RFP process.

10. Pricing, consulting and/or ongoing service fees
Finally are the pricing elements of the provider. Consider not only the price quoted, but the value add within the price. For example, if the first year license fee also includes maintenance and other fees, but a discounted license fee does not, consider the added value. Also consider if the provider is willing to have an extended year contract to reduce up front fees and long term cost. If they will not, but insist on a year to year deal, ask why. In addition, consider paying fees for services such as hosting and help desks, as these are extremely costly to do internally between hardware, staffing, training and the like. As always a good negotiation is the key to a successful deal.


As previously stated, this is by no means an exhaustive list of what to pursue during the RFP process, but it’s a clear starting point. For assistance with vendor selection as well as other type of supply chain initiatives, call on Navesink Logistics, Inc.