Tag Archive: requirements

  1. How to Construct an Effective RFP

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    How to Construct an Effective RFP:

    An Industry-Standard Approach to the RFP Process

    At Core Catalysts, we are regularly asked to assist department decision makers and procurement professionals with an RFP (meaning “request for proposal”) to support their purchasing decisions.

    We provide management consulting for our nationwide list of clients in critical industries, including insurance, healthcare, financial services, and telecommunications. Throughout our daily conversations with business leaders, we’ve observed most organizations need a strategic RFP approach that cultivates exceptional talent and services from highly qualified candidates.

    This article covers:

    • The definition of an RFP and its key stages.
    • How to refine your RFP for stronger results.
    • A sample table of contents and structure for creating an RFP.
    • Tables and matrices for communicating with a potential vendor and evaluation.

    Defining the Request for Proposal

    The purpose of an RFP is to communicate available funding for a project or program and to solicit bids for its implementation. This approach makes the process competitive and fair, and ultimately ensures receipt of a higher number of proposals. The organization that develops the RFP then evaluates the proposal submissions and determines the best candidates.

    What Are the Key Stages of the RFP Process?

    Each stage of the RFP process is an opportunity to encourage excellence from the bids you solicit. When an organization strives for strong communication and effort, they are far more likely to gather bids that meet their standards.

    Core Catalysts has identified this structure to generate dynamic bids and exceptional results from prospective partners:

    • Specification: The most critical stage in the process, specification involves identifying key objectives, explaining requirements and project scope, detailing how proposals will be evaluated, fielding questions, and ensuring contractual or legal considerations are clearly outlined.
    • Proposal: The organization releasing the RFP should determine the best channels to make their request public, including materials to market the proposal (e.g., a press release posted to your website, social media, and third-party industry platforms that prospective partners use to find new projects). An organization may also consider hosting a webinar, posting FAQs, and providing other informative materials to answer questions throughout the process.
    • Evaluation: During this stage, a committee from the organization meets to review the proposals. Subject-matter experts, those who will lead project implementation, and other important stakeholders who understand the project’s goals and scope are included in this process. The process is only as effective as the evaluation criteria you’ve established. Organizations usually refine their processes as they grow as an organization.
    • Implementation: During this final stage, contracts are signed, a kickoff meeting occurs, and the project is underway. Regular updates are typically required on a strict deadline. Your team and the contracted vendor should stress transparency and communication throughout the implementation process. A testing or quality assurance period should precede any final steps to ensure that the deliverables are up to standard.

    It is also critical to note that the RFP process is iterative; after project implementation, set aside time for evaluation of the entire process and make changes where applicable. When a new project or initiative arises, the previously discussed improvements should be implemented.

    If you’d like further help constructing an RFP or need help managing the RFP process, contact our consulting management team.

    Further Considerations: What Factors Might Companies Consider When Creating RFP Requirements or Questions?

    There are many refinements you can make to your RFP to solicit the results you’re looking for. The recommendations we’ve listed below also make the process more equitable by prompting responses that can be measured without subjective bias.

    1. Ask questions that allow you to objectively compare the responses. The question should be comparable through the defined decision criteria. For example, request metrics and a narrative that explains them (e.g., productivity, hours, costs, and more).
    2. Choose open and closed-ended questions for appropriate situations. If the answer is truly a “yes/no” response, simplify the process by asking a closed-ended question. Answers that require open-ended responses should be vetted through your decision criteria to see if they can be evaluated appropriately. For all questions, you can test-run their clarity by having them answered by people who aren’t involved in developing the questions.
    3. Discuss how questions should be phrased: Determine the technical complexity and industry expertise required to answer appropriately. Do the questions include esoteric terms that can only be answered by a few specialized people in your industry? If it is not required that the vendor has the same industry technical expertise in a subject, then questions should be reworded appropriately. Another way to support technical questions is to provide a term glossary.
    4. Weigh the importance of responses: Develop a plan that allows you to objectively analyze vendor responses. Divide closed-ended questions and open-ended questions into sections. Have the business unit leaders apply weights to questions that most impact their lines of business. This exercise is for both open- and closed-ended questions. When scoring questions, you can consider the size, level of effort, duration, quality, likelihood of occurrence (e.g., minimum, probably, likely), and other factors for that particular category. See Table 3 below for example categories.

    You can also consider the following rating system to determine weights:

    1 – Not important

    2 – Less important

    3 – Neutral

    4 – Important

    5 – Very important

    Scoring Rubric for Evaluating the Quality of Your RFP’s Responses

    Before you meet as a committee to evaluate RFP submissions, creating an evaluative rubric for scoring answers allows you to ensure a far more objective and efficient process.

    For closed-ended questions that require a yes or no answer to determine the vendor’s qualifications, apply the following score:

    1 – Yes

    0 – No

    For open-ended questions, apply one of the following scores:

    1 – Poor answer

    2 – Fair answer

    3 – Average answer

    Example Forms and Matrices

    Use or adapt the following resources to enhance the RFP process. These resources are courtesy of Core Catalysts, a Kansas City-based management consulting firm that works with nationwide clients across a range of critical industries.

    Table of Contents

    This table of contents provides a template for an RFP’s main structure, although revisions and additions can always be made based on your organization’s needs.

    1. INTRODUCTION………………………………………….. P.1-#

    1.1 Company Profile………………………………………………….x
    1.1A Description…………………………………………………y
    1.1B Products and services…………………………………..y
    1.1C Location and geographic area……………………….y
    1.1D Organizational chart and employee count……..y
    1.2 Department Responsible for RFP…………………………..x
    1.3 Background and Business Case……………………………..x
    1.4 Current Applications and IT Infrastructure…………….x
    1.5 Project Summary and Scope………………………………….x
    1.6 Objective of RFP…………………………………………………..x

    2. INSTRUCTIONS FOR PROPOSED VENDORS……………. P.2-#

    2.1 Schedule of Major Events and Deadlines (see example in Table 1 below)…..x
    2.2 Communication and Inquiries……………………………….x
    2.3 Preparation Expenses (Responsibility of Vendor)……x
    2.4 Preparation Instructions……………………………………….x

    3. VENDOR GENERAL INFORMATION……………………………………………… P.3-#

    3.1 Vendor Profile………………………………………………………x

    4. FUNCTIONAL REQUIREMENTS………………………… P.4-#

    4.1 Detailed Description on Systems Needed…………………x
    4.2 Current Statistics and Data…………………………………….x
    4.2A 6-12-month volume, spend, count, usage of needed services or products…..y

    5. TECHNICAL QUESTIONS TO BE COMPLETED BY VENDOR…..P.5-#

    5.1 Closed-ended questions……………………………………………x
    5.2 Open-ended questions……………………………………………..x

    6. PRICING………………………………………………….. P.6-#

    6.1 Pricing schedule instructions…………………………………….x

    7. CUSTOMER CONTACTS………………………………….. P.7-#

    7.1 Vendor Communications Table (see example in Table 2)…..x

    8. APPENDICES……………………………………………. P.8-#

    8.1 Appendix A. Term Glossary……………………………………….x
    8.2 Appendix B. Suggested Contractual Terms and Agreement…..x

    Table I: Vendor Communications

    Note: Specify a time zone either under each date in the table, or if the time is the same for all deadlines, indicate the time (also referred to as a timetable or calendar of events) and time zone above the table. For example: “All submissions no later than 11:59 pm Central Time Zone on date specified.”

    Task Date
    Initial issuance of RFP by Company [XX/XX/XX]
    Deadline for Vendors to submit questions to content of RFP [XX/XX/XX]
    Answers for all relevant questions posted by Company [XX/XX/XX]
    Deadline for submission of proposals by Vendors [XX/XX/XX]
    Initial evaluation complete. Vendors will be notified of selected finalists (first round) [XX/XX/XX]
    Vendor presentations scheduled with Company [XX/XX/XX]
    Company selects final Vendor for recommendation to the Board of Directors/Executive Team [XX/XX/XX]
    Contract awarded to Vendor [XX/XX/XX]
    Preferred commencement date of project implementation [XX/XX/XX]

    Table II: Example Vendor Communications Table

    (Note: If submitting with a partnered organization, please add communication information for the partner as well)

    Form B Information
    Primary Contact First Name Last Name
    Email person@companyxyz.com
    Phone (XXX) XXX-XXXX
    Address Address, City, State, Zip
    Description of services provided in Scope X Services; Y Services

     

    Form A Information
    Primary Contact First Name Last Name
    Email person@companyxyz.com
    Phone (XXX) XXX-XXXX
    Address Address, City, State, Zip
    Description of services provided in Scope X Services; Y Services

    Table III: Example Vendor Evaluation Matrix

    Categories Weight Final Score Initial Score Final Score Initial Score Final Score Initial Score
    Firm 5% 0.2 4 0.25 5 0.2 4
    People 10% 0.3 3 0.3 3 0.4 4
    Philosophy 5% 0.1 0.15 3 0.15 3
    Process 10% 0.5 5 0.3 3 0.3 3
    Portfolio 5% 0.2 4 0.2 4 0.25 5
    Fees 15% 0.6 4 0.6 4 0.75 5
    Performance 30% 0.9 3 1.5 5 1.5 5
    Systems 20% 0.6 3 0.8 4 0.8 4
    Other 0% 0 0 0 0 0 0
    Weighted Total 100% 3.4   4.1   4.35  

    About Core Catalysts

    Core Catalysts is a management consulting firm based in Kansas City. A results-oriented team, we benefit clients across the U.S. in many industries, including healthcare, insurance, financial services, and telecommunications. Core Catalysts provides services such as process improvement, product and service commercialization, revenue enhancement, financial modeling, program and project management, software selection, enterprise risk management, and business performance improvement.

    Key Contacts

    Jim Wadella
    Managing Member
    Jim.Wadella@corecatalysts.com

    Matt Craig
    Senior Director
    Matt.Craig@corecatalysts.com

    Jeffrey Kupper
    Senior Director
    Jeffrey.Kupper@corecatalysts.com

    Disclaimer

    This resource is for informational purposes only. Core Catalysts, LLC does not guarantee the accuracy or completeness of the information, and the information does not constitute accounting, financial, investment, tax, legal, or other professional advice, nor are we suggesting the information replace such professional advice. Before making an important business decision, please consult a qualified professional.

    Works Cited

    “A Guide to Writing a Request for Proposal: How to let providers propose creative, relevant, and cost-effective solutions by focusing on the end, not the means.” Warehousing Education and Research Council (WERC), n.d. Retrieved 16 May 2024 from https://cdn.ymaws.com/www.intix.org/resource/resmgr/files/shopping_for_a_new_system.pdf

    Andriyanets, Yulia. “Request for Proposal (RFP) – In the area of computer hardware/software/services.” LinkedIn SlideShare, 31 May 2010. Retrieved 6 July 2016 from http://www.slideshare.net/Mike97/request-for-proposal-rfp-in-the-area-of-computer-hardware?qid=a408d996-243f-42a8-8cf9-dfc46b8ec163&v=&b=&from_search=2

    Core Catalysts, LLC. miscellaneous proprietary documentation and methodologies. Retrieved 6 July 2016.

    Heeringen, Harold van. “Request for Proposal (RFP) Management – Ask the right questions and choose wisely.” LinkedIn SlideShare, June 2010.

    Huening, Nathan. “How to Write a Great Website RFP – with a little guidance, you’ll be writing them like a pro.” New Media Campaigns, 16 Dec. 2014.

    Investopedia.com. “Request for Proposal – RFP.” Investopedia, 10 Jan. 2011. Retrieved 6 July 2016 from http://www.investopedia.com/terms/r/request-for-proposal.asp

    Kutcher, David. “How to write Requests for Proposals (RFP) for best results.” Confluent Forms LLC., 19 June 2009. Retrieved 6 July 2016 from http://www.confluentforms.com/2009/06/6-steps-to-writing-better-request-for.html

    Mike97. “Corporate Email Archive Solution – Sample Request for Proposal.” LinkedIn SlideShare, 1 Jan. 2009.

    “Request for proposal.” Wikipedia. Wikimedia Foundation, 21 Oct. 2016. Retrieved 6 July 2016 from https://en.wikipedia.org/wiki/Request_for_proposal

    Rouse, Margaret. “What is a request for proposal (RFP)? – definition from WhatIs.com.” Contributors: John Moore. SearchITChannel, Apr. 2015. Retrieved 6 July 2016 from http://searchitchannel.techtarget.com/definition/request-for-proposal

    TechSoup. “RFP Library – Tips and sample RFPs for your nonprofit, charity, or library.” TechSoup, 2 Feb. 2012. Retrieved 6 July 2016 from http://www.techsoup.org/support/articles-and-how-tos/rfp-library

  2. ERP: When and How to Upgrade Your System

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    When analyzing the effectiveness of your ERP system, consider the following questions:

    • Are you relying on multiple systems and software solutions to manage your business?
    • Do you feel a lot of time is being wasted on manual processes and data input?
    • Do your current business systems suffer from an obvious lack of features, slow or glitchy performance, reduced support, or potential security issues?
    • Is it overly complex and difficult to onboard new staff, set up new reports, or find, access, and use accurate data?
    • Are you missing out on sales because you don’t have the right products in stock or can’t get orders to customers quickly enough?
    • Are you running at 100% capacity and don’t know how to grow your business without expanding?
    • Do you seem to not be making as much money as you should within certain channels or with certain customers?

    These are all signs that it might be time to upgrade your ERP system.

    While e-commerce, machine learning, AI, and the cloud have been front-of-mind topics in recent years, today’s economy means that, no matter what industry, and no matter whether you are a manufacturing or service company, having a robust ERP platform is a top business priority.

    Right now, many of our clients are considering upgrading their ERP systems to strengthen their supply chains, upgrade their supply chain management capabilities, improve operating efficiency (countering inflationary pressures), and maximize production / service delivery capacity, thereby enabling future growth.

    We’ve been involved in and have led multiple ERP upgrades and implementations. Their impact on business performance and metrics (e.g., service levels, inventory and materials days on hand, margins, etc.) has been transformative. This enables measurable growth in revenue and profit, with clear returns on the efforts and investment.

    However, approaching your ERP upgrade the wrong way can be catastrophic. ERP implementations are typically time consuming and complex, and botched ERP implementations have been known to decrease supply chain visibility, tank revenue and profit, and drive ongoing incremental complexity and expense. In fact, some estimates indicate that three-quarters of ERP transformations fail to stay on schedule or on budget, and around two-thirds of ERP upgrade projects have a negative return on investment.¹

    So if you are considering upgrading your ERP system, and want to avoid the potential pitfalls, what should you do?

    With collective experience in ERP implementation spanning hundreds of years, the Core Catalysts team have identified five critical factors that consistently contribute to success.

    Strong SI vendor selection and management

    Most ERP software providers do not sell directly to customers, relying on Systems Implementation (SI) partners for all but the largest customers. While there are many high-quality ERP SI’s out there, we have found that there are also a lot of mediocre ones, so much so that we often say that SI selection is as important as ERP system selection.

    Equally, we have seen many companies assume that their ERP SI will not need a lot of management once they have been selected. Unfortunately, too many times have we seen a “fox guarding the hen house” situation develop, where the incentive for the SI to increase scope and duration (and thereby, fees) becomes too much for them to resist.

    Therefore, critical factor number one for successful ERP implementations is strong SI vendor selection and management.

    Strong Project Management

    Linked to the first critical success factor, we have seen many ERP implementations fail due to an organization’s lack of experience in managing major IT projects and multivendor programs.

    ERP projects in particular benefit from rigorous project management systems, protocols, and governance, meaning that there is typically a strong ROI from bringing in an outside consultant like us to help project manage implementation.

    Equally, investment in outside project management help has the dual benefit of reducing “stresses” to the organization that can arise from having internal subject matter experts divert time and attention away from their “day jobs” towards managing an ERP implementation.

    So, critical success factor number two is strong project management.

    Investment in Requirements Gathering/Generation

    Similar to the second critical success factor, many organizations fail to understand the level of input needed from business sponsors to successfully define the requirements (i.e., the functionality a system needs to have and the scope of what the system needs to be able to do) and struggle to manage the multiple, complex, detailed discussions needed, even when they have adequate resources and capabilities internally to do this (which they often don’t).

    Frequently we see clients rush headlong into an ERP implementation without taking adequate time or effort to answer important requirements questions around items such as operating models, workflows, and processes, or considerations such as data management and validation rights. Subsequently, this often leads to mid-program issues (and schedule and cost overruns) that undermine confidence in the project, as well as the potential for the ERP implementation to deliver positive operational and financial returns.

    This is why Core Catalysts often includes assistance in requirements gathering/generation upfront within an ERP implementation project as part of our project management approach. This is also why many of our clients see a strong ROI in engaging us within ERP implementation projects.

    A good example of this is how frequently we are able to reduce both the upfront implementation expense and ongoing operating expenses of new ERP systems. We do this by helping clients maximize the usage of standard configurations and out-of-the-box functionality. By focusing and aligning client stakeholders on business requirements, we are able to reduce the number of customizations that often drive both costs and complexity!

    Therefore, critical success factor number three is investment (of both time and money) in requirements gathering/generation at the beginning of an ERP implementation.

    Investment in Change Management

    Similar to the third critical success factor, many organizations fail to understand the importance of investing in “change management” (including training, communications, and user acceptance testing) in order to achieve the projected benefits of an ERP system upgrade.

    Many times, we have seen projects sponsors query the dollar value of the “change management” line item in an ERP implementation budget. They see it as a cost to be reduced versus the investment that it actually is. Investing in change management helps to drive faster speed of adoption, higher ultimate utilization, and greater proficiency which all generate measurable and meaningful financial returns.

    Time and time again, we see a high correlation between investment in change management and ultimate achievement of projected financial and organizational benefits from ERP upgrades. Skimping on change management is a false economy!

    Focus on Business Value / Benefits

    It is very easy to get caught up in the technological considerations surrounding the business case for an ERP implementation. Your system is old, it doesn’t work quite how you’d like it to, processes are manual, etc.

    However, unless these issues are mission critical (i.e., they are threatening the long-term sustainability and success of your organization), it is important to identify the business value/benefits of any proposed investment in a new (or upgraded) ERP system.

    Too often, we see companies spend most of their time on roadmaps, activities, and deliverables, and too little time on the business case when considering whether or not to invest in an ERP implementation. If a business case is not well quantified, documented, and monitored during and after the implementation, is it any wonder so many ERP projects fail to deliver positive returns on investment?

    This is why our successful ERP implementations balance the technological considerations and unmet business needs / opportunities with a strong eye on developing a business case. This leads to delivery of the business value/benefits that underpinned the original investment decision.

    In conclusion, with good SI selection and management, strong project management, upfront investment in requirements gathering/generation, and a focus on business case/value creation, upgrading your ERP system can be an important enabler of business growth and maintaining and improving your business performance.

    If you’d like to discuss how Core Catalysts might be able to help you decide whether or not it is time to upgrade your ERP system, or how we can help you in implementation, please give us a call!

    Mark Jacobs, Client Service & Delivery


    ¹Casanova, Lohiya, Loufrani, Pacca, and Peters (2019), “Agile in enterprise resource planning: A myth no more”, McKinsey & Company