Your business needs extensive research before choosing the right ERP software vendor. But you can only find so much information online. This lack of data means you must opt for a formal ERP RFP during your selection process.
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This article offers an extensive step-by-step guide on writing this proposal, some pros and cons, and FAQs.
What This Article Covers
FAQs
What is an RFP?
A request for proposal (RFP) is a file that petitions vendor responses.
An RFP commonly includes:
- Business background information
- Ethics
- Value propositions
- Specifications that describe the required solution
- Evaluation criteria for selecting a vendor
- A deadline
What’s an ERP RFP?
An ERP RFP is an RFP designated exclusively for ERP suppliers.
What’s the difference between an RFP, RFI and RFQ?
An RFP is a document requesting vendors for a proposed product or service.
A request for information (RFI) is a file that questions a vendor’s merchandise or service. You send an RFI before an RFP.
A request for quote (RFQ) is a document that requests prices for products or services. You send this requisition after an RFP and RFI when you’ve narrowed your choices to a few potential software providers.
Why should I use an ERP RFP template?
Filling out a detailed ERP RFP template saves time and improves how you define your software requirements.
Matt Cranfield, IT and tech expert and founder of Your Simple Hosting, discussed the importance of RFP for ERP systems with SelectHub.
RFPs are crucial for sorting through all the options and landing an ERP system that fits your needs. The RFP helps make sure everyone’s on the same page about requirements. It’s as much an internal exercise to get clear on your goals as it is an external thing for vendors. Laying it all out makes comparing bids way easier down the line.”
Fawaz Naser, a digital marketing expert and the CEO of Softlist.io, explained to SelectHub how an ERP RFP can help you better align yourself with the right systems and vendors.
An RFP process can help you cut through the noise and focus on what truly matters for your organization’s unique needs and goals. This approach ensures a more strategic and effective ERP system selection that aligns with your company’s vision and operational requirements.”
What do I need in an ERP RFP?
An RFP for ERP should have the following information:
- Background details
- Project scope
- Requirements list
- Vendor qualifications
- Budget and pricing
- Terms and conditions
- Evaluation
- Contacts
How To Create an RFP
To procure an ERP system that best fits your organization, we recommend following these five essential steps for an effective ERP RFP template:
Step 1: Establish Internal ERP Requirements
The first step in launching a successful ERP RFP is establishing your organizational ERP requirements, consisting of functions, qualities and other features.
Establish robust requirements with SelectHub’s requirements planning tool.
Collaborate with decision-makers, including employees using the system daily and leaders in the company, to prioritize essential ERP requirements. Ensure you include input from all teams affected by a new system.
You can set up interviews and focus groups or even send out email surveys to gain an understanding of what your company needs from its subsequent solution.
Then, it’s time to decide how you will create your requirements checklist. Establishing your most important ERP requirements in a formal document will facilitate the following RFP steps.
Often, organizations start with an ERP RFP sample, but we recommend you do the requirements-gathering exercise instead. See our ERP requirements checklist for examples of what you could include in your list.
Tips on Building Requirements
Here are a few requirement-building hints to think over before constructing your RFP:
- Understand Business Practices: Refresh your memory of company objectives and protocols to determine needs. Is your supply chain operating at top speed? Are you gathering all vital KPI data? Do your manufacturing workflows match your demand?
- Evaluate Internal and Client Requirements: Are you meeting client and internal business needs with your current system or practices? If not, consider how a new ERP system could address these pain points.
- Review With Stakeholders: Ensure you meet all your business department and stakeholders’ needs when adding and prioritizing requirements. Effective communication and listening can help your company reach new pinnacles with the proper application.
- Finalize: Prioritize requirements according to your company’s objectives and internal needs. Then, finalize your list.
Step 2: Build Your ERP RFP
Once you’ve compiled and ranked your list of requirements, it’s time to incorporate them into your RFP for ERP. By doing so, the responding vendors will answer how they plan on meeting your outlined ERP criteria.
Make sure the RFP for ERP looks professional and organized. It’s courteous and shows vendors how serious your company is about seeking the best system.
Christoph C. Cemper, CEO of AIPRM and AI and cybersecurity expert, told us that telling your company’s story in an RFP for ERP can also help you find the right vendors.
Don’t just list wants. Talk about your journey. What challenges do you face? Where do you hope to go? This invites the bidding companies to be part of your vision. It provides understanding, not just facts. Ultimately, the proposal paper is more than words on a page. Use it to start a helpful chat with potential partners.”
Naser explained there are a few essential sections to include in your RFP.
For project scope details, always specify the number of users, locations and applications needed. This gives vendors an idea of the scale and complexity of our project. In evaluation criteria, I suggest outlining the criteria we will use to evaluate their responses. This could include factors like cost, scalability, customization capabilities and support services.”
Further, consider submitting your proposal through an RFP software platform.
RFP solutions can auto-compile, tabulate and analyze vendor responses (see Step 4).
An ERP RFP template offers relevant business information, like operation mode, brand value and target audience. This template helps vendors develop a detailed proposal to meet business goals and objectives.
Specify the type of services and deliverables you offer to your clients. Include information on expected timelines, budget and technical specifications.
The ERP RFP template should include the following information:
- Background Details: Include a brief overview of your business and operations, number of users, industry, turnover, expected growth and objectives.
- Project Scope: Establish particular software provider responsibilities and expectations. Also, include the detailed project timeline from purchase to implementation.
- Requirements List: Curate a detailed list of requirements and technical specifications you need in an ERP system.
- Vendor Qualifications: Inquire if the vendors have worked for similar clients and ask them to provide references. Also, check if they have accreditation and awards to ensure credibility.
- Budget and Pricing: Ask the vendor to offer a cost breakdown based on the number of users, add-ons, implementation, training and maintenance.
- Terms and Conditions: Ask for contracts and agreements specific to the vendor and software.
- Evaluation: Provide details about vendor evaluations and make a final decision.
- Contacts: Offer stakeholder and decision-maker contact information. Suppose you don’t have anyone on your team with enough technical knowledge to include technical details on your ERP RFP. In that case, we recommend finding someone within your company to perform or outsource this role.
Step 3: Identify and Submit RFP to Vendors
Once your organization has formulated a comprehensive RFP for ERP, select a shortlist of vendors and invite them to see your proposal.
Your initial RFI should’ve helped you better understand the ERP market enough to identify three to five vendors. If you’re still deciding which vendors to send your RFP to, your original RFI may have needed more specificities to elicit detailed vendor responses.
You should pause the RFP process and assess the situation if you face stumbling blocks. You may start the RFI process over again. Although this step is time-consuming,
it’s best to extend your research timeline rather than invest in a poorly-suited ERP.
Once you’ve created a vendor shortlist you’re somewhat sure about, it’s best to use a specialized ERP RFP template management tool. These tools make receiving software provider responses easier in a centralized interface.
We suggest using our customizable ERP RFP template to get started. This matrix allows you to prioritize requirements, receive stakeholder validation and assess vendor feedback.
Running RFP projects through SelectHub saves organizations 50% of the time usually spent on a start-to-finish RFP.
Asking ERP vendors to reply to an RFP is a time-intensive process. Ensure you’ve defined your requirements well and made it simple for suppliers to submit their responses. For more advice, read our ERP software selection process guide.
Step 4: Review Responses
Before doing RFP evaluations, technology buyers must gather all vendor responses. With the RequirementsHub software available for your IT procurement process, you can evaluate real-time vendor responses for your RFP for ERP.
Review RFP responses in the requirements hub to select potential vendors.
This system can free up time and empower staff to focus on their prominent roles and responsibilities. These tools provide a streamlined approach for vendor question responses and eliminate unqualified candidates.
Step 5: Make a Final Decision
As mentioned in our Lean Selection Methodology, most companies receive in-depth product demonstrations, seek out customer references and negotiate contract terms before making a final decision.
It’s also courteous to inform eliminated vendors of their status.
Contact vendors directly for product demos and other activities.
In addition to managing your RFP process, SelectHub offers a free comparison report of the top ERP vendors. It’s an excellent resource for those unsure which vendors they’d like to send their RFPs to or buyers who’d simply like more insight.
Our analysts evaluated and ranked each provider on how well they provide high-priority tools like accounting, human resource management, distribution and more.
Pros and Cons
There are pros and cons to creating an RFP for ERP, from costs to creating better system requirements and simplifying the software selection process.
Pro: Save Time
RFPs save you time from browsing numerous software provider websites by allowing you to tell vendors what you need directly.
For example, a software supplier’s website may not list every feature. An RFP for ERP can help you ask the right questions and get answers from the source instead of making assumptions based on what you see on their webpage.
Pro: Define Requirements
Crafting ERP RFPs helps you pinpoint and write the top capabilities you need to meet your company’s objectives.
For example, you may need CRM, manufacturing and inventory management tools to streamline your production and consumer needs. You can state specific modules, such as demand forecasting, shipping, quality management, planning and scheduling, and more.
Naser explained how the RFP process offers a level playing field and a specific criteria focus:
The RFP process ensures fairness. It limits prior interactions with vendors, allowing any vendor to submit a proposal with the same information. This reduces bias and offers equal opportunity for all vendors to compete. [Specific criteria focus] allows me to direct the evaluation committee to focus on specific, essential information, ensuring a focused and relevant evaluation.”
Con: More Expensive
Developing RFPs come with direct and indirect costs, such as time and money. Hiring an ERP consultant comes with its pros and cons. Typically, these specialists help you allocate RFPs to different vendors, but it takes time and money.
You also lose time when waiting and reviewing vendor responses, preparing the RFP, outlining features and redoing steps if you don’t get ideal results the first time. You may lose time even if you skip the RFP process, but you can’t earn back lost time.
Con: Consultant Bias
Some ERP consultants may refer to their handy list of software suppliers that may not meet your requirements or company goals. This bias can sabotage the software selection process if you’re not careful.
Ask your specialist about each vendor they contact and why they think the vendor is a good match for your needs, saving time.
Naser described that the RFP for ERP process can bypass potentially great vendors.
If certain vendor services are not included in the RFP, they remain unseen and unconsidered. This limitation can result in missing out on additional benefits that a vendor might offer beyond the scope of the RFP.”
Cemper explained how the RFP should have balance and flexibility.
The bad thing is it takes time to write it all out. And being too picky might cut out options that could work well too. Balance is key. The paper needs details, but also flexibility for cool solutions you didn’t think of.”
Next Steps
The ERP RFP is like a vending machine; you only get what you add to the process.
If you put more effort into RFPs and response evaluations, you’ll better understand how your shortlisted vendors can support your operations.
Still unsure of how to create the best RFP? Look at our free, in-depth requirements template to organize your capability and vendor needs in one centralized hub.
How has an ERP RFP made a difference for your business? Let us know in the comments.
SME Contributors
Fawaz Naser has a wealth of expertise in AI, IT, and Web Applications. Throughout his career, he has been committed to empowering individuals and businesses by providing expert analysis of tools and software to optimize processes effectively. Fawaz’s dedication to driving efficiency and productivity shines through Softlist.io’s mission to assist users in making well-informed decisions for their success.
Christoph C. Cemper is an AI and cybersecurity expert and the founder and CEO of AIPRM, the leading AI prompt management platform for ChatGPT with almost 2 million users. He has been coding since he was ten and sold the rights to his first computer game by 15. He’s been previously quoted in TechCrunch, Wired, The Verge, and Forbes.
Matt Cranfield is an IT and tech expert with over 20 years of experience working in IT. Cranfield is the founder of Your Simple Hosting, where he uses his extensive knowledge and expertise to help others. Previously quoted in: CIO Magazine, TechRepublic, The Next Web, and ZDNet.