Proposal Management

What is RFP Software?

RFP stands for Request-for-Proposal.  RFPs are used by customer organizations to outsource any of the projects or assignments when they do not have either the competencies or the capacity to manage it themselves.  Situations when customer organizations would create RFPs include:

• Design and develop a customized software.
• Design and construct a shopping mall.
• Seeking management consulting services.

When customer organizations undertake big and long duration projects to be delivered by external vendors, business leaders must meticulously document their requirements, specifications, quality, and other parameters.  Further, customer organizations must define evaluation criteria along with weightages that would be used to select potential vendors.

The process of evaluating vendors for low-value and short-term projects is relatively easy.  However, on large and high-value projects, the evaluation and selection process must be immaculate.  At the same time, the process must be transparent, swift, objective, and collaborative.  Managing vendor selection via spreadsheets, documents, and emails affects the quality as well as the speed of RFP creation.

An RFP Software enables customer organizations to:

• Streamline the entire process of documenting requirements, specifications, and other parameters.
• Digitizes RFP creation with relevant workflows, templates, parameter weights, and decision-nodes.
• Enables seamless collaboration and document management across multiple cross-functional teams.
• Automatically creates the complete RFP document with all the relevant sections, sub-sections, and company branding.
• Allows easy comparison of vendor proposals before the final selecting of vendor(s).

In a nutshell, an RFP Software increases the speed and accuracy of RFP creation along with complete data integrity in a collaborative manner.

What is RFI, RFQ, and RFP?

The terms RFI, RFP, and RFQ have distinct meanings as well as unique situations when each of these would be used.  Unfortunately, in most of the situations, these are used almost interchangeably.

Let us expand these terms.

• RFI – Request for Information.
• RFP – Request for Proposal.
• RFQ – Request for Quotation.

Request for Information (RFI)

Imagine an industry conference where two professionals interact for the first time.  During the conversation, they share their business cards to let the other professional know about his company, his role, and designation.  In this situation, there could be a possibility that both the professionals realize that there is nothing common between their organizations as far as business opportunities are concerned.   Similarly, when a business entity reaches out to another business entity to understand if there are any business opportunities, they would use an RFI. With the advancement of internet-based technologies, the need for RFI has virtually disappeared; most of the basic information can be made available on a company’s website.

Request for Proposal (RFP)

A customer organization uses an RFP when they know their business problem but are not competent to solve it.  For example, an engineering company would like to implement a custom-designed software to create and manage their product designs.  However, they may not have the technology and software skills to develop the software.  In this context, they would look to potential software vendors who have the expertise and experience of developing similar software for other customers.  The customer organization would float an RFP inviting potential vendors that meet the evaluation and selection criteria.  It is important to note that vendor Proposals are evaluated based on the overall solution and not just the price.

Request for Quotation (RFQ)

A customer organization uses an RFQ when they know their business as well as the solution, but they can not create the solution themselves.  For example, a company wants to build their new office campus and have the complete design ready (including building area, number of floors, painting, flooring tiles, elevators, washrooms, meeting rooms, workstation areas, etc.).  In this case they are seeking an RFQ from potential construction companies who could deliver the office campus that meets the specifications and parameters defined.  It is important to note that vendor Quotations are evaluated based on the price and the terms and conditions.

What is RFP Response?

When customer organizations want to procure products or services from external vendors, they use RFI, RFP, or RFQ.  Let us expand these terms.

• RFI – Request for Information.
• RFP – Request for Proposal.
• RFQ – Request for Quotation.

What is Request for Proposal (RFP)?

A customer organization uses an RFP when they know their business problem but are not competent to solve it.  For example, an engineering company would like to implement a custom-designed software to create and manage their product designs.  However, they may not have the technology and software skills to develop the software.  In this context, they would look to potential software vendors who have the expertise and experience of developing similar software for other customers.  The customer organization would float an RFP inviting potential vendors that meet the evaluation and selection criteria.  It is important to note that vendor Proposals are evaluated based on the overall solution and not just the price.

What is RFP Response or Proposal?

When a customer organization releases an RFP seeking external vendors to offer products or services, each of the potential vendors submits their Proposals.  Creating an RFP depends on the nature of the industry, the complexity of the software, as well as capabilities (features and functionalities) desired.  Advanced software such as artificial intelligence, machine learning, the internet of things (IoT), blockchain, and others may result in a lengthy and granular level of details.  In general, a good RFP must cover:

1. Customer company overview
   This section provides an overview of the company history, its industry, domain, nature of the business, customer profiles, business locations, and others.
2. Background of the RFP
   Some examples: company shifting to digital transformation or company looking to improve overall efficiency, productivity, and effectiveness through automation or enhancing the software project management maturity from level 2 to level 4.
3. Business Objectives
   This section outlines the aspirations of senior management from a strategy execution viewpoint.  An example: to support a single version of the truth or to be an enabler for excellence in project delivery.
4. RFP-Specific Program/Project Objectives
   This section should indicate the specific objectives that this RFP aims to accomplish.  The success or failure of the potential service provider would be linked to the objectives described here.
5. Stakeholders
   This section indicates the stakeholders who have either interest and/or influence on the outcomes of the RFP Program/Project.
6. Existing Pain Points
   In this section, the customer elaborates on different pain points that exist and how they impact the organizational goals and objectives.  These pain points could vary depending on the nature of the RFP.
7. Functional Requirements
   This section describes in detail, the functional requirements that the ‘proposed’ software needs to address.  In some cases, a separate document may be provided which may take the form of a Systems Requirement Document.
8. Proposal Requirements
   In this section, the customer outlines the information that potential service provides must provide; examples include:
   • Description of the service provider’s business.
   • Description of the service provider’s credentials.
   • Description of the service provider’s approach to meeting customer objectives.
   • Description of how the project would be planned and executed.
   • Description of recommended solutions including best practices, etc.
   • Details of pricing and the format for the same.

There could be many more dimensions that could go into RFPs based on the value and complexity of the product or services intended to be procured.

What is Proposal Management Software?

In simple words, a software that enables the creation of comprehensive proposals is a Proposal Management Software.   A proposal management software makes the process of creating proposals very efficient, fast, and accurate – in a collaborative manner.

What capabilities should a Proposal Management Software possess?

1. Configures to industry and organizational needs.
   The proposal automation software must be specifically designed to the needs of the industry and its products and services (e.g., diversity across Engineering, Automotive, Telecom, Pharma, IT, etc.)  Further, they should be fine-tuned to the organizational standards and processes.
2. Templatizes the proposal creation.
   Organizations pursue numerous RFPs (Request for Proposal), that are spread across the diversity spectrum of size, value, complexity, geographies, uncertainty, risks, and duration.  The meticulousness and granularity of the proposals vary significantly.  Large proposals could run into hundreds of pages with numerous details embedded.  A proposal management software templatizes the proposal creation process based on diverse parameters.
3. Proposal scheduling and resource management.
   Proposal Management Software must be able to convert proposals into a ‘mini-project’ with capabilities of scheduling and resource management.  Doing so would equip decision-makers with insights related to the ‘cost of proposal management’ – thereby unearth inefficiencies and lower productivity!
4. Matches the various types of contracts.
   Organizations undertake projects and programs based on different types of contracts.  The standard types of contracts include (a) Fixed Price Contract (b) Time & Material Contract (T&M), and (c) Cost Plus Contract.  A proposal management software must enable the creation as well as tracking of projects and programs based on multiple contract types.
5. Transitions from proposal to project delivery.
   A proposal management software seamlessly connects proposal to project delivery and delivers transparency of proposal costs & profits with project costs and profitability.  A proposal automation software offers capabilities to define workflows to review and approve any changes to project costs and profitability.
6. Integrates with other enterprise applications.
   In today’s software world, invariably most organizations may have deployed enterprise applications such as SAP, Oracle, or a Legacy System.  A proposal management software is designed for seamless integration with existing enterprise applications to offer ‘one version of truth’!

How do you automate a proposal?

Organizations must consider automating their proposal making process if they pursue customer projects that are high value and complex, and that go through a competitive proposal evaluation and selection. Let us understand this further.

When customers outsource any work associated with products or services, they float an RFP (Request for Proposal) and expect potential service providers to revert with their “Proposals.” In general, RFP seeks potential service providers to share inputs including:

Service Provider’s –

1. Understanding of the customer’s business context.
2. Background (history, core services, and the management team)
3. Credentials (clients, comparable projects, industry association, recognition, etc.)
4. Strategy and methodology for the customer’s project or program.
5. Project plan and deployment approach.
6. Approach for data privacy, compliance, and risk mitigation,
7. Best practices from similar past projects.
8. Pricing and terms & conditions.

There could be additional parameters depending on the customer’s industry and the nature of the project.

Remember: You are competing with other vendors; you must build and respond with your proposal – comprehensively, accurately, and in quick time. Hence the need for automating your proposal-making process.

What does proposal automation entail?

1. Document your industry and organizational standards.
   Start with a clear documentation of what customers in your industry look for. Further, document the way your organization works – standards and guidelines.
2. Create Proposal Templates.
   Your organizations could pursue numerous RFPs, that vary in size, value, complexity, geographies, uncertainty, risks, and duration. The meticulousness and granularity of the proposals vary significantly. Large proposals could run into hundreds of pages with numerous details embedded. Proposal Templates could be created to cater to the value, size, and complexity of deals pursued. Proposal Management teams could easily pick up templates based on the nature of the customer requirements.
3. Define Proposal Workflows.
   Multiple stakeholders are involved at various stages of proposal creation. Proposals need inputs from different functional teams such as engineering, technology, compliance, finance, legal, and so on. Based on the value of the deals, organizations have different protocols for Go-No-Go decisions at various stages such as technical, legal, commercial, etc. The entire process from proposal draft creation to proposal approval must be a digitized workflow. Further, these proposals go through iterations and revisions. Proposal automation addresses all of these.
4. Proposal scheduling and resource management.
   In most cases, organizations approach proposal creation as a mini project with deliverable responsibilities with specific timelines. Proposal automation enables both resourcing as well as scheduling of every activity involved. Doing so would equip decision-makers with insights related to the ‘cost of proposal management’ – thereby unearth inefficiencies and lower productivity!
5. Virtual Collaboration
   Proposal automation now should shift to drive virtual collaboration across diverse stakeholders. Collaboration includes sharing comments, alerts, notifications, documents, and updates, in real-time and in a user-friendly social media-like interface.
6. Supporting Documentation.
   Proposal automation must digitize the creation, storage, retrieval, review, and approval of all the relevant supporting documentation such as client RFP, technical drawings, specifications, plans, etc. This approach ensures data integrity throughout the process.
7. Proposal Builder.
   When the organization is ready to submit the proposal, the process must be swift and automated. Proposal templates must be available with relevant sections needed along with the company branding and confidentiality aspects. Further, any tailoring should be possible based on project-specific needs. Through this, generation of the final proposal must be in a matter of few seconds!
8. Integrates with other enterprise applications.
   When the final proposal is ready, automation must ensure that relevant information such as financials and timelines are integrated with existing enterprise applications such as SAP, Oracle, etc. A proposal management software is designed for seamless integration with existing enterprise applications to offer ‘one version of truth’!

What are the processes and procedures in making a proposal?

Proposals are unique to the industries; a proposal for an EPC project is created differently than a proposal for developing a customized software or for delivering management consulting. While the specifics of the proposal may vary, the process of proposal creation is common. Here, we are considering a scenario where a prospective customer has floated an RFP (Request for Proposal) and then understand the process by which potential service providers would create Proposals.

Step 1: Understand Customer’s RFP

Understand the business need, problem statement, or the opportunity of the customer. These may include customer details such as:

• Customer organization overview
• Background of the RFP
• Business objectives
• RFP-specific program or project objectives
• Stakeholders
• Existing pain points or problem statement
• Functional & non-functional requirements
• Timelines
• Pricing

Step 2: Form Proposal Management Team

The next step involves forming a team that would work on the proposal creation. Depending on the customer’s RFP, you could identify key team members from relevant business functions that would contribute to the proposal creation process.

Step 3: Conduct Brainstorming or Focused Sessions

Schedule session(s) with the proposal management team to brainstorm and review the customer RFP thoroughly and assess the organization’s capabilities to deliver. In this stage, it is important that the team goes beyond what is in the RFP by trying to understand the business/market context to gain insights about future trends.
It is important that the proposal management team documents the agreed discussion points.

Step 4: Define roles, responsibilities, and timelines.

Now that the RFP is clear and the approach agreed upon, the next step would include –

1. Defining roles & responsibilities for the various inputs needed to build the Proposal.
2. Estimating and setting timelines for the completion of the deliverables.

Step 5: Consolidate the proposal inputs and finalize the proposal.

Team members must work on providing the agreed inputs that cover aspects such as:

• Understanding of the customer’s business context.
• Background (history, core services, and the management team)
• Credentials (clients, comparable projects, industry association, recognition, etc.)
• Strategy and methodology for the customer’s project or program.
• Project plan and deployment approach.
• Approach for data privacy, compliance, and risk mitigation,
• Best practices from similar past projects.
• Pricing and terms & conditions.

Note that this stage is iterative and goes through multiple revisions. Ensuring data integrity is critical in this stage. When it is felt that the all the inputs are available, the Proposal Lead would consolidate them into a Proposal Document.

Step 6: Management Review and Signoff

The proposal shared by the Proposal Lead would go through the final review by the senior management to ensure nothing is left out and that the entire organization is completely aligned. In this stage, signoffs are obtained from the relevant functional heads. Such a commitment is necessary to avoid issues, misinterpretations, or conflicts during project delivery.

Step 7: Share the Proposal with the Customer.

The proposal lead would go ahead and share the ‘final proposal’ with the customer with the hope that they would be shortlisted for negotiations before signing the contract.
To summarize, it is evident that having a top-class Proposal Management Software makes the process of proposal creation feel like a breeze.