Procurement

How to Write an RFP for Procurement Analytics Software

Are you looking for an analytics solution and struggling with evaluating and assessing potential vendors? To compare vendors’ abilities to meet your organization’s needs, it might be a good idea to issue a request for proposal (RFP). To get informative answers from vendors and ultimately find the best software provider, the RFP should be well-thought-out.

Writing a comprehensive RFP is challenging and requires effort. At Sievo, we've received and answered hundreds of RFPs from leading procurement organizations around the world. Recently, we conducted a research into the 30 best RFPs we've received containing hundreds of different types of questions. Based on our experience, we wanted to share four key points to consider to write a best-in-class RFP. At the end of this post we have also provided a template with example RFP questions.

1. Preparing for an RFP

Define your scope

There are many procurement analytics software providers that all focus on different areas. As a rule of thumb, procurement application vendors can be divided into best-of-breed and full-suite providers. Best-of-breed vendors, such as Sievo, focus on a specific niche, for instance analytics, whereas full-suite providers aim at having all procurement applications under one platform. To narrow down the scope and to include only relevant vendors in your RFP process, it is a good idea to research to market and consider what services and solutions you would need. Shortlisting vendors and booking demo sessions with a few is a good way to get a basic understanding of their solutions.

Align internally

Include all stakeholders in your organization that have needs from the software. For instance, Procurement, IT, and Finance should internally align their requirements for the software. Including relevant people in your organization helps in formulating useful RFP questions. If you don’t know what you need from your software, it is difficult for the vendor to guess what type of solution your organization is looking for. They might provide you with too much or too little and irrelevant information, which is time consuming for you to review.

RFP template for procurement

2. Structuring an RFP

Give relevant background information

It's important to provide the vendors with background information for them to understand your current situation, your organization's needs, and the challenge you are trying to solve in addition to the purpose of the RFP, and other things that are relevant for your project, such as the timeline you have outlined. Stating necessary technical details at an early stage will prevent roadblocks in later stages of the project. Giving the vendors as much relevant information as possible at this point saves you some time, since you won't have to answer the same questions they would ask you individually. 

Depending on the software provider, some information vendors would often need from your organization to provide a pricing estimate include some or all of the following:

  • Amount or ERPs/source systems
  • Number of users
  • Annual spend
    • Internal and external spend
    • Addressable/non-addressable spend
    • Direct/indirect spend
  • Amount of taxonomy levels required
  • Description of categorization
  • Number of invoices and purchase orders

Provide clear instructions

The deadline for a response to the RFP and the preferred format in which the vendors should submit their response should be determined, such as an Excel spreadsheet or a PDF file sent via email. It is also a good idea to define the length of the response you wish to get, for example by word count. Standard format RFP responses enable you to make comparisons across vendors and also the vendors know how detailed their answers should be.

Share the next steps in the RFP process

It's a good idea to share with the vendors how their responses are assessed and which criteria are used. Let the vendors know how the selection process will continue, for instance, if the best two-three vendors based on their RFP responses are selected to a next phase in the process.

 

3. RFP questions do's and don'ts

Section your question areas

If you send your RFP questions in an Excel file, it is worth considering to make separate sheets for each question area. In procurement analytics software RFPs the question areas could include some or all of the following:

  • General questions
  • Data management
  • Analytics and usability
  • Implementation
  • Continuous use and service

Pose clear questions, get clear answers

Asking clear and specific questions allow for concise and informative answers. Do your best to formulate the questions in a way that all vendors answer the same question and understand it in the same way. Underline the importance of question areas where you'd like detailed descriptions and where vendors can elaborate on their answers in contrast to questions with simple yes or no -answers. Additionally, tell if sending appendices as a part of the response is allowed.

Instead of asking your potential vendors to "describe your solution" you might want to ask something like "can you extract data from multiple different ERP systems within our organization". It is difficult for the vendors to know how detailed their answer should be if you ask them to describe their solution. Fitting a detailed description might also be challenging to fit it into an Excel cell and you might end up receiving an appendix of 50 pages explaining all the technical details of their offering.

Question Template

Based on these key points we have created a question template that you can use when making your own RFP. You can download the free template here


 

All articles

Related articles

Matti Fouchault-Airasmaa

Procurement

10 + 1 strategies for procurement to forge its path in a crisis

Companies respond differently to crises depending on their past experiences and level of readiness for a disaster. Even when business continuity plans are in place it’s common for people to feel anxious and avoid making decisions. Do they employ fight...

Sammeli Sammalkorpi

Procurement

Procurement needs less processes – as they are slow, boring and self-centered

I’ve discussed with a number of CPOs during the last months on how they have managed procurement during Covid-19. One recurring answer is along the lines of "we broke all of our processes and went to wild-west-mode.” Now, many say this with an...

Never miss news from Sievo

Get updates

Never miss news from Sievo